Minerco Resources Inc (OTCMKTS:MINE) Crashes
On Tuesday Minerco Resources Inc (OTCMKTS:MINE) announced that their new product line, The Herbal Collection, is getting closer to being launched as the company is finalizing the research and development stage. The line will consist of an assortment of ready to drink (RTD) teas enhanced with micellized Cannabidiol(CBD).
MINE’s stock had dropped in the red during the first half of the session but when the PR was published the positive reaction from the market managed to push the ticker upwards to a close 6.38% in the green at $0.005. In our previous article we warned you that despite the encouraging outcome the performance of the stock did show signs of hesitation.
It seems that we were right and yesterday the ticker crashed back down wiping 10% of its value and returning to $0.0045 per share. The daily volume of 42 million shares surpassed the 38 million from the previous session.
Announcing a whole new product line should have been enough to launch the ticker further up the chart if it didn’t take MINE 16 months of research, development and consumer trials. The numerous other red flags surrounding the company don’t make the situation any better.
The financial report for the quarter ending January 31 revealed that back then MINE had:
• $137 thousand cash
• $1.5 million current assets
• $3.39 total current liabilities
• $740 thousand revenues
• $1 million loss from operations
• $2.1 million net loss
In addition to the depressing financials investors should also take into account the rampant issuance of shares that has been taking place. Between October 31, 2014, and March 23, 2015, the outstanding shares of the company ballooned from 2.8 BILLION to over 3.34 BILLION. Out of all the freshly printed shares 253 million were issued as a conversion of notes at prices ranging from $0.00025 to $0.0025 while 183 million were issued through the conversion of preferred B shares. If the dilution continues at the same rate MINE will soon have to increase their authorized amount of 3.5 billion shares. This becomes even more likely if you consider the fact that in order to reduce its liabilities by $300 thousand MINE had to issue even more preferred B shares.
The next quarterly report should be submitted by mid-June and it will show the current share structure of the company. If the financials in the report don’t show any improvement while at the same time even more shares have been issued at discounted prices MINE might have difficulties maintaining even the current share price of their stock.
