High Performance (OTCMKTS:TBEV) Fails To Move
On Tuesday High Performance Beverages Co (OTCMTS:TBEV) posted an astonishing gain of exactly 100% moving from $0.0002 to $0.0004. The volume for the session reached the unprecedented amount of 852 million shares. Yesterday, however, the company failed to sustain its upwards direction. The stock opened at $0.00045, moved to a high of the day of $0.00071 but at the time of the closing bell had slid back down to $0.0004 finishing the session flat. With another 688 million shares changing hands the dollar value for the session surpassed $400 thousand.
Pennystocks sitting so deep into the triple-zero price ranges are indeed prone to making huge moves on the chart but is TBEV capable of forming a more prolonged recovery? The last PR published by the company announced that they are moving closer and closer to launching the production of their High Performance Sports Beverage. The first production run is set for June 29. If this time the company fulfills its plans investors could show increased support for the stock.
Keep in mind that nearly a year ago TBEV made almost the exact same announcement. Back then the company had a licensing agreement with Throwdown Industries LLC and they stated that a production run of the beverages was being initiated. Well, that didn’t happen and on January 15, 2015, the licensing agreement was terminated. So now TBEV are going to produce their beverages under their own brand.
Unfortunately, the risks around TBEV are both numerous and extremely serious. The latest quarterly report showed that at the end of January they had:
• $397 thousand cash and total assets!!!
• $4.7 million total current liabilities
• $ZERO revenues
• $1.7 million net loss
With a working capital deficit of over $4 million and a net loss of $3.5 million for the first six months of their current fiscal year the financial state of the company doesn’t inspire much confidence.
But now let’s move on to an even more depressing matter – the share structure of the company. At the end of February TBEV implemented a 1-for-10 reverse split thanks to which their outstanding shares decreased from 2.1 billion to 212 million as of March 20. Wait a minute, didn’t TBEV register over 852 million traded shares just two days ago? This may mean that in the span of just two months the O/S of the company increased by more than four times. We won’t know the exact number of shares that have been issued recently until the next quarterly that should be filed by mid-June.
What we do know though is that at the end of January TBEV had over $2 million in outstanding convertible notes that could be turned into common shares either at a massive discount to the market price or at a fixed conversion price of $0.0001. A $800 thousand convertible note, if it hasn’t already been converted into common shares, is going to reach maturity and will become payable on May 28.
The red flags should not be underestimated in the slightest. Even if the stock moves in a positive direction in the weeks leading up to the production run the crushing dilution could very quickly depress the ticker right back down. Do extensive due diligence and set appropriate time horizons for your trades.
