Is Hemp Inc (OTCMKTS:HEMP) Starting to Recover?
For five sessions in a row the stock of Hemp Inc (OTCMKTS:HEMP) was going nowhere but down but yesterday it finally managed to stop its slide. When the closing bell put a stop to the trading HEMP were sitting 2.44% in the green at $0.042. The gain is not that impressive but could it be the start of a more prolonged recovery?
HEMP have been trying to get investors excited through PRs but they have not been that successful. On June 2 they announced that their consulting client FutureLand (OTCMKTS:FUTL) has signed a binding MOU for the purchase of 50% ownership in 78 acres on land for $125 thousand. According to the PR the land is currently being developed into a recreational marijuana facility. The announcement would have been far more impressive if FUTL didn’t report having a negative cash of $5,627, zero revenues, and net loss nearly $600 thousand at the end of the first quarter of the year.
Although HEMP‘s financial state is nowhere near as grim it is still far from encouraging. Opening the latest quarterly report reveals that as of March 31, 2016, HEMP had:
• $160 thousand cash
• $1.5 million total current assets
• $190 thousand total current liabilities
• $743 thousand sales
• $3 million net loss
The massive increase in revenues on a year-over-year basis (for the same period last year HEMP reported just $6,223 in revenues while for the entire 2015 they had $113 thousand in revenue) may seem impressive but taking a closer look reveals that the sum is unlikely to have come through the sale of products due to the fact that the cost of sales is ZERO. This could mean that the revenue was generated through the consulting services of the company, and one its clients we already discussed earlier. The revenues are not the only thing that shows a dramatic growth, though, as the same could be said about the net loss that is three times higher than a year ago.
The report also revealed that the dilution of the common stock is going as strong as ever -during the first three months of the year nearly 100 million fresh shares have seen the light of day. As of March 31 HEMP had over 556 million outstanding shares.
Early in the morning today the company issued a new PR talking about its first Kenaf crop from the 150 acres that the company had planted. This achievement, however, hardly justifies HEMP‘s statement that the company seems to be viewed as a “savior” by the farmers of North Carolina. The PR once again lacked any meaningful information on the progress of HEMP‘s decortication facility. The video update that was uploaded yesterday also offers little insight on the subject.
The press release seems to have reinvigorated investors at least a little bit and in early trading today the stock of the company is trading 4.29% in the green at $0.0438.
