Last week didn’t start well for Minerco Resources Inc (OTCMKTS:MINE), despite the shareholder update released on Monday. In fact, after the release the stock prices posted deep losses. It was only on last trading day of the week, the ticker managed to close in green.
The management of Minerco Resources released share update to boost investor confidence. However, the news resulted in opposite reaction. Minerco didn’t only report the progress that they achieved recently but also filed financial results for the quarter ended January 31, 2015 which seems failed to match the expectations of shareholders.
As per the last quarterly report, Minerco Resources Inc (OTCMKTS:MINE) reported cash of $137,000 with current assets at $1.5 million. The total assets were $2.72 million while total liabilities came at $4.94 million. The current liabilities stood at $3.39 million. The quarterly sales came at $740,000 and net loss was $2.11 million. The bright aspect in the financials numbers is that the company is posting revenues. However, the problem is gross profit has declined compared to same period last year, whereas the revenue have doubled during this time. The mismatch between revenue and gross profit was not to the liking of the investors. Moreover, the net loss surged by 1571% from the comparable period.
The take away
The financials numbers recorded in the quarterly report seems to be the reason for Minerco’s poor performance in last week. However, the things settled on Friday when the company reported that its daughter firm, Level 5 Beverage Company, Inc. exercised its option to buy an additional 21% of Avanzar Sales, expanding total holdings to 51% from 30%. The announcement instilled optimism in shareholders following which the stock price of Minerco managed to close slightly in green at $0.0059. In any case, shareholders should perform due diligence and consider the risks before investing in the company’s stock.