Earth Science Tech Inc (OTCMKTS:ETST) has turned into a microcap runner after announcing that it was getting into the sports supplement business. Shares exploded off the $.50 base and ran to $3 in the span of just a few days. After gains of 500%, investors are now asking how much run room is left?
First up, a little background on the company. ETST describes itself as focusing on cutting edge Nutraceuticals, Bioceuticals, and Phytoceuticals for the Health, Wellness and Alternative Medicine Markets to help improve the quality of life for Consumers Worldwide. ETST is also dedicated to providing Natural Alternatives to prescription medications through the use of its cutting edge Nutritional and Dietary Supplements.
Its wholly owned subsidiary, Earth Science Pharmaceutical Inc, is focused on becoming a world leader in the development of low cost, non-invasive diagnostic tools, medical devices, testing processes and vaccines for STIs (Sexually Transmitted Infections and/or Diseases), as well developing new advanced formulated cannabis CBD nutraceuticals and 2 Cannabis CBD-based pharmaceutical drugs under its cannabis CBD patent, IP and technology. Earth Science Pharmaceutical CEO, Dr. Michel Aubé, a renowned scientist, is committed to help grow ETST in the medical and pharmaceutical industry.
The ETST run started when the company announced a joint venture agreement with Nutrition Specialties and its division Forzagen to secure a foothold for the company in the multi-billion dollar sports supplement industry. Earth Science Tech will share research, development, and manufacturing spaces with Nutrition Specialties and Forzagen in order to explore various expertise synergies. The plan is to develop new, full-spectrum cannabis-based (Industrial Hemp) sports supplements. ETST will provide its formulation, marketing, branding, sales, and supply services to Nutrition Specialties and Forzagen in exchange for connections to international distributors in the supplement industry. The JV is already working on formulating three new CBD-based nutritional sports supplements, and they anticipate being able to update shareholders on these new developments by Q2, with a launch date mid 2017. President & COO Nickolas Tabraue said:
“This partnership is enormous for both of our companies. We can provide our cannabis industry expertise, cannabinoid research and development, supply, and formulation services to Nutrition Specialties and Forzagen, and they can provide us with access to cutting edge sports science knowledge, a leading lab team, and a much larger supply chain than we have ever been involved with. This could be a vast driving force for us that really springboards our company to the next level as a pioneer in the cannabis sports supplement industry.”
Early this week, ETST formed Cannabis Therapeutics, Inc. to release new Cannabinoid-based Drugs and Nutraceuticals. The company said that Cannabis Therapeutics, Inc. will begin by inventing & launching two new Cannabinoid-based Pharmaceutical drugs and three new Advanced Cannabinoid-based Nutraceutical products using Earth Science Tech’s existing Cannabis CBD Patent, IP, Invention, Technology and future Technology. ETST’s International Application (PCT) for its Provisional Patent named “Cannabidiol Compositions Including Mixtures and Uses Thereof” was filed on October 8th, 2015 in regards to its Cannabis Hemp CBD (Cannabidiol) Oil. This application claims the benefit of ETST U.S. Provisional Application N. 62/061,577, filed October 8, 2014 and ETST U.S. Provisional Application No. 62/102,538, filed January 12, 2015.
Currently trading with a market cap of $120 million, ETST is a low float play on the OTC Markets with just 4 million shares in the float out of 40 million shares outstanding. The positive news flow has squeezed the shorts, creating the enormous run we have seen. While we like the move into the sports supplement business, ETST still needs to boost its financials and that will lead to dilution. According to the latest financials, ETST posted $44k in cash, $332k in total assets, $461k in total liabilities, $469k in revenues, and a net loss of $1.2m.
For those that have not gotten in yet, we recommend looking for a pullback @ $2.50 Profit taking is bound to step in as some traders have scored big on this run.