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By Boyan Angelov
Sep 02, 2014

Hemp, Inc. (HEMP) Ends The Trading Month At The $0.04 mark

Despite numerous attempts to get investors interested throughout August, Hemp, Inc. (HEMP) ended the month at a trading price of $0.04. This is the lowest HEMP's stock has been traded since January of this year.

Looking at the recent news around the company, this development may not be a surprise. HEMP has been relying on fluff press releases for the most part which does not often get reaction. The actual news around the company has not been very encouraging.HEMP_chart2908.png

For starters, in early August the Securities and Exchange Commission (SEC) charged a number of stock promoters for dump-and-dump schemes. Out of the six companies that were the target of the promotion campaigns, two were related to the marijuana sector, including Hemp, Inc. The company addressed the issue in a press release dated August 8 where it stated it was not a defendant in the case. Despite HEMP's statement, this news was a further blow for OTC marijuana stocks who have had these issues in the past.

The company's financial report for the second quarter ended June 30, 2014 did not have a positive effect for its stock. The quarterly report that ran a little late accounts for the following:

  • Cash: $42,8 thousand
  • Total current assets: $4,8 million
  • Total current liabilities: $876,2 thousand
  • Revenues: $2,3 million
  • Net income: $1,8 million

HEMP has continued to improve its asset supply while its revenues and net income have been solid. However, the company has also continued selling high amounts of stock for financing its operations. HEMP has recorded securities in the amount of $2,3 million for the second quarter of the fiscal year. Although that is much less than the $5,3 million in the first quarter, it still makes for a high amount. Another red flag is that the company has recorded $3,3 million in “other comprehensive losses” through June 30, 2014.

HEMP_logo.jpgThrough the various “news” items throughout August, HEMP seems to be showing a lack of initiative, as the first actual venture the company announced taking up was reported last Friday. In a press release, the company announced it had moved to its new decorticating plant in North Carolina. HEMP provided a photo from the site and gave an update regarding its future plans, as the company's CEO Bruce Perlowin stated that the venture plans to continue the processing of kenaf.

Since this news came out in the afternoon, it still remains to be seen how it will affect HEMP in the upcoming trading sessions. The only other venture the company has recently talked about is a joint venture with fellow OTC pink tier Resource Ventures, Inc. (REVI). The object of the deal is to commence publication of “The Hemp Nation Magazine”.

With the current hesitation of HEMP on the market and lack of news on the company's development, potential buyers should consider doing their due diligence on the penny stock before investing in its shares.

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