Will HIGH PERFORMANCE (OTCMKTS:TBEV) Hold On To Its Gains?
At the start of August the stock of High Performance Beverages Co (OTCMKTS:TBEV) was sitting deep into the triple-zero price ranges at $0.0003 per share. Thanks to a strong uptrend, however, on August 31 the company closed at $0.0027 for a total gain of 800%. A truly impressive performance but TBEV might have reached some unstable prices – the stock has closed in the red for the past two sessions. Yesterday it lost 8% of its value closing at $0.0023.
It is true that investors had a reason to get excited about the stock. TBEV completed successfully the initial test run of their High Performance Sports Drink of 60, 000 bottles. As of August 24 the drinks were available for pre-order while as of September 5 they will also be sold on Amazon.com. An impressive achievement for a pennystock, indeed. In an interview the CEO of TBEV even stated that the company will the flip the industry around. A noble goal but is TBEV capable of doing it when according to the latest financial report as of April 30 they had:
• $308,010 cash and total assets!!!
• $4.12 million total liabilities
• Zero revenues
• $283 thousand loss from operations
With a working capital deficit of $3.8 million and a net loss for the nine months ended April 30 of $3.5 million TBEV fails to inspire much confidence. Even if the company finally starts generating some revenues the balance sheet will still raise a lot of concerns.
Although the lack of capital is a rather serious issue investors have a lot more to worry about – the common stock of the company has been experiencing a devastating dilution. In the span of three months TBEV issued over 2 BILLION shares bringing the outstanding shares from 212 million as of March 20 to 2.25 billion as of June 18. Almost the entire amount came into existence as a conversion of debt with 1.1 billion of the shares being priced at just $0.0005. And this is after the 1-for-10 reverse split performed in February. In the same interview the CEO said the they will not be relying on convertible notes in the future but investors should keep in mind that TBEV still increased its authorized amount of shares from 2.5 billion to 5 billion.
If High Performance Beverages fail to keep the hype going they could start wiping last month’s gains at an even faster rate. The red flags surrounding TBEV are simply far too serious to be underestimated. Do you own research before committing to any trades.
