HyperSolar Inc (OTCMKTS:HYSR) Jumps Up The Chart

At the end of last week the stock of HyperSolar Inc (OTCMKTS:HYSR) managed to log a respectable gain of 10% for a close at $0.0132 per share. The company also enjoyed increased interest from the market with investors shifting 6.45 million of its shares, which is quite a few times higher than the monthly average of 1.76 million shares. Will the ticker manage to sustain its positive momentum during the weekend though?

For the past several sessions HYSR has made  a couple of attempts to climb up the chart but its volatility causes it to crash almost immediately. Taking a closer look at the company reveals the reason for this erratic behavior. HyperSolar are developing a technology capable of producing renewable hydrogen from sunlight and any source of water. The company has already reached several important milestones and on May 24 it announced its latest breakthrough towards achieving commercially-viable low-cost green hydrogen.

It is easy to get excited about HYSR‘s potential but basing your investment decisions solely on hype could be extremely dangerous. Taking a single look at the latest quarterly report is enough to show just how grim HYSR‘s financial state is – as of March 31, 2016, the company had:

• $55,822 cash and total current assets!!!
• $7 million total current liabilities
• ZERO revenue
• $3.3 million net income

It should be noted that the impressive bottom line was due solely to a net gain of conversion and change in derivative liability of $3.56 million.

And since we mentioned conversions – for the nine months ended March 31, 2016, HYSR has issued a total of 70.5 million shares as a conversion of just $100 thousand in principal and $23 thousand in accrued interest on an outstanding convertible notes. At the end of the quarter covered by the report the company still had over $1.1 million in convertible promissory notes.

It shouldn’t be such a surprise then that on April 4 nearly 20.4 million new shares got issued as a conversion of $29 thousand in principal and $6,674 in accrued interest. This means that the average conversion price of each share was less than $0.0018. According to the subsequent events section of the quarterly report HYSR is still taking on more and more convertible debt – on April 5 a new convertible note was sold that can be turned into common shares at the lower of $0.01 or a 50% discount.

HYSR is surrounded by red flags that demand the use of caution. Plan your trades carefully and never put unaffordable sums of money on the line.

HYSR opened today’s trading over 4% in the green but fell down and is currently sitting 3% in the red at $0.0128.