stevia first corporation (stvf) rating: stevia first...

Caprock Research – Independent Investment Research

1

Stevia First Corporation (STVF) Agricultural Biotechnology

Rating:

BUY

Stevia First Corporation 5225 Carson Street Yuba City, CA 95993 Phone: (530) 231-7800 http://www.steviafirst.com

STVF RESEARCH REPORT:

Published January 26, 2015

Company reports revenues of $87,000 for the quarter ended September 30, 2014.

Company achieves Gross Margins of 77% for the quarter ended September 30, 2014.

Company reports agreement with Qualipride International Ltd., gaining access to significant

raw material, and extraction and purification facilities.

The company announces potential to reach cash flow breakeven in calendar 2015.

COMPANY OVERVIEW AND PRODUCTS:

Stevia First Corp. (OTCQB: STVF), (“the company”) is a development stage agricultural biotechnology

company, headquartered in California’s Central Valley, that is primarily engaged in developing novel,

proprietary methods and fermentation technologies for the industrial production of stevia, an alternative

sweetener. The company is intent on further developing these production methods in order to

commercialize them at an industrial scale in order to sell stevia extract directly to multinational food,

beverage, and ingredient companies. The company is also performing research and development on an

array of topics, including artificial intelligence, aimed at enhancing its fermentation techniques and

production methods. The company’s goal is to develop related product applications and technologies

that could provide additional commercial opportunities related to stevia production and opportunities in

the broader health and sustainability industries.

Stevia is a natural sweetener, with several beneficial properties, that is gaining traction with multi-national

food and beverage producers in efforts to reduce sugar consumption. Stevia is derived from a plant found

in Central and South America, where it has been used for over 1,500 years by the native peoples of Brazil

and Paraguay.

The company was incorporated in Nevada on June 29, 2007 and commenced operations as a mineral

exploration company. On October 10, 2011, the company completed a merger with its wholly-owned

subsidiary, Stevia First Corporation, and changed its name from “Legend Mining Inc.”. In February 2012,

the company substantially changed its management team, adding key personnel, leasing laboratory, office

space and agricultural land in California; and began pursuing business as an agricultural biotechnology

company.

Long-Term Target Price: $1.00 Near-Term Target Price: $0.50 Recent Price: $0.41


2


Rating:

BUY


The company currently employs four full-time time “Ph.D.-level” scientists who conduct and manage

internal research and development activities and staff. The company has retained additional scientists

and engineers who act as consultants and technical advisors, and perform research and development

work independently through their own laboratory facilities. In total, the company has over 20 researchers

conducting research and development.1 Internal research and development work for the company is

primarily conducted at its headquarters in Yuba City, California, which contains more than 3,000 square

feet of research and development space. These facilities include a laboratory, greenhouse, and workshop,

and a diverse array of equipment, including bioreactors, laboratory automation setups, pilot processing

units, and other equipment related to agriculture, molecular biology, bioinformatics, analytical chemistry,

process engineering, and food science.

The company’s research and development activities are intended to harness “breakthrough

technologies”, defined as technologies that often did not exist as recently as a decade ago but have now

become available and widely accessible and have the potential to provide solutions and commercial

opportunity across diverse end markets and industries. The company is focusing on such breakthrough

technologies that lie at the intersection of software and the life sciences within the biotechnology field.

The Company focuses on the process of stevia production from plant breeding through propagation,

planting, cultivation, and harvesting; and developing, marketing, and selling stevia products. It also

focuses on developing operations that will include stevia tissue culture, laboratory propagation, farming,

and cultivation of stevia leaf.

MARKET AND COMPETITION:

There are two main segments of the global market for sweeteners: “nutritive” sweeteners, including

sugar and high fructose corn syrup (“HCFS”), which contain calories; and “non-nutritive” sweeteners,

which are low- or zero-calorie sweeteners, and include zero-calorie high intensity artificial sweeteners

such as aspartame and sucralose, as well as naturally derived sweeteners such as stevia. According to the

market research group Mintel, artificial non-nutritive sweeteners have dominated the non-nutritive

sweetener market in the past, but the use of natural sugar substitutes is becoming more popular.

