US Energy Initiatives Corporation, Inc. (OTCMKTS:USEI) Drops Despite PR
US Energy Initiatives Corporation, Inc. (OTCMKTS:USEI) announced their switch to the marijuana industry exactly two months ago but the company was not able to show much progress with its new operations. Still, optimism among investors remained strong and when on March 27 the first deal with a Washington producer was officially revealed it managed to propel the stock even higher.
The momentum created by the news was so strong that this Tuesday USEI posted its new 52-week high of $0.0199. Unfortunately the stock couldn’t maintain such high valuations for long and quickly headed towards the bottom of the chart. Yesterday the negative trend continued and USEI lost nearly 15% returning back to $0.0137 per share. Even the PR released early in the morning failed to stop the slide.
Apparently the management of the company is going to attend yet another hemp expo but more importantly they should be doing a lot of meetings about possible partnerships. We don’t know exactly what it means but USEI have an agreement with an “unbelievable” edibles maker that should enable them to start production later this month. If the company really rolls out a product soon they might be able to keep most of the price gains and even look to jump further up the chart.
But they will have to do a lot in order to improve their financials. The previous business plan left USEI in a rather depressing state at the end of 2013:
But they will have to do a lot in order to improve their financials. The previous business plan left USEI in a rather depressing state at the end of 2013:
• cash: $64 thousand
• current assets: $639 thousand
• current liabilities: $1 million
• yearly revenues: $100 thousand
• yearly net loss: $261 thousand
• current assets: $639 thousand
• current liabilities: $1 million
• yearly revenues: $100 thousand
• yearly net loss: $261 thousand
In addition to the poor results the company has almost burned through its 1.44 billion authorized shares. At December 31 there were 1.2 billion shares outstanding and is quite unlikely that for the past three months no new shares were issued. Investors should also keep in mind that the 210 million shares distributed as dividend to shareholders back in November will become free trading around April 14.
Although there are no pumpers currently targeting USEI its past history of paid promotions shouldn’t be ignored. Do your own research prior to any trades and avoid jumping into a company based solely on hype. Quite a few of the pennystocks that joined the marijuana industry recently dropped during yesterday’s session. Fortitude Group, Inc. (OTCMKTS:FRTD) wiped 23% of its share price closing at $0.031 while United Treatment Centers, Inc. (OTCMKTS:UTRM) continued correcting by another 12% and found themselves at $0.0072 per share.
