Creative Edge Nutrition Inc (OTCMKTS:FITX) Hyped Up Again

11FITX.pngOn Monday Creative Edge Nutrition Inc (OTCMKTS:FITX) wrote an open letter to their shareholders basically explaining how big a year this has been for FITX. We couldn’t agree more. All you need to do is check out the press releases and you’ll be amazed at how many things they’ve managed to achieve in such a small time frame.

They have opened new websites, they’ve introduced new products, they have managed to make a name for themselves and they even entered the much hyped about medical marijuana business. They’ve been dealing with cannabis for only a couple of months but they already announced two products and about a month ago they said that they’re going to make hemp-based additives for tea and coffee. We’ve no idea what marijuana has to do with either coffee, or tea but it would seem that as soon as people hear about weed, they get excited, so if FITX manage to put it on the market, it will probably work. Normally, our concern would be just that – putting the product on the market, but in the case of FITX, we know that they can do it and they have the financial statements to prove it.

If you put the report for the first quarter for 2013 and the one for the same period of 2012 side by side, you will see the following figures:

  • cash (2013): $80 thousand
  • cash (2012): $1,510
  • current assets (2013): $433 thousand
  • current assets (2012): $1,510
  • current liabilities (2013): $1.7 million
  • current liabilities (2012): $387 thousand
  • quarterly revenue (2013): $524 thousand
  • quarterly revenue (2012): $0
  • quarterly net loss (2013): $1.1 million
  • quarterly net loss (2012): $61 thousand

It’s pretty clear that they’ve made quite a lot of progress and the press releases that have been coming out of their headquarters recently suggest that they will continue to move in the right direction. Just two weeks ago they said that they are now officially an approved vendor of Amazon.com which is great news. Yesterday, they said that they’ve also signed a contract with Bodybuilding.com and after spending just two minutes on it, we can see that this is just about the perfect website for selling your nutritional supplements. FITX even published the two contracts on their OTC Markets page as proof that they’re not lying.

So, the logical question now is: “If they are doing so well, then why is the ticker standing deep in double-zero territory?”. That’s a really good question, actually and there could be a couple of reasons for this.

Dilution has certainly played its part. Since we had the report for the first quarter of 2012 opened, we decided to see how many FITX shares were issued and outstanding back then. The number is 334 million. Right now it amounts to a whopping 1.7 billion and while there was a stock split back in April (badly disguised as a stock dividend), it was only a 1.2 for 1, so its effect wasn’t that dramatic.

202FITX_logo.jpgWhat did have quite a catastrophic effect on the price, however, was the horrendous promotions. The first emails flew in back in September and the number of alerts received since then is absolutely astonishing – 206. The value? Well, that one has gone down by a massive 94% and every time there’s a new promotional campaign people think that this might be the one where the ticker does something different, but they’re always met by the same exact pattern of an upward trend for a day or two followed by a massive crash. The latest promotion is from yesterday and it did push FITX about 17% in the green. Right now, about an hour into today’s session, it’s standing around 10% below yesterday’s close.

We wonder why FITX‘s management team refuse to comment on that and instead prefer to stick to the”it’s been a great year” cliches. Who knows? If they do tell us a few things about the stock performance, the people who steer other OTC ventures like Arch Therapeutics Inc (OTCBB:ARTH) and Premier Brands, Inc. f/k/a Tracksoft Systems Inc (OTCMKTS:BRND) might decide to follow suit. They certainly have a lot of explaining to do.

You may also like...