Just like several other marijuana stocks, Hemp Inc (OTCMKTS:HEMPD) stock failed to move up on the charts as the legal marijuana hype faded later in 2014. The stock managed to post some impressive gains earlier in July, but quickly returned to commence its journey towards south.
The prime reason for which Hemp failed to sustain its gains was the fact that its market cap of more than $40 million seemed massive compared to the financial numbers in the books. As per the first quarter report, the company posted $632,000 in cash. The current liabilities came at $2.27 million compared to current assets of $2.3 million. The net loss in quarter was $1.08 million while revenue came at $6,223.
The more disturbing part was the toxic dilution that Hemp recorded in the recent past. The company increased the count of its authorized shares to 5.5 billion from 3 billion after recording an outstanding share number that exceeded 2.7 billion as of March 31, 2015. Moreover, the company executed a one for ten reverse split that should have diminished the outstanding share number to close to 270 million. The reverse split leaves adequate space for further dilution and considering the company’s outstanding shares count, it might happen soon.
In unrelated news Hemp stated that its subsidiary unit has engaged a proven VP of Sales and Marketing, Mr. Robert (Bob) T. Hughes, to lead an aggressive international and national sales and marketing campaign. Mr. Hughes brings more than 30 years of extensive experience in founding and establishing successful tech firms.
In last trading session, the stock price of Hemp jumped more than 976% to close the session at $0.140. The gains came at a share volume of 520,462 compared to average share volume of 1.83 million. The market cap stands at $35.61 million.