NutraFuels Takes a Unique Approach to Unlocking Shareholder Value
February 28th, 2017
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NutraFuels Takes a Unique Approach to Unlocking Shareholder Value
NutraFuels Corp. (OTC: NTFU), a developer of innovative oral spray nutraceutical products that enhance bioavailability relative to traditional supplements, has seen its share price increase more than 1,800% over the past three months. This performance has been driven by a combination of near-term catalysts from product development and sales, as well as its efforts to become a fully-reporting and debt-free public company.
In this article, we will take a look at the company’s pharmaceutical-like approach to the nutraceutical market and its efforts to improve transparency for investors.
The global nutraceutical industry is expected to grow at a 7.3% CAGR to reach $279 billion by 2020, according to Transparency Market Research, driven by more health-conscious consumers. Over the past few years, cannabidiol (“CBD”) has become one of the fastest growing nutraceutical product categories. The Hemp Business Journal projects that hemp-based CBD sales could exceed $450 million by 2020.
Most nutraceutical companies simply package well-known compounds, such as vitamins or fish oils, into capsules or foods and rely on anecdotal data to support consumption. Unfortunately, many of these well-known compounds have little actual health value and others could actually prove dangerous when over-consumed. For example, many experts have argued that consumers shouldn’t waste their money on multivitamins.
NutraFuels has taken a pharmaceutical-like approach within the nutraceutical industry by conducting clinical trials to validate its products. For example, the company recently announced that it was preparing to conduct clinical efficacy trials on its line-up of CBD-containing oral sprays. The initial studies will look at the time-course of absorption, while the second phase will look at the efficacy in specific indications – such as sleep support.
“We are pleased to announce that we are taking the necessary steps to validate the efficacy and benefit of our products and look forward to producing conclusive data that will demonstrate the quality of the products we produce,” said Edgar Ward, NutraFuels President/CEO.
NutraFuels is also unique among publicly-traded micro-cap companies with its improving financial condition and increasing transparency.
In February, the company announced that it had converted all of its short- and long-term outstanding debt to become completely debt-free. The move helps free up cash flow that previously went towards debt service payments and improves its future ability to use debt financing rather than equity financing. Management also recently unveiled steps to become a fully-reporting company with the SEC in a bid to improve transparency.
“We are pleased to announce that we are taking the next steps to becoming a fully reporting company,” said Edgar Ward, Nutrafuels’ CEO in a press release at the time. “We believe this action is necessary in providing full disclosure and transparency to the investment community along with our commitment to the company and its shareholders.”
These move to become a fully-reporting company could also open the door to a wider investor base over time. Many institutional investors require this level of reporting as a prerequisite to investment, while a potential up-listing down the road could further expand investment opportunities. A greater number of investors could in turn lead to increased liquidity for investors and a more accurate representation of the company’s intrinsic value.
NutraFuels Corp. (OTC: NTFU) has made tremendous progress in bringing its innovative oral spray products to market, while moving closer to validating them with actual clinical trials. In addition to its operational improvements, the company has become completely debt-free and taken steps to become a fully-reporting company with the SEC. These moves could help unlock significant value for shareholders over the long-term.
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