Healthy Coffee International Inc (OTCMKTS:HCEI) Rises From the Ashes

In February 2009, Healthy Coffee International Inc (OTCMKTS:HCEI) announced that they have hired a new Vice President called Jeff Schlegel who said that the company ‘will be the next Starbucks coffee story in five years or so.‘ About a year later, HCEI issued another press release and said that they want to up-list the stock to AMEX as soon as possible. In addition to this, the company CEO, Rick Aguiluz, talked about things like ‘massive projected increase in sales and heavy demand for our products.

It’s been well over five years since then. So how are things looking today?

Well, the AMEX up-listing didn’t really work. HCEI is still traded on the Pink tier of the OTC Markets and it’s still using the alternative reporting standards. And while we’re on the subject of financial reports, we should probably also note that HCEI is still a long way away from competing with Starbucks. Here’s what the figures in the 2014 annual statement show:

  • cash: $13 thousand
  • current assets: $351 thousand
  • current liabilities: $121 thousand
  • revenue: $415 thousand
  • net income: $29 thousand

Indeed, other OTC companies are in a much worse state than this, but you still have to agree that HCEI‘s financials are far from perfect. And they do show that when the people at the helm of penny stock enterprises write their press releases, they should be really careful with the promises and projections they’re making.

Not surprisingly, the company’s failure to meet its previously set goals has affected the stock performance. If you take a look at the chart from the last month or so, you’ll see that HCEI plummeted from $0.80 on March 30 all the way to $0.001 on May 7. Now, though, it seems to be coming back up.

Over the last two sessions, the ticker managed to gain as much as 240% and it’s now sitting at $0.0034 per share. Yesterday, it also logged a dollar volume of over $180 thousand which goes to show that a lot of people are putting their money on the line.

The reason for this lies with another wave of optimistic press releases. Some new additions to the management team have been made lately and yesterday, HCEI announced that Danny Luv, the company spokesman, will be participating in a bodybuilding competition in California on Memorial Day. Sure enough, there will be other HCEI representatives there and there will also be a tent which will promote the products.

Apparently, this is a good enough reason for some people to reach for their wallets, but they should probably take one more look at our first paragraphs and see how things turned up the last time HCEI were too optimistic about their future.

And even if you decide to disregard the past performance, you must consider the dilution which, by the looks of things, is absolutely horrendous. HCEI executed its fourth reverse split in March 2013 which brought the number of issued and outstanding shares down to just 46 thousand. Over the next nine months, it grew to a little less than 180 million, but during 2014, the printing press was put on standby and the O/S count hardly moved. According to the company profile at the OTC Markets, however, it was sitting at almost 3.3 billion a little less than a month ago.

We’re quite eager to see the next report and find out where all the stock had gone. In the meantime, you should probably watch your step.

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