New PR Pushes Minerco Resources Inc (OTCMKTS:MINE) Up
When the market opened yesterday the stock of Minerco Resources Inc (OTCMKTS:MINE) dropped into the red almost immediately and it seemed that it would stay there. MINE had other plans though and issued a new PR that caused their stock to suddenly surge up the chart. In just three hours the ticker moved from a low of $0.0045 to a high of $0.0053.
The company revealed that their new line of products called The Herbal Collection is in the final stages of research and development. Although the news is undoubtedly positive and it did cause the stock to close in the green the reaction from the market was rather subdued. In fact MINE did take a step back right before the closing bell finishing the session at $0.005 with a gain of a little more than 6%.
We reckon that investors could have been much more impressed with the company’s progress if it didn’t take MINE nearly a year and a half to get here. As the PR states after 16 months the formulation and the packaging of the initial product has just been finalized. The new product line will be led by an all-natural Green Tea with Honey drink, containing CBD in a micellized format. Will this be enough to entice investors to jump back in though?
So far 2015 has been a tough year for the long-term shareholders of the company. In mid-January MINE did reach a high of over $0.12 but since then stock has been steadily going down the chart currently sitting almost 60% lower even after yesterday’s gain.
The latest financial report submitted by the company covers the quarter ending January 31, 2015, and it contained the following:
• $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
With a working capital deficit of over $1.8 million, mounting losses and minimal cash reserves it is obvious that MINE is not in an encouraging financial state.
Another huge red flag that investors must take into account is the continued dilution of the common stock. As of October 31, 2014, MINE had 2.8 BILLION outstanding shares but as of January 31, 2015, that number had surpassed 3.27 BILLION. 254 million of the freshly printed shares were issued as a conversion of notes at prices ranging between $0.00025 and $0.00255. Just in January another 183 million shares were issued through the conversion of preferred B shares. As of March 23 MINE had 3,342,057,455 outstanding shares out of the 3.5 billion authorized.
Recently the company did announce that it has divested its energy holdings in a deal that should bring MINE $715 thousand in the next twelve months. The accrued liabilities were also reduced by around $300 thousand but investors should note that this was achieved through the issuance of more preferred B shares. A PR from May 6 announced that MINE has increased its stake in Avanzar Sales and Distribution, LLC by an additional 24% to a total of 75%. As part of the deal though the six existing members of Avanzar received 336 thousand preferred C shares.
The next quarterly report should be filed by June 15 and it will most likely determine the direction of the stock. If even more shares have seen the light of day at heavily discounted prices the excitement generated by the new product line might not last for very long.