The company faces a significant market opportunity, as public awareness increases about the risks of

sugar consumption in beverages and food. A September 2013 Credit Suisse report, “Sugar: Consumption

at a Crossroads” indicated that, while medical research has not proven conclusively that sugar is the

leading cause of obesity, diabetes type II or metabolic syndrome, the balance of medical research studies

are coalescing around this conclusion. According to the report, in the United States healthcare costs tied

to diabetes type II are estimated at $140 billion, compared to $90 billion for tobacco-related healthcare

costs. The report also concluded that the most likely outcome over the next 5-10 years will be a significant

reduction in sugar consumption and a marked increase in the role of high-intensity natural sweeteners,

such as stevia. Draft guidelines proposed by the World Health Organization in March 2014 encourage the

consumption of less than 5% of total daily caloric intake from sugars, an amount less than that found in a

single can of regular soda. Due to these and other factors,


3


Rating:

BUY


growth in traditional carbonated soft drink sales are expected to remain flat (or decline slightly), while

demand for non-sugar enhanced beverages is expected to rise. The negative impacts of diabetes and

obesity can be seen in the charts below:2


4


Rating:

BUY


Stevia rebaudiana is a plant from the chrysanthemum family and is native to Central and South America.

This small green plant's leaves have a taste that can be 30 times sweeter than sugar. Stevia has been

cultivated and used widely in Japan and China since the 1970s, and began to gain popularity in the United

States in the mid 1980’s. Stevia’s usage in the United States increased following the issuance of the FDA’s

first no objection letter in December 2008, granting GRAS (“Generally Recognized as Safe”) status to

various stevia extracts. This action permitted the use of stevia as a sweetener in food and beverages. The

European Union adopted regulations approving stevia extract usage in November 2011.

Stevia leaves contain more than 30 steviol glycosides (molecules), which taste sweet but have no calories.

These steviol glycosides can be 30 times sweeter than sugar when in raw form and 200 to 300 times

sweeter than sugar in refined form. They are both heat- and pH-stable, permitting them to be used in

baked, cooked, and processed foods, as well as in applications where artificial sweeteners cannot be used.

Stevia extracts do not induce a glycemic response (change in blood sugar) when ingested. These

characteristics make stevia attractive as a natural sweetener for diabetics and others on a carbohydrate-

controlled diet. The steviol gylocoside compound “Reb A”, is the most commonly used as a commercial

product due to its taste, which is closer to sugar than other sweeteners that are currently available, and

its abundance within the stevia leaf. In most stevia extract commercial products, Reb A is extracted from

the stevia leaves and then purified to 95%, 97% or greater purity for use in food and beverages.

The market for stevia could also benefit from a consumer belief that all-natural products are healthier

than artificial products. In June 2008, a Harris Poll found that three out of five Americans believe artificial

sweeteners are only somewhat safe or not safe at all. While still widely used, over-consumption of the

traditional nutritive sweeteners sugar and HCFS carries risks. It is believed that the increased consumption

of sugar and HCFS, which have similar caloric content, has contributed to increased rates of obesity,

diabetes and other health-related issues. In particular, HCFS has been cited as a contributor to increasing

rates of obesity due to its high percentage of fructose, which, unlike glucose, does not trigger the release

of appetite suppressing endorphins when metabolized in the human body.

The value of the global sweetener market in 2009 was estimated at $58.3 billion, as reported by Reuters,

and a 2011 report from the USDA found that sweetener deliveries for 2010 were 131.9 pounds per capita.

According to Mintel’s 2011 “Stevia and other Natural Sweeteners” report, stevia is one of the fastest-

growing newcomers in the estimated $6 billion sugar substitute market, which includes artificial chemical

sweeteners as well as naturally derived non-caloric sweeteners. According to Mintel, there was a 400%

increase globally in new stevia-based products between 2008 and 2012. According to the August 2009

edition of the Mintel report, more than 115 new food and beverage products containing stevia were

launched in the United States in the first seven months of 2009. These products were from such leading

global food and beverage companies as The Coca Cola Company, Cargill, PepsiCo and Merisant Company.

In early May 2011, AC Nielsen reported that Truvia® had surpassed Sweet N Low® to become the number

two sugar substitute in the U.S. and was then in more than five million U.S.


5


Rating:

BUY

Stevia First Corporation 5225 Carson Street Yuba City, CA 95993 Phone: (530) 231-7800 http://www.steviafirst.com households, accounting for 14% of the U.S. tabletop sugar substitute market. The current estimated

market for stevia, and its rate of growth, is illustrated in the chart on the following page:3

The company faces competition from producers and distributors of sugar, high fructose corn syrup,

artificial sweeteners and other natural sweeteners, in addition to national and international producers

and distributors of stevia products. The stevia sweetener industry is fragmented; according to CCM

Information Science & Technology’s 2013 market research report on the stevia industry, the leading

three global companies by output account for less than half of the production capacity for stevia. As a

result, the company competes in the stevia production market against small, midsize, and large

companies that have customer bases which range from local to global. Many of the company’s

competitors are well-established corporations that have substantially greater financial,

managerial, technical, marketing, personnel and other resources than the company.

