Crypto has been on a run the last few days, briefly pushing Bitcoin to its new ATH of over $68 thousand while Ether broke its personal record at $4,840. The surge in crypto prices is a sign of the times as increasing numbers of investors put their profits in crypto. But it has also created an opportunity for a sympathy play among crypto related stocks such as the penny stock, Nate’s Mining (OTC: NHMD), which has only recently transitioned to the crypto sphere. This penny stock has a low float of 381 million according to its OTC profile, making it one to watch as it builds up its mining operation.

Catalysts

A subsidiary of Nate’s Food Co., NHMD famously left the food industry at the end of September to focus instead on crypto mining. This pivot inspired a CoinDesk article about the company and has put NHMD on many investors radars. According to NHMD, it plans to purchase ASIC computers – computers created specifically for cryptocurrency mining – before storing its technology at 3rd party datacenters in exchange for a fee. Two weeks after setting up its initial operations with an expected daily mining capacity of 200 TH/s, the company announced it was already generating revenue. After this progress, NHMD shared that “the future we are building is coming into focus”.

Like other crypto mining companies such as Sphere 3D (NASDAQ: ANY) and Fernhill Corp. (OTC: FERN), this penny stock will only mine Bitcoin. The company has already finalized a 9-month lease for Bitmain’s S-17s bitcoin mining equipment to get started, but is continuing discussions with manufactures and resellers to acquire more equipment and capacity as well.

Since then, NHMD has started mining at an operational capacity of 1,500Th/s. But the company’s ultimate goal is to achieve 25,000 Th/s in mining capacity over the next 18 – 24 months – an extension of its initial 12 month timeline. At its current capacity, the company expects to generate approximately $17,060 in revenue per month or $568.95 per day. But according to its last update, the estimated daily payout is $503.01 per day or $392.17 after accounting for expenses. If NHMD acquires 25,000 TH/s then monthly revenue could be around $284,333.

Setting Bitcoin aside for a moment, NHMD’s food development division will cease product manufacturing and development of new food products but is exploring options to license developed products such as a “a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can” as well as monetizing its other proprietary products.

But it hasn’t been all crypto and pancakes for NHMD’s shareholders. Some have accused NHMD of dilution which appears to be the case as the company’s latest quarterly report disclosed that as of August 31st, “537,774,616 shares of common stock were issued and outstanding”. Since then the company’s share structure has changed to reflect an OS of 543,024,616 – a difference of 5.25 million shares.

The company has responded to these complaints saying that it confirmed with its transfer agent that no shares have been deposited with DTC since 2018. In that case no shares would have been added to the tradable float for the last 3 years leaving the float at roughly 381 million.

Media Sentiment

@greatstockpicks Clearly, the secret to a good CoinDesk article is pancakes and bitcoin

Technical Analysis

penny stock NHMD chart

NHMD is currently trading at $.005 and has a clear support at .0039. The resistance formed at .0054, with a secondary resistance at .0062. The MACD has had a bearish crossover and the RSI is currently at 47.85. Despite a dip at the start of the month, accumulation is gradually moving upwards again.

Should You Buy

NHMD is one of many companies that have made the jump to crypto after finding a lack of value in its former business model. While the company has been very open and communicative regarding its progress, investors may be taking a risk by investing in such a new entrant to the crypto mining field. That being said, NHMD’s goal of becoming a mining penny stock with 25,000 TH/s gives the company a promising outlook for the future. If it continues to make progress in ramping up its terra hash capacity, then NHMD could see a retracement to its resistance level at $.0062.

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