TOTALLY HEMP CRAZY (OTCMKTS:THCZ) erased a part of its Tuesday’s gains in its last trading session. The stocks declined more than 5% to close at $0.0670. The initial surge was led by the announcement that Totally Hemp’s flagship product made its way to, Inc. (NASDAQ:AMZN) warehouse for distribution. The investors were encouraged with the news. The heavy buying pushed THCZ ticker more than 150% up, in spite of several red flags associated with the company.

The financial performance

As per the latest report filed by Totally Hemp for the quarter ended December 31, 2014, it had cash of 14,000. The current assets of $39,000 were much lower than the total liabilities of $372,000. The revenue for the quarter was just $489 with a net loss of $72,000. The low amount of cash Totally Hemp holds is indicative of its dismal financial performance.

The factors

There are no other supportive factors apart from the latest news that supports strong momentum in Totally Hemp stocks. It was evident when in very next trading session, the share prices gave away a large part of the previous day gains. The company needs to get support not only from charts but also from commercial operations.

 Lack of liquidity

The problem with Totally Hemp is liquidity. The company doesn’t have enough funds to finance its operations. Also, it is not clear from where this money comes from that can give it a stable direction. However, it to reach a decision that is friendly and beneficial to the company, as well as its investors. The management is working out on strategic plans to make the most of growing industry. Here, it is worth mentioning that in the second half of 2014 Totally Hemp outstanding shares surged to 294 million from 202 million. Such a rampant dilution poses a question on the financial performance of the company.

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