US Energy Initiatives Corp Inc (OTCMKTS:USEI) Gets Hyped Up Yet Again
A PR article appeared on March 19 and according to it, US Energy Initiatives Corp Inc (OTCMKTS:USEI) has established itself as a leader in the cannabis industry. That’s a bold claim, especially for a penny stock that’s been struggling to break the $0.01 per share barrier for the past nine months. But is there actually any merit to it? As always, you need to decide for yourself, but while you’re contemplating the options, you should probably keep one or two things in mind.
The article in question appeared alongside the rest of USEI‘s press releases, but it wasn’t actually written by the company or its management team. It was put together by an entity called Undiscovered Companies and if you take a look at their disclaimer, you’ll see that they received $500 for doing it.
Despite the overly optimistic claims, the market didn’t seem all that interested. The ticker showed very little in terms of movement last week and even on Monday, it remained pretty much stationary while registering a dollar volume of just $75 thousand. Over the last two days, however, it has popped back up on investors’ radars. Tuesday’s session brought gains of around 42% and yesterday, USEI added another 12% while shifting more than $1 million worth of stock.
The only possible reason for the renewed interest is an interview with Anthony Miller, the company CEO, that appeared on Tuesday. It was uploaded by a YouTube user who goes by the nickname of TheLumberDoktor and, somewhat predictably, it concerns USEI‘s plans for the future.
We must say that the projections look very bright. Mr. Miller says at one point (without going into too much details) that there could be some talks about a potential partnership between his company and another marijuana-related penny stock – Tranzbyte Corp (OTCMKTS:ERBB). He also says that he expects to see a revenue figure of between $1 million and $1.5 million in USEI‘s future financial statements.
His predictions, in must be noted, are in stark contrast to the company’s performance so far. The latest financial report covers the twelve months ended December 31, 2013 and it contains the following figures:
- cash: $64 thousand
- current assets: $639 thousand
- current liabilities: $1 million
- yearly revenues: $100 thousand
- yearly net loss: $261 thousand
It’s pretty clear that the financials above aren’t really substantial enough to support the market cap which is currently closing in on the $9.5 million mark. At the same time, if Mr. Miller proves to be right about the revenue figures, the stock might even be considered undervalued at the moment.
The problem is, this is not the first time he has expressed optimism about the future and when he previously did it, his predictions didn’t really pan out. On June 19, 2013, for example, he announced USEI‘s partnership with a company called Prometheam Biofuels. The two enterprises were supposed to work together and, in Mr. Miller’s own words, they had the capacity to produce between 2.1 and 3 million gallons of biodiesel per year. This should have brought millions of dollars in revenue both for USEI and for Promethean, but the annual report that you see above shows that this didn’t happen.
Of course, things might be different with the current marijuana and hemp business, but even if you decide that this is indeed 
the case, considering all the risks might not be a bad call.
USEI‘s performance from yesterday was strong, but it was nothing compared to the one put on by Limitless Venture Group Inc (OTCMKTS:LVGI). LVGI managed to shift nearly $4.4 million worth of shares while the price increased by a whopping 257%. Emaji Inc (OTCMKTS:EMJI)’s jump wasn’t quite as spectacular, but, at 166% gained in six and a half hours of trading, it wasn’t too bad either.
