Hemp, Inc. (OTCMKTS:HEMPD) Deepens Its Losses

For the past four sessions the stock of Hemp, Inc. (OTCMKTS:HEMPD) has been destroying massive chunks of its value and it seems that the downtrend is only getting stronger – last Friday the ticker registered a loss of 18.5% while yesterday it slashed another 25%. Currently the stock is trading at $0.0795 per share. The volume for yesterday’s trading surpassed the monthly average by more than twice.

In short, from its opening price of $0.19 on August 12 HEMP’s losses are approaching 60% at the moment. But the situation is actually much worse because on July 31, without giving any prior warning to investors, the company performed a 1-for-10 reverse split. If the stock continues to lose positions investors could be facing soul-crushing losses.

That is why in all our articles we warned you that the red flags surrounding HEMP should not be underestimated in the slightest. The financials of the company are nothing short of depressing. HEMP finished the first quarter of the year with:

• $632 thousand cash
• $2.3 million current assets
• $2.27 million current liabilities
• $6,223 revenue
• $1.08 million net loss

The report for the second quarter was supposed to be completed by the end of last week but instead HEMP submitted a notification of late filing which gave them a 5-day extension. This means that tomorrow the report should be filed and if it paints the same grim picture the stock could get depressed even further.

The report will also show if any preferred K shares have been issued recently. In the past any amounts HEMP owed to its CEO were reduced through the issuance of preferred K shares, each of which can be turned into 10 common shares. At the end of March HEMP owed $2 million to Mr. Bruce Perlowin. Keep in mind that with the increased authorized amount of 5.5 billion shares and the subsequent reverse split there is plenty of room for dilution.

Even if you believe that everything will get better once HEMP’s Temafa decorticator becomes operational, it should still take quite a while because Phase 1 of the reassembly was completed just recently, you should still do extensive due diligence before putting any money in the stock.