Fresh Healthy Vending International Inc (OTCBB:VEND) continues to trade strong just under a $0.41; the stock commands significant interest from investors who are speculating on a move past $0.40 and a breakout to new levels. Everyone knows VEND is a stock that loves to make spectacular gains as it ran from $0.08 to a high of $0.70 at the beginning of the New Year on massive volume. The stock ran over 750%+.
VEND has been on an aggressive growth path. Online sources show that it has over 250 active franchises, operates across 44 states and internationally, over 3,000 healthy vending machines delivered, and over 3,500 healthy vending machines sold. VEND is the largest healthy vending franchise in the world. It is the pioneer in the healthy vending concept and continues to capitalize on a growing market trend of health conscious consumers who want healthy foods. As obesity continues to be an epidemic in the United States, VEND will be able to deliver customers what they want while staying true to their mission and values. With roughly 35% of men and 37% of women obese, VEND is tapping into a segment that is only growing. One in three children are obese or overweight. Healthy vending is now the most exciting and fastest growing category in vending and VEND is the leader in its industry. The vending machine market is approximately a $30B industry.
The company recently announced that it had inked an agreement for exclusive rights to a revolutionary Frozen Yogurt robot kiosk. Frozen Yogurt is a huge industry itself. According to IBIS, it is a $2B industry and growing rapidly at an annual rate of 18.2%. The industry is becoming more saturated. The robot kiosk is made by Robofusion’s interactive robot kiosks. The Cube is fully automated, delivering up to 60 servings per hour of customized frozen yogurt goodness. Customers can layer or blend up to three froyo flavors (of nine options) and choose from six toppings. As the pioneer in the fresh healthy vending space, VEND is looking for that next great idea that could diversify its Company’s offerings and increase our future growth potential.
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VEND recently released its quarterly earnings reports for the 3 months ending December. According to our online sources and its 10-Q, its revenues increased 38.3% from $1.17M to $1.62M. The majority of the revenue increase was due to the increased sales in healthy vending machines. Gross margins increased year-over-year by 27.7% from $602k to $769k. VEND had an increase in its net loss from $792k to $899k. The increase in net loss resulted from a lower gross margin percentage, as well as increased interest expense, accretion of discount, and derivative liability loss.
It also states that the company is running low on cash. It used cash on hand to retire liabilities associated with the franchise rescissions. VEND has consumed the vast majority of its available cash, including the cash proceeds from the sale of our common stock received in July of 2013 and the issuance of several debt instruments. In order to ensure sufficient liquidity for our continuing operations, we will require additional capital financing in the form of either debt or equity (or a combination thereof) financing. This means there will likely be dilution in the company’s future.
In other news, VEND has announced a new Director of Business Development, Craig Stein. Craig is an industry veteran whose main purpose will be to help grow and develop the robot frozen yogurt kiosk. Stein is a business development expert with over 15 years of business-to-business and business-to-consumer experience in fields including advertising, consumer products and technology commercialization. In addition, it has hired a new Chief Marketing Officer, Paul Schmidt who brings over 24 years of industry experience and was the former Juice It Up! COO. These two hires show VEND dedication to see continue growth and success in its current markets and new markets where it is diversifying into.
VEND is real company, with real products in industry that is poised for growth and has all of the right catalysts. Fresh Healthy Vending (VEND) was formerly known as Green 4 Media. VEND is a franchisor of healthy drinks and snack vending machines, and micro markets that feature cashless payment devices and remote monitoring software. The company’s primary product offering in healthy vending machines are natural, organic and healthy food, and beverage products. It develops custom menus for each franchisee specific to each location type based on their guidelines, requests and demographics. The micro market also provides fresh full meal options, such as salads, sandwiches and wraps. The micro market is designed for implementation in corporate environments, hotel lobbies, auto dealerships and other retail environments.
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Currently trading at a $10.92 million market valuation VEND has minimal assets and close to $10 million in payables. But this is an exciting story developing in small cap; the Company is tapping into an industry that is growing and diversifying into a new market with a robot kiosk. It will likely need to raise cash through equity or debt financing (maybe both) in order to meet its obligation and fund growth.
We will be updating on VEND when more details emerge so make sure you are subscribed to Microcapspot so you know what’s going on with VEND.
Disclosure: we hold no position in VEND either long or short and we have not been compensated for this article.