High Performance (OTCMKTS:TBEV) Falls Further Down
For the past four sessions the stock of High Performance (OTCMKTS:TBEV) has been falling down wiping significant portions of its value each day. Yesterday it crashed by more than 14% and closed at $0.0012. If the downtrend continues TBEV might once again test the $0.001 mark. The peculiar thing about the performance of the ticker is that it began crashing on the same day the company announced the official sales launch of their High Performance Sports Drink.
The fact that the product is now available for purchase not only through the official website of the company but also on Amazon.com seems to have been insufficient to keep the company from nose-diving down the chart. Is there a chance for a bounce though?
Well, earlier this month TBEV were able to reverse their direction after hitting a low of $0.0008 and this time they could do it again. The problem is that the red flags surrounding the company have not become any less dangerous. According to the latest financial report as of April 30 TBEV had a little over $300 thousand in total assets consisting entirely of cash. At the same time the liabilities had surpassed $4.1 million.
We have also been warning you that the convertible debt the company has been forced to take on in order to fund its operations has been the cause of a crushing amount of dilution. Between March 20 and June 18 the outstanding shares ballooned from 212 million to 2.25 BILLION. More than half of the newly issued shares, or around 1.1 billion, came into existence as a conversion of debt at a price of just $0.0005. This took place just months after a 1-for-10 reverse split was performed.
Most likely in order to accommodate the further issuance of shares TBEV also decided to increase their authorized shares to 5 BILLION. And if you take a look at this 8-K filing submitted yesterday you will see that they are quickly utilizing the new A/S amount. TBEV entered into a settlement agreement with Centaurian Fund, L.P. and agreed to issue a new $240 thousand convertible note in exchange for the same amount of older convertible debt. This new note can be turned into shares at a 50% discount from the lowest closing bid price or closing sale price during the ten consecutive trading days immediately preceding the date of conversion. The note matures on December 3, 2015. As part of the agreement TBEV has set aside a reserve 500 million shares with another 250 million to be reserved no later than October 8.
Although the company is undoubtedly going to generate some revenues you should still approach their stock with caution. TBEV will need to find new sources of funds at far better terms or the continued dilution could depress the stock back down to the triple-zero price ranges.