High Performance Bev (OTCMKTS:TBEV) Stirred Up

TBEV.pngFrom $0.0013 to $0.0114 in just two sessions. That’s what High Performance Bev (OTCMKTS:TBEV) did this week and there are apparently some people who believe that it has enough steam to continue going up. We know the reason for the dramatic appreciation and we can understand investors’ excitement.

Back in October 2013, TBEV acquired a license to manufacture and market the Throwdown line of performance drinks. As you can probably guess, this sort of business plan requires some solid financials and according to the latest 10-Q, TBEV doesn’t have them.

Here’s a summary of the most important figures as of January 31:

  • cash: $12 thousand
  • total assets: $43 thousand
  • current liabilities: $1.4 million
  • quarterly revenues: $1,108
  • loss from operations: $78 thousand

Clearly, the company’s financial situation is far from rosy, but apparently, this is about to change. Forty-five minutes before Wednesday’s opening bell, TBEV issued a press release with which they said that they have signed a $1.5 million financing deal. They talked at some considerable length about how hard it was to find a financing partner, but they somehow forgot to mention his name or, in fact, any details around the agreement.

Nevertheless, investors seem pretty enthusiastic about it and in a matter of just two sessions, they traded around $2 million worth of stock. The fresh cash injection should help the company take its business plan off the ground, but will it be enough? Let’s take a look at TBEV‘s history and see if it can give us the answer.

A year ago, the company was called Dethrone Royalty Holdings Inc (traded under the DRHC symbol) and it was trying to market another brand of beverages called Dethrone. Their success was dependent on keeping the licensing agreement for the Dethrone products active and, as you can see from some of our articles, in order to do that, they needed to log some pretty serious revenue figures. They failed and in October, the agreement was terminated.

TBEV‘s current situation is pretty much the same. The only difference is, the required sales figures are not as huge. So, will it be second time lucky? You’re the one who needs to weigh the odds.

But while you’re contemplating the options, we would like to draw your attention to a very serious problem – toxic debt. Convertible notes have been issued by the bucketload over the years and if the creditors decide to take advantage of the conversion features (which carry some hefty discounts), the ticker could be in for a crash.

TBEV_logo.pngBetween August 2013 and January 2014, around $37 thousand worth of debt was turned into 23 million shares and there is one thing which could suggest that a lot more stock has been issued in the period subsequent to the publishing of the report.

The cumulative trading volume registered over the last two sessions amounts to around 278 million shares. According to the 10-Q, the O/S count on April 15 stood at just 134 million. As you probably know, it’s not impossible for the daily volume to exceed the float, but it is an extremely rare occurrence.

That’s why, despite the fresh financing and the seemingly interesting products, treading carefully might not be a bad call.

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