New Quarterly Report Shows The Horrific Dilution Of HIGH PERFORMANCE (OTCMKTS:TBEV)

The stock of HIGH PERFORMANCE (OTCMKTS:TBEV) finished yesterday’s session with a massive gain of 60% at $0.0008 per share. The traded volume for the day of 426 million shares was nearly three times higher than the monthly average for the stock. An impressive performance indeed but is it a wise decision to bet your money on the stock?

In a new shareholder update published early in the morning before the start of yesterday’s trading TBEV announced some encouraging news. The company is moving forwards with the production run of the first product of their High Performance Beverage Sports Drink. The bottles, labels and proprietary formulation have been sent to the co-packer and the official production date remains June 29, 2015. TBEV also announced that a new corporate website is expected to be completed and put online by the first week of July. The company seems to be rapidly moving in the right direction but before you get overly-enthusiastic let us draw your attention towards the last paragraph of yesterday’s PR.

It states that TBEV are “in negotiations to raise significant working capital”. In the world of pennystocks this usually means that more convertible debt will be piled on the balance sheet. The problem is that TBEV’s financials are already extremely depressing. The quarterly report covering the period ending April 30 finally got filed yesterday and it contained the following numbers:

• $308 thousand cash and total assets!!!
• $4.1 million total liabilities
• ZERO revenues
• $283 thousand operating loss

Nearly half of the reported liabilities, or $2,188,132 to be precise, consist of senior convertible notes payable. During the quarter TBEV issued 967,250,387 shares as a conversion of debt; 93 million were issued through the cashless exercise of warrants. In May 883 million shares saw the light of day as a conversion of notes while another 81.4 million shares were again issued through a cashless exercise of a warrant. As of June 18 TBEV reported 2.25 BILLION outstanding shares.

The picture, however, is much grimmer. Back in February TBEV implemented a 1-for-10 reverse split that left them with 212 million outstanding shares. In short, over 2 BILLION shares got issued in just four months. The decision to increase the authorized shares from 2.5 BILLION to 5 BILLION could very well signal that the conversions may not be coming to an end anytime soon.

It is understandable that the upcoming launch of the first TBEV beverage might generate some positive momentum and their share price could move upwards but the risks remain extremely dangerous. The negative effects of the absolutely massive dilution could cause the stock to crash and any gains could be obliterated in a matter of just a few sessions. The ticker already showed that it is capable of doing exactly that when it plunged from 1 cent around the start of March to $0.0001 in May. 

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