Competition is expected to increase as other companies introduce competitively priced products, and

the demand for stevia increases.

Major stevia producers include Blue California, which produces the Good & Sweet™ brand; Cargill which

produces Truvia®, the leading stevia tabletop sweetener in the U.S.; Cumberland Packing Corporation,

which produces the Stevia In The Raw® brand; GLG Life Tech Corporation (Other OTC: GLGLF), which

offers the Rebpure™ brand and supplies Cargill with stevia extract for Truvia®; PureCircle (OtherOTC:

PCRTF), a Malaysian based supplier of stevia for the PureVia™ tabletop stevia brand; S&W Seed

Company (NasdaqCM: SANW), a seed supplier which produces stevia leaf; and Sweet Green Fields, an

agricultural research and development company focused on stevia.


6


Rating:

BUY

Stevia First Corporation 5225 Carson Street Yuba City, CA 95993 Phone: (530) 231-7800 http://www.steviafirst.com MANAGEMENT TEAM:

Robert Brooke, Chief Executive Officer and Director – Mr. Brooke has served as a director and the

company’s Chief Executive Officer since January 31, 2012, and previously served as its Vice President of

Business Development beginning in October 2011. Mr. Brooke was a founder of Lion Biotechnologies,

Inc., formerly Genesis Biopharma, Inc. (OTCBB: LBIO.OB), a cancer drug development company, where he

served as Director, President and Chief Executive Officer from March 2010 until February 2011. Mr.

Brooke is a co-founder of Intervene Immune, Inc., a privately held biotechnology company focused on

immune regeneration, and since March 2014 has served on a limited part-time basis as CEO. Mr. Brooke

was the founder of Percipio Biosciences, Inc., a privately held research diagnostics company that

manufactures and distributes products related to oxidative stress research, and served as its President,

on a limited part-time basis, from 2008 until June 2013. From 2004 to 2008, he was an analyst with Bristol

Capital Advisors, LLC, the investment manager to Bristol Investment Fund, Ltd. During this period, Bristol

financed over 60 public healthcare and life science companies and was listed by The PIPEs Report in 2005

as being the most active investor in private placements by public biotechnology companies. Mr. Brooke

earned a B.S. in Electrical Engineering from Georgia Tech in 2003 and a M.S. in Biomedical Engineering

from UCLA in 2005.

Dr. J. Jeremiah Mann Ph.D., VP of Operations, Senior Agronomist – Since 2011, Dr. Mann has held the

position of Agronomist with the U.S.D.A., Natural Resource Conservation Service, at the California Plant

Material Center in Lockeford, CA. In this role he managed all farm operations at the center while providing

state wide consulting services to NRCS field offices on agronomic, re-vegetation/restoration, and

vegetation management topics. Previously, he conducted graduate research at UC Davis and was a

consulting scientist at the Solano Resource Conservation District, Dixon, CA, specializing in restoration

management techniques. Over the course of his career he has held a variety of positions including: as an

Instructor and Staff Engineer at Humboldt State University; as a Botanical Technician with McBain and

Trush Engineering; and as a Research Assistant at the National Renewable Energy Laboratory (NREL) in

Golden, CO. He has also enjoyed serving as an Arborist, Firefighter, and Teaching Assistant. He began his

affinity for agronomy in the late 1980s while working on a walnut farm in Gustine, CA and on several

tobacco farms in Tennessee. Dr. Mann holds a number of relevant professional certifications, is an

accomplished lecturer, author and a member of several industry associations as well as the recipient of a

number of scholarships and awards in his field. He earned his Ph.D. Horticulture and Agronomy, at the

College of Agricultural and Environmental Sciences, University of California, Davis, CA (2011), M.S.

Horticulture and Agronomy, College of Agricultural and Environmental Sciences, University of California,

Davis, CA (2009), and a B.S. Physical Science, College of Natural Resources & Sciences, Humboldt State

University, Arcata, CA, (2005).

