The Tripple Zero Stock of Active Helath Foods, Inc. (OTC:AHFD) Triples Market Value

Today’s stock in focus has been on a free fall for more than 12 months. Having gone all the way from the pink sheets quotes to the tripple zero zone, Active Helath Foods, Inc. (OTC:AHFD) has disappointed quite a few investors, which is why any positive move seems fairly exaggerated now. In this respect, it would hardly be reasonable to get our hopes on the stock up too much at the news that AHFD almost trippled in value yesterday.

Closing the session at $0.0025, AHFD soared by a whopping 178% on a record-breaking volume of 111 million. As drastic as it might seem at first sight, this move only managed to kick AHFD out of the twilight tripple-zero zone. For those of you who might have forgotten, AHFD used to be traded at $0.50 per share approx. 54 weeks ago. At $0.0025 per share, AHFD is now worth 99.50% less as compared to mid-December 2011.

Since AHFD does not seem to have undergone any full-blown paid advertising campaigns since late-July, we could not attribute its surpsising jump on the charts to any of the pump jobs out there. As it is, the company’s spectacular gain came hard on the heels of a merger agreement that has just been announced by the managers themselves, whereby the energy bars producer will acquire all the shares of the privately owned Manos Beverages, Inc. at a 3-to-1 ratio.

The fact that the acquisition is solely based on common stock is indicative of AHFD‘s dire financial health. Here are the highlights as of Sept. 30, 2012:

• $6 thousand of cash;
• $83 thousand in inventory as compared to only $31 thousand of generated revenue;
• current ratio of 0.19 relating to a working capital deficit of $472K;
• no long-term assets whatsoever;
• quarterly net loss of $913 thousand preceded by an even bigger three-month loss of $3.57 million;
• total accumulated deficit of $4.9 million.

In addition, AHFD‘s inventory has substantially exceeded the company’s revenues for the last four quarters on record, which questions the efficiency of its marketing strategy regarding its supposedly high-quality products.

In the light of AHFD‘s dismal finances, it is no wonder that the company’s shares have been on the slope for more than a year now. How exactly the merger agreement mentioned above will help buck the trend has yet to be seen. Despite yesterday’s breath of fresh air, the road to a complete reversal will certainly be full of challenges.