The share of Hemp Inc (OTCMKTS:HEMP) seems to get unstoppable when it comes to declining on the chart. It has been eroding its value for months and the decline got deeper in this week. On Tuesday’s trading session, the share price plunged more than 10% to close the day at $0.0166. It registered a new 52-week low. It was yesterday when the stock showed first signs of pullback. In last trading session, it surged almost 3% to close the trading session at $0.0175.
The PRs
In this week, Hemp Inc released four Press releases highlighting the launch of the new improved Kush Cake together with Dewmar International BMC, Inc. (OTCMKTS:DEWM). In the last eight trading sessions, the stock registered seven red sessions and just two green sessions that too with combined gains of less than 5%. The momentum indicates that the investors are not excited with the launch news of new improved Kush cakes. With the hype almost settled, there is nothing more that can support the stock price at this time.
The performance
As per the annual report submitted on March 31, 2015, Hemp recorded $243,000 in cash. The total current assets came at $3.5 million while total current liabilities stood at $1.4 million. The sales came at $7.95 and the net loss was $904,000. In the second half of the year, Hemp recorded revenue of less than $100,000. It is the disturbing part in the financial report. Moreover, despite the sharp decline in the stock, the company still has a market cap of more than 46 million.
The dilution
The problem doesn’t ends at revenue figures but extends to more serious problem of share dilution. Hemp has been issuing massive amount of its common shares. In 2014, the count grew to more than 2.7 billion from 1.8 million. With millions of preferred and K shares still outstanding at start of FY2015, the company might soon be forced to force to extend the authorized shares count to 3 billion shares.