Mr. Richard McKilligan, Controller – Mr. McKilligan has a background in the legal profession, experience

in finance, and family roots in agriculture. He is a member of the State Bar of California, the New York

State Bar Association and the Florida Bar. Mr. McKilligan earned his law degree from Cornell Law


7


Rating:

BUY


School, an MBA from the University of Chicago’s Booth School of Business and his undergraduate degree

in Accountancy from the University of Illinois at Urbana-Champaign. From 2000 to 2006, he was an

associate with Morgan, Lewis & Bockius, LLP in their New York and London offices. He subsequently

served until 2011 as Chief Financial Officer and general counsel with Derycz Scientific, Inc., an information

services & software company, and previously as Chief Financial Officer of Genesis.

Biopharma, Inc, a cancer drug development company. Mr. McKilligan also has significant practical

agriculture experience through an upbringing on a large soybean and corn producing family farm.

RECENT DEVELOPMENTS:

On Tuesday, January 20, 2015, the company provided a Letter to Shareholders from its CEO, announcing

that the company’s proprietary bioprocessing methods for Reb A have the potential to achieve significant

cost savings over competing solutions, as the company can obtain 2 to 3 times more stevia from the same

amount of stevia leaf. The letter also announced the company’s expansion into “geroprotectors”, food

and nutritional products designed to have functional effects that mimic the health benefits of proper diet

and exercise.

On Friday, November 14, 2014, the company filed its Form 10-Q with the SEC for the period ended

September 30, 2014. For the period the company reported revenues of $87,000 versus no revenues for

the period ended September 30, 2013, and up $46,000 sequentially from the quarter ended June 30, 2014.

Gross margins for the quarter ended September 30, 2014 were 77.4% versus 73.2% for the quarter ended

June 30, 2014. Research and development costs for the September 2014 quarter were $208,000 versus

$100,000 for the quarter ended September 30, 2013, and $246,000 for the June 2014 quarter. Selling,

general and administrative costs for the period ended September 30, 2014 were $943,000 versus

approximately $701,000 for the period ended September 30, 2013, and $587,000 for the period ended

June 30, 2014. The company’s net loss for the three months ended September 30, 2014 was -$1.4 million

versus a net loss of approximately $782,000 for the three months ended September 30, 2013, and a net

loss of approximately $656,000 for the three months ended June 30, 2014.

On Wednesday, November 12, 2014, the company announced its development of a stevia formulations

platform using its “AI Scientist” program, a generalized artificial intelligence platform that the company

hopes to use to solve diverse challenges across multiple industries, with an emphasis on life sciences

research. The company will attempt to lever this platform in its efforts in the stevia sector to target a

variety of product applications that it believes have the potential for high value. The company will provide

customers access to this proprietary solutions platform and allow them to leverage the company’s

research into “novel and winning product formulations” of stevia.


8


Rating:

BUY


On Wednesday, November 5, 2014, the company announced that results for the 2014 growing season for

stevia throughout California would result in dry leaf yields that met, and likely exceeded, average

globally reported dry leaf yields. The company also announced that commonly available agricultural

equipment was able to address critical components of stevia production including: planting; weed

control; harvest; transport; and storage.

On Wednesday, October 14, 2014, the company announced that it had obtained $1.47 million in proceeds

from an early exercise offer made on September 9, 2014 to holders of the company’s Series C Warrants.

These warrants were originally issued on June 28, 2013. The company stated that it would use the

proceeds of the offer for research and development related to stevia production and for general corporate

purposes, which included general development efforts.

On Tuesday, August 26, 2014, the company made two announcements surrounding an agreement it had

reached with Qualipride International Ltd. First, the company announced an Exclusive Distribution

Agreement with Qualipride, a stevia supplier in the People’s Republic of China, where the company

obtained worldwide rights to distribute stevia seed, leaf, and extract; as well as obtaining exclusive rights,

outside of China, to utilize Qualipride’s proprietary methods of stevia extraction and refining. This

agreement gave the company overseas production capacity and methods of enzyme enhancement that

the company believes could enable 2-3 times greater stevia extract from the same amount of leaf. As part

of the agreement, Qualipride’s president will join the company in a managerial position. Second, the

company announced that it had filed a Form 8-K with the SEC for the Material Definitive Agreement

reached between the company and Qualipride. Under this agreement, the company is required to obtain

financing of at least $2.55 million prior to August 18, 2015, or the license will revert to Qualipride.

Additionally, the license requires the company to make payments to Qualipride of up to $700,000 upon

securing the required financing and meeting certain other milestones, in addition to royalty payments.

