GROGENESIS INC (OTCMKTS:GROG) is trading close to its 52-weeks. In last trading session, the stock price surged 7.22% to close at $1.04. The stock has been on a upward trend in this week and has managed to close above the key level of a dollar per share. Since the start of the month, GroGenesis haven’t recorded a single session ending in red. Here, it is important to understand is the sharp rise shown by the stock warranted?

The products

GroGenesis have two lead products, the AgraBlast and the AgraBurst. The company issued the last press release on March 31 and confirmed the positive results from the trials conducted in Australia. It was evident that the crops treated with its product AgraBurst managed to record a yield 1 to 3 tons per hectare versus the yield of untreated areas.

The performance

The company’s financial report for the quarter ended November 30, 2014 states that GroGenesis recorded $147 in cash. The total liabilities and total current assets came at $271,000 and $20, 806. It reported revenue figure of a zero, and net loss was $69,000. That is right; GroGenesis generated zero revenue and have less than $200 in reserves. Considering the financials, it is clear that they have a overly-inflated market cap of close to $79 million. The company is required to file its financial report by April 15 and if once again the financial numbers are dismal, the stock can decline to the bottom of the chart.

The red flags

GROGENESIS INC (OTCMKTS:GROG) is dealing with several other problems. As of January 9, the company owned 81.5 million outstanding shares and most of them issued at discounted prices. Back in 2012, the company sold 1.6 million shares at discounted rate of $0.02. However, the 25-for-1 split occurred at the end of 2013 has increased the number of shares to 40 million.

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