On Wednesday’s trading session, the share price of Hemp Inc (OTCMKTS:HEMP) opened in green and the dropped to make a low of $0.02. Before the closing hours it bounced back and closed the day with gains of 1.28%. The stock price has been trying to move up on the charts but is lacking the strength to post strong gains. The last surge came at a share volume of 9.21 million compared to the average volume of 12 million.

The trend

The share volume recorded on Wednesday’s trading session remained below the 30-day average volume of 12 million. The volumes are clearly not supporting a large move either ways on the chart. The company filed its annual financial report for FY2014 few days ago. It lacked the substance to support the declining stock.

The analysis

Hemp Inc filed annual report few days ago which disclosed it had cash of $243,000. The company’s total current assets amounted to $3.5 million. The total current liabilities came at $1.4 million. The sales figure was $7.95 million and net loss came at $904,000. Any OTC traded firm that records annual revenue of $8 million is considered as in healthy financial state. The shareholders expect the price to surge but it was not the case with Hemp.

The red flags

Hemp Inc (OTCMKTS:HEMP) raised a major part of its total reported sales in the first half of 2014. The revenue amounts to $5.5 million in 1Q2014 whereas it came $2.3 million in 2Q2014. It received the capital in the form of securities that it held for sale from its consulting clients. In 2H2014, the company recorded revenue of less than $100,000. Also, there was an increase in the dilution of the common stock. These are the few reasons shareholders were not excited after the annual report. The company needs to consider these factors.