OUTLOOK:

The company is focused on the large and quickly growing market for natural, low calorie sweeteners, and

has taken recent steps to expand its capacity and product offerings. The company’s August 2014

agreements with Qualipride International, Ltd. allow the company to take over a stevia distribution

business that exported over 350 tons of stevia in 2014. These agreements give the company access,

through partners, to over 1,000 metric tons of annual high-purity stevia production capacity, and over 100

tons of stevia extract that is currently in stock and available, as shown on the following page:4


9


Rating:

BUY


The company has stated that it has the potential to become cash flow breakeven in 2015, while continuing

to invest in its research and development efforts. In a recent presentation, available on the company’s

website, potential financial metrics necessary to reaching breakeven cash flow were given, as shown

below:5


10


Rating:

BUY


In order to achieve these metrics, the company must continue to execute, and will require additional

financing in order to complete the agreements with Qualipride International, Ltd.

RECENT PRICE ACTION:

During September 2014, the company’s stock sold off, falling from approximately $0.45 per share at the

beginning of September to early October, where it bottomed at approximately $0.32 per share. This

selloff followed a sharp spike in the company’s shares that started in late August, after the company

announced its distribution and licensing agreements with Qualipride International Ltd.

After bottoming in early October 2014, the company’s shares remained “range bound” through the end

of calendar 2014, trading between approximately $0.33 per share, and $0.40 per share. The company’s

shares traded in an even narrower range, between approximately $0.34 and $0.36 per share through mid-

January, before rising sharply beginning on January 20, 2015, and breaking through prior resistance

around the $0.40 level. On Friday, January 23, 2015, the company’s stock closed at $0.41, on volume of

378,298 shares, as compared to the stock’s three-month average of 106,174 shares. A chart illustrating

price action in the company’s stock can be seen below.6


11


Rating:

BUY


VALUATION:

To arrive at a valuation for the company, I used what limited information is available on publicly-traded

companies with a focus on stevia. Potential investors should be aware that are a very small number of

companies with this focus, and that current and project financial information on these companies is

difficult to obtain. Potential investors should be aware that as a result of these limitations I was not able

to obtain revenue projections for the comparable companies and that these companies have different

fiscal year-ends. As a result, the following valuation is useful for directional purposes only. I calculated a

projected Price-To-Sales Ratio (Share Price/Revenues per Share) for fiscal 2016 for the company of 11.78x,

the average Price-To-Sales ratio for the comparison group. This resulted in a near-term price target of

$0.50 per share for the company over the next six months. The comparison group and results of my

valuation comparison can be seen on page 15 of this report.

On a longer-term basis, if the company is successful in executing its business plan, and reaching cash flow

breakeven, the company has the potential to trade at significantly higher prices. As the chart shown on

the next page illustrates, on a technical basis, if the company’s stock price is able to break through

resistance above my near-term price target of $0.50, a longer-term price target of $1.00 per share is

achievable.7


12


Rating:

BUY



13


Rating:

BUY



14


Rating:

BUY


BOTTOM LINE:

As with an investment in many smaller companies that are relatively thinly traded, an investment in the

shares of Stevia First Corporation is potentially a “high risk, high reward” situation. The company has

reported limited revenues to date, and continues to require equity offerings to generate capital to

continue operations, as well as solidify the agreement with Qualipride International Ltd. The company’s

stock has broken out of its late 2014 trading range, and the stock has recently seen some lessening in

selling pressure.

The company’s share price is likely to remain highly volatile and will react to news releases, such as

additional product announcements, and earnings for the remainder of the fiscal year. With the company’s

achievement of revenues, potential additional product offerings, and the potential to reach cash flow

breakeven in calendar 2015, I believe that the potential rewards outweigh the foreseeable risks, and

initiate coverage with a Buy recommendation.

RISK FACTORS:

An investment in the common stock of the company is subject to a number of risks. The information

below contains excerpts of some of the risk factors included in the company’s Form 10-K for the fiscal year

ended March 31, 2014, and should be considered by all investors.8 Investors should carefully consider the

risk factors set out below and consider all other information contained herein, and in the company’s SEC

filings, before making an investment decision. We assume no obligation to update or revise any such

forward-looking statements to reflect events or circumstances that occur after such statements are made.

A more complete list of risk factors for the company can be found beginning on page 9 of its Form 10-K

filing, dated March 31, 2014, which is available on the SEC’