The stock of Minerco Resources, Inc. (OTCMKTS:MINE) has been on an absolute tear and for the last 12 sessions has not closed in the red even once. Yesterday it continued its climb by adding another 18% to its value and closing at $0.035 per share when just two weeks ago the stock was sitting at $0.0025. By now MINE has returned to price levels last visited more than two years ago at the start of 2012.
Looking at the chart one might think that such a sustained growth should be backed by a corresponding progress in the company’s business. Well, for now that is definitely not the case and MINE
‘s ascent has been fueled by hype and speculations alone.
At the end of January MINE
announced that orders for their COFFEE BOOST and RISE products have exceeded expectations resulting in expansion of the production runs that should have taken place at the end of February and the start of March. Sadly there have been no new updates about how things have been going but yesterday the company filed its financial report for the second quarter of its fiscal year.
As we said on a couple of occasions in our previous articles MINE
launched its products last September but the quarterly report for the period ending October 31 showed zero revenues after nearly a month of sales. Now investors can see what the numbers are after a full quarter of commercialization:
- $24 thousand cash
- $85 thousand total assets
- $2.8 million total liabilities
- $5147 sales
- $34 thousand net loss
We must say that 5 thousand in sales for four months are not exactly impressive but the picture is even grimmer – MINE
may have finally recorded some revenues on their balance sheet but they have not actually received even a dime because under the accounts receivable line we find the exact same number – $5147. Not to mention that MINE
incurred double that amount or – $13 thousand in cost of goods sold.
We also warned traders that the company is heavily reliant on fresh funds acquired through convertible promissory notes. The report shows that nothing has changed and as of March 20 the number of outstanding shares has reached 2.1 billion when at the end of July last year there were 1.1 billion shares. Around 600 million of the shares issued during the period had a conversion price between $0.0001 and $0.0004. The dilution is unlikely to stop any time soon when the company estimates that they will need additional $1.2 million in order to continue with their operations for the next twelve months.
With all that in mind investing in MINE
should be preceded by doing your own due diligence and careful consideration of all the possible risks. In the 8-K form filed on March 13 the company revealed that at the start of the month they applied for a new trademark – The Herbal Collection. Many traders speculate that this new trademark will be geared towards products containing marijuana or hemp extracts but as we said there have been no official announcements regarding this topic.
Another company that is forming an impressive chart pattern for the past couple of sessions is Viking Minerals, Inc. (OTCMKTS:VKML
). Yesterday it surged upwards by more than 50% and closed the day at $0.125. In the past the company has been targeted by paid pumps on numerous occasions but the recently appointed CEO and speculations about entering the marijuana industry seem to have changed the sentiment towards the stock.