High Performance (OTCMKTS:TBEV) Elbows Its Way Out of Triple-Zero Land

Is there anything to suggest that investing in High Performance (OTCMKTS:TBEV) is a good call? Apparently, there are many people who think that it is. At least that’s what the performance from the last few days would suggest.

The volumes are relatively solid which, it must be said, is unusual for TBEV. Thanks to a few strong jumps, the ticker managed to sail from $0.0003 on August 6 all the way to yesterday’s close of $0.0011. This, by the way, is the highest close in just under five months.

The reason for all the excitement is the fact that, if a press release from August 6 is anything to go by, the production of TBEV‘s brand new sports drink should start today. Apparently, some people reckon that the PR alone isn’t enough and that’s why, over the last few days, they’ve been busy flooding the message boards and social media with positive posts about the company.

They seem pretty convinced that production is indeed about to start today, but if you take a closer look at the latest 10-Q, you’ll see that meeting deadlines isn’t among TBEV‘s finest traits. The report says that they expected to start shipping the new sports drinks before the end of June which clearly didn’t happen.

It also says that TBEV wasn’t in a particularly good shape at the end of April. Here’s a summary of the most important figures:

  • total assets: $308,010 in cash
  • current liabilities: $4,127,045
  • no revenues
  • quarterly operating loss: $283,485

A new website is also supposed to go live today, but as of the time of writing this article, the countdown timer that TBEV set up shows 0 hours, 0 minutes, and 0 seconds (screenshot link), and yet, the website is still not up.

All these problems, however, pale into insignificance when you compare them to the enormous elephant sitting inside TBEV‘s office which, as we have mentioned numerous times, is located in a residential house.

The said elephant is called toxic debt. The Convertible Notes Payable section of TBEV‘s 10-Q is quite long and if you’re not focused while reading it, you might be left a bit confused because it contains all sorts of notes that have already been converted and have absolutely no bearing on the company’s current situation. If you do concentrate, however, you’ll see that at the end of April, there was around $2.3 million worth convertible debt outstanding. Some of it is convertible at the usual discounts that range from 40% to 50%, but the rest can be turned into shares at a fixed price of $0.0001 per share.

The effects of the toxic debt on the share structure are… well… toxic. At the end of February, there were about 2.1 billion shares issued and outstanding. The management team then decided to effect a 1 for 10 reverse split which decreased the O/S count to about 213 million. That’s where it stood on March 20 when the company reported the financial results for the quarter ended January 31, but shortly after, the share printing started.

In a matter of just over a month, TBEV managed to issue a whopping 967,250,387 shares at an average rate of $0.0002 as a conversion of debt. In May a further 883,995,587 shares saw the light of day for the same reason. Curiously enough, TBEV decided not to disclose the rate at which the May shares got issued, but they couldn’t hide the fact that on June 18, less than four months after the reverse split, the O/S count was back at more than 2 billion.

Last month, the majority shareholders decided that the number of authorized shares also deserves a hike. It will be raised from 2.5 billion to 5 billion while the stock’s par value will be dropped from $0.001 to $0.00001 per share.

Now that you are aware of all the facts, you should be able to answer the question we posed at the very beginning of our article.

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