Alkaline Water Company Inc (OTCMKTS:WTER) Surges On Massive Volume

Yesterday investors shifted over 570 thousand of the shares of Alkaline Water Company Inc (OTCMKTS:WTER). The increase was staggering – yesterday’s volume was over 10 times higher the than volume for the previous session and over 17 times higher than the monthly average. The intense buying pushed the stock to a close 12.12% in the green at $1.85 per share.

It seems that the torrent of PRs that has been coming from WTER is starting to get investors excited. In around a month the company has announced receiving its first purchase order from Costco, entering into a direct to store distribution agreement with General Distributors Inc., and the expansion into Albertsons-affiliated Tom Thumb Food and Pharmacy Stores. The PR that most likely sparked yesterday’s chart climb came after the end of Tuesday’s trading and talked about WTER‘s co-packing agreement with Texas-based CForce Bottling, a company that is “owned and operated by businesswoman and majority owner Gena Norris in partnership with her noted husband Chuck”.

Not to mention that earlier this month WTER reported record revenues of over $1 million for the month of March and over $2 million for the quarter. The company expects its revenues for the fiscal year ended March 31, 2016 to exceed $7 million. For a pennystock achieving such results is no small feat but WTER expect to do even better in the future – for 2017 they project an increase in revenues of over 100% to $18 million. Is this a realistic goal, though? Keep in mind that the company actually failed to meet its target earnings goals for the 2015-2016 fiscal year as well as falling short of their $10 million sales forecast.

WTER finished the quarter ended December 31, 2015, with rather limited cash reserves of $110 thousand and a sizable working capital deficit of over $1.7 million. On March 23, however, they completed a $2.97 million securities offering which provided a much needed boost to their financials. There is one huge red flag though – in order to raise the money WTER sold 9 million shares priced at $0.33 each and warrants for the purchase of 4.5 million shares with an exercise price of $0.50. As result of the issuance of so many shares WTER‘s outstanding shares more than doubled – from 5.7 million as of February 22 to 14.7 million following the offering.

The threat of these cheap shares getting unleashed on the open market should be taken into consideration when planning your position in WTER‘s stock. Don’t forget that back in January the company issued 3 million options with an exercise price of $0.52 to its officers and directors and 1.31 million options with the same exercise price to employees. 

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