High Performance (OTCMKTS:TBEV) Perks Up Despite Late Report

Yesterday High Performance Beverages Company (OTCMKTS:TBEV) closed 50% in the green despite failing to publish its quarterly report within the usual time frame. Even though all that the company put up was a notification of late filing, daily share volume increased to 393 million and TBEV closed at $0.0006.

The stock spent the last couple of months in the lower half of triple zero land for a good reason. When we last covered TBEV, things were far from rosy. The company had $397 thousand in cash, comprising total assets as of its previous quarterly report and had not generated a dime of revenue over the six months leading up to the quarterly.

The real issue however is with TBEV‘s share structure. The company executed a 1-for-10 reverse split in late February 2015 and thus decreased its outstanding shares from over 2 billion to the 212 million reported as of March 20, 2015.

Reverse splits are almost always bad news on the pink sheets as they are often executed so that the company can keep pumping out new shares and diluting further without going over its max authorized shares. In an amazing combo, TBEV managed to both dilute massively after the reverse split AND increase its maximum authorized shares too.

In a June 5 filing, TBEV announced that shareholders holding the majority voting power approved an increase of AS from 2.5 billion to 5 billion. This may be needed because as of that date TBEV already had 2.25 billion shares issued and outstanding and another reverse split coming less than four months after the last one would have just looked terrible.

The fact of the matter is that TBEV managed to dilute its common stock from 212 million common shares in March to 2.25 billion in June. Dilution of over 950% within a quarter is downright scary. The full details of how many shares were issued to whom should be available when the company does furnish its delayed quarterly report next week.