Making waves thanks to its recent financial success, Torque Lifestyle Brands Inc. (OTC: TQLB) has been moving to the top of investors’ watchlists after announcing a $4 million order from a rising star in the health supplements market. The company also has several catalysts ahead of it with plans to uplist to the OTCQB and a revenue stream that could continue to grow with expansion and increasing orders. Despite forming its Joint Venture partnership – Zero Torque Manufacturing – only three months ago, the entity has received over $5 million in orders and is on track to record well over $1 million in revenues. As TQLB positions itself to start 2022 in a strong financial position, investors are taking note of the stock’s 33% increase following this news. In light of this, TQLB could become one of the most active penny stocks in the new year.
TQLB Stock News
As a manufacturer and developer of nutritional supplements for the sports industry, TQLB owns numerous brands but also manufactures products for other health and wellness companies. TQLB targets athletes and health-minded audiences by offering a variety of products such as: the Torque Metabolic Enhancer, Fat Burn Tablets, and Torque Pre-workout & Recovery supplements. Currently the company is a manufacturer of nutraceutical products marketed in the US and supplies these products to the consumer goods industry such as retailers and fitness clubs.
In this way, TQLB has been building valuable partnerships which could pave the way for further revenue growth in 2022. Currently projections for the sports supplements and wellness industry are very positive, expecting a 12.22% CAGR growth rate over the next five years. By 2024 the US dietary supplements industry is projected to reach $56.7 billion while the global sports nutrition industry is expected to reach $33 billion by 2028.
To capture a larger share of this growing market, TQLB has been pursuing a new strategy. In September TQLB sold its subsidiary American Metabolix for $1.3 million which left the company with $500,000 of non-dilutive cash upon closing. Since then, the company has entered into a 51% owned manufacturing joint venture partnership which has made TQLB the exclusive manufacturer for GLAXON – an award-winning sports nutrition brand – through its JV partnership Zero Torque Manufacturing.
Earlier this month, the company was proud to announce an initial $4 million order from GLAXON. Considered one of the fastest growing brands in the industry, Glaxon recently entered into a partnership with the global health and wellness brand GNC Holdings, Inc. This has brought a lot of attention to the brand, which could translate into more orders for TQLB. According to TQLB, this JV agreement has the potential for multi-million-dollar sales because Glaxon’s products are currently sold in roughly 1,000 stores and is on track for expansion.
As is, this massive order of GLAXON branded products is scheduled to be delivered over the next 6 months, almost guaranteeing that TQLB will be well-positioned for growth financially. Already, financially solid, TQLB boasts $2,437,462 in assets and $141,002 in cash on hand. The company has made major progress as well, bringing in a gross profit of $45,441 in Q3. With this $4 million sale TQLB is expected to grow even more over the next two quarters.
With this in mind, Leonard K. Armenta Jr – the President of Torque Lifestyle Brands – said, “This order gets the ball rolling on what we believe will be an enormously lucrative relationship, driving a series of major orders as GLAXON products take the world by storm”. He optimistically added that since “GNC is an industry powerhouse with the ability to drive mass distribution of GLAXON products at scale, and this puts Zero Torque in place as the exclusive manufacturer tied to that equation.”
Meanwhile, Torque’s CEO – David Lovatt – echoes this bullish sentiment sharing that in the “first two months of operations since completing this deal, we have seen not only significant purchase orders, but also impressive revenue being generated from operations throughout 2021.”
At this rate, TQLB could be in a good position to pursue some of its long-term goals. According to its financial documents, the company is working on expansion to international markets outside of the US. With this in mind, TQLB is considering markets in the UAE, Singapore, and South America, which have rapidly growing health and wellness markets. For example, the market for dietary supplements in the UAE is expected to reach $155.85 million by 2026. South America and Singapore share similar growth expectations for the next few years.
Based on the $4 million order alone, this increase in revenue will likely have a positive effect on TQLB’s price per share. The stock is currently trading at $.041 despite the company’s strong financial outlook and low float of roughly 4.6 million shares. Although the company appears undervalued given its revenue production and assets – factoring in this $4 million order while considering its third quarter revenue of $129 thousand means the stock is actually extremely undervalued. In light of its expected revenue growth over the next 2 quarters, TQLB’s shares should be valued closer to $.46 – a 1,021% increase. While this is unlikely, it seems very probable that the stock should see an increase to February’s high of $.19 before the end of 2022 which could make it one of the most active penny stocks of 2022.
However, at the moment inflation in the US has reached 6.2% – the highest rate since 1990 – and is expected to continue increasing over the next few months. Considering the financial hardship this may put on consumers, demand is not expected to increase for non-essential products like nutritional supplements.
Nonetheless, TQLB’s products are manufactured for the US market and sold to distribution partners in the nutritional supplements market. North America currently accounts for over 40% of the global sports nutrition industry and although inflation may cause a dip in demand, by the third quarter of 2022 inflation is expected to rebalance. With this in mind, investors might see an increase in overall sales for this industry.
Traders like @magicmiketrader are bullish on TQLB’s chances of returning to March’s PPS range based on these catalysts which could make it one of the most active penny stocks.
Currently trading at $.041, TQLB is showing a support at .034 with a resistance at .044 and a secondary resistance at .049. The RSI has evened out at 48 while the bearish MACD moves towards a crossover. Accumulation has seen an uptick but remains low.
As TQLB moves closer to its resistance, bullish investors may find an entry point now or wait to see if it approaches its support at .034. However, TQLB appears to move on news considering its initial 33% increase following it’s announcement that its on track to reach $5.5 million in sales before EOY.
TQLB Stock Forecast
Hinting at a major announcement before the end of the year, TQLB may be pursuing new growth strategies such as a new product line or increasing the availability of its products across retail establishments. Based on its diverse brand portfolio and strong financial position, this news could also be about a new acquisition or addition to its in-house brands. The company has also had plans to uplist to the OTCQB market and considering its strong financial position, now could be the time.
Regardless, investors feel bullish since the company’s quarterly report shows that GPL Holdings, Inc. gave TQLB a loan in exchange for notes with a conversion price equal to $0.25. This could indicate that TQLB may have some major catalysts coming in the upcoming months.
Considering the company’s solid growth this past year, investors may find an entry point into the branded health supplements market before this year’s end. TQLB has achieved notable growth through its JV partnership company and it seems set to continue that growth well into the new year – possibly making it one of the most active penny stocks of 2022.
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