Stevia First Corp (OTCMKTS:STVF) With an Intriguing Climb

Trading for Stevia First Corp (OTCMKTS:STVF) started back in March 2012 and it’s fair to say that the ticker wasn’t off to the best of starts. Just weeks after the first active sessions, the paid pumpers picked up STVF and initiated a campaign with a reported budget of more than $1.2 million. The effects, predictably, were absolutely appalling. Within a matter of less than a month, the price plummeted from more than $3.20 all the way to $0.68 representing around 80% in losses for the unfortunate investors that got a bit carried away with the hype.

It’s fair to say that people took notice of the diabolical drop and remained somewhat reserved towards the stock over the following months. There were a couple of spikes in September 2012 and in January 2013, but on the whole, the direction has been towards the bottom of the charts. During the last couple of weeks, however, we have seen something of a rally. It’s not the violent surge that we’re normally used to seeing from volatile penny stocks, and if we have to be fastidious, we might even say that the ticker’s movement is rather slow. That, however, doesn’t change the fact that STVF has not registered a red session since October 7 and we can’t also ignore the massive trading volume yesterday – more than 870 thousand shares changed hands resulting in a price increase of 12%. So, what’s going on?

Truth be told, there doesn’t seem to be any immediate reason for the massive interest from yesterday. Luckily for the people who have invested in STVF in the long run, there seems to be no traceable promotion running for the ticker at the moment which is definitely a good thing. The recent press releases do sound good, but the latest one got published on October 16 and we really doubt that it still has an effect on the way investors treat the ticker. Most likely, the prolonged run in the right direction has drawn in some attention and people simply decided to jump in on the bandwagon. The question is: “Will the surge continue?”.

It must be said that STVF have gone through quite a lot since we last wrote about them. Back in March 2012, they had just become a publicly traded company and had next to nothing in terms of assets. A year and a half later, their balance sheet is still not perfect, but at least they have some cash reserves. Here’s a summary of the most important figures found in the latest 10-Q:

• cash: $1.1 million
• current assets: $1.2 million
• current liabilities: $1.6 million
• no revenue
• quarterly net loss: $899 thousand

Back in June, they managed to raise $1,250,000 by selling more than 3.6 million shares of common stock as well as some warrants to three unnamed investors. The purchase price comes in at $0.34 which is not unreasonable considering the values from four months ago. In addition to this, it’s pretty clear that they were in a desperate need of cash. How long will it last though?

Well, a press release recently informed us that they have signed their first distribution agreement which is definitely a good thing since it means that revenue generation should start soon. It also means, however, that STVF are facing some operating expenses related to the manufacturing of the products which in turn raises further question marks around a potential positive bottom line. Working at a loss, as you might imagine, raises the chances of further dilution and that, we reckon, is a risk worth considering before taking the plunge.

You should also probably keep in mind the fact that some people on Seeking Alpha as well as other websites are being a bit too optimistic about the future. Contributors (disclosing a long position in STVF) have written articles claiming that the company is in for a breakthrough and that large cap enterprises like The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP) should start thinking about contracting STVF, but we’re not sure if it isn’t too early for such forward-looking suggestions considering the fact that the small cap stevia venture has yet to show us any results of the sales of commercial products.

Let’s also keep in mind that STVF‘s Chairman of the Board, Dr. Avtar Dhillon, holds the same position at two other penny stocks – OncoSec Medical Inc (OTCMKTS:ONCS) (whose stock performance over the last months has been somewhat erratic) and Arch Therapeutics Inc (OTCBB:ARTH) (who got a $3 million pump back in July resulting in some devastating losses).