HyperSolar Inc (OTCMKTS:HYSR) Explodes After Reaching Critical Voltage Milestone
Hypersolar Inc (OTCMKTS:HYSR) have been developing a technology to produce renewable hydrogen using sunlight and any source of water for quite some time now. They have been steadily approaching the minimum 1.5 voltage that is needed for commercially viable real world applications and any time a new PR about their progress was issued investor immediately rushed towards the stock resulting in massive gains. The problem is that usually the hype disappears equally as fast and HYSR crashes back down. Will the same happen this time?
Yesterday the company announced that they had not only managed to reach the 1.5 V mark but to actually surpass it achieving 1.55 V. The news once more put investors into a state of buying frenzy and by the end of the trading day HYSR had moved nearly 50% higher to a close at $0.032. The daily volume of 24 million shares is the biggest registered by the stock since July 2014. There is one problem though – HYSR may have reached their target voltage but that doesn’t mean that the company is going to start generating revenues.
According to the PR HYSR are now going to focus on increasing the hydrogen production efficiencies of its systems by bonding the ideal fuel production catalyst to the low-cost high-voltage solar cell. This means that Hypersolar still need more time putting even greater strain on their already quite dire financials. By the end of the month the annual report should be submitted and investors will have a chance to see if HYSR have managed to improve their balance sheet at all. The reported numbers for the quarter ended March 31 were simply atrocious:
• $7,784 cash and total current assets!!!
• $45 924 total assets
• $11.1 million total current liabilities!
• ZERO revenues
• $1.7 million net loss
Investors shouldn’t forget that the increased interest towards the stock may allow the owners of millions upon millions of discounted shares to unleash them on the open market. As we warned you in our previous article during HYSR‘s fiscal year ended June 30, 2014, 180 million shares were issued at just $0.0025. During the next nine months another 45 million shares saw the light of day at an even lower price of $0.0017.
At the end of March HYSR had around $560 thousand in outstanding convertible notes and the annual report will show if the company has taken on even more convertible debt. And they may have done exactly that because as of May 13 the company estimated that its current resources will be enough to fund its operations for around sixty days.
The potential dilution is massive and it must be taken into account when trading the stock. Do your own due diligence and don’t base your decisions solely on hype.
