Creative Edge Nutrition Inc (OTCMKTS:FITX) Tries to Get Back On its Feet
There’s no beating about the bush, Creative Edge Nutrition Inc (OTCMKTS:FITX)’s stock performance over the last twelve months has been absolutely catastrophic. The chart on the right clearly shows it and the people who have lost quite a lot of money can confirm. You’re probably wondering about the reasons.
The pumpers have certainly played their part. Between September 2012 and July 2013 we have received more than 210 emails touting FITX as a great investment opportunity. Coincidentally or not, virtually all the campaigns were given a further boost by quite a lot of PR activity from the company and the chart shows that the increased awareness certainly gave the price a few nudges. The peaks however, were extremely short-lived and were followed by colossal losses leading to a price depreciation of a staggering 96% in one year.
Now, three months after we received the last email alert, the company’s PR department has kicked it into high gear once again but this time, the pumpers seem quiet, at least for now. Hoping that things will remain like this, we decided to see what FITX have been up to over the last ninety days.
The announcements certainly sound exciting. Over the last few weeks they have informed us about a distribution agreement with an enterprise quoted as the “#1 sports nutrition distributor in the US”, about the completion of the first shipments to an online retailer that is also said to be a “global leader”, about the formation of a new subsidiary that will run the medical marijuana business and about a new contract with Endexx Corp (OTCMKTS:EDXC) who will provide some clever software.
Unfortunately, the financial statement that covers the second quarter of 2013 doesn’t look quite so bright. Here’s how things stood as of June 30:
- cash: $41 thousand
- current assets: $699 thousand
- current liabilities: $2.2 million
- quarterly revenue: $646 thousand
- quarterly net loss: $1.2 million
When you compare the figures above with the Q1 results, you’ll see that FITX have indeed managed to give their revenues a boost, but they’ve also burned through nearly 50% of their cash reserves and they have increased the liabilities. The net loss is bigger as well and this goes to show that they still have a very long way to go until they achieve profitability. The same thing, however, can be said about a large portion of the small cap ventures that are trying really hard to achieve something. With FITX, there’s another problem.
A problem that has played a huge part in depressing the price over the last few months: dilution. Between the start of April and May 23, FITX issued a whopping 653 million shares as a conversion of debt or in consideration for services. What’s more, all of them were valued at $0.001 per share which presents an opportunity for a healthy profit even at these depressed prices.
According to the company’s profile at OTC Markets’ website, the number of outstanding shares is getting precariously close to the maximum authorized capital which might suggest that another increase is coming (they have already boosted the authorized stock three times between October 2012 and April 2013).
All in all, even without the pumpers’ intervention, FITX remains as risky an investment as ever. Treading carefully and considering all the options is absolutely crucial.
