Growblox Sciences Inc (OTCMKTS:GBLX) is Unable to Bounce

8GBLX.pngThe chart on the right belongs to Growblox Sciences Inc (OTCMKTS:GBLX) and it’s pretty clear from it that the ticker’s performance hasn’t really been all that great. The company announced its intentions to enter the marijuana industry back in March and the hype and excitement that followed resulted in an absolutely astonishing run.

In just three sessions GBLX managed to climb from around $0.60 to $7.50. Unfortunately, maintaining these sort of prices proved to be impossible and a month later, the ticker was back below the $2 mark. Then, the pumpers came along and tried to push it back up.

They failed. The $150 thousand landing page set up by MJ Stock Report did result in some more significant volumes, but the ticker refused to go back to its previous heights. The company issued a couple of press releases as well, but they too proved to be ineffective at lifting GBLX off the ground. On June 17, for example, they announced that they have received a permit for their cultivation facility, and following this, the ticker did gain some ground and jumped from $1.33 to over $1.50. Unfortunately, it then came back down and just two days later, it was back where it had started.

There’s only one question that springs to mind: “Why is GBLX refusing to make any sort of significant climb?“.

There could be a couple of reasons for this. GBLX claim to be a really serious company with some huge potential to become a renowned name in the pot industry. Yet, they appear to be using a virtual office as the location of their headquarters. The same address, by the way, is also employed by two other penny stocks – First Liberty Power Corp (OTCMKTS:FLPC) and Renewable Fuel Corp (OTCBB:RWFC).

Then you have the management team. As you probably know, GBLX‘s CEO is called Craig Ellins and a quick research reveals that he was once involved with Growlife Inc (OTCMKTS:PHOT) – a pot stock that got suspended by the SEC due to “potentially manipulative transactions“. Although PHOT was once considered to be among the most solid marijuana related companies, it’s now on the Gray Market and, at least in terms of stock performance, it’s not doing particularly well.

The red flags around GBLX don’t end there. They published the 10-K for the period ended March 31 last week and it showed that the company is not exactly thriving. Here’s a summary of the most important figures:

  • cash: $339 thousand
  • current assets: $489 thousand
  • current liabilities: $1.5 million
  • NO revenue
  • net loss: $655 thousand

As you can see, there’s quite a lot of issues that need to be addressed immediately if GBLX is to succeed, but the company’s financial situation is not even the biggest problem. If you go through the filings, you’ll see that between February 14, 2014 and June 5, 2014, GBLX‘s O/S count grew from 850,104 to 23,331,932. Who received the newly printed shares?

A portion of them were issued as part of a few million investment units that were sold at $0.50 a piece while others saw the light of day as a conversion of debt at $0.25 per share. Currently, GBLX stands at just over $1.20 and, naturally enough, a question pops up: “Will the people who got the discounted stock hold on to it, or will they decide to release it on the open market and make some quick and easy money?“.

We’ll leave it up to you to get to the answer.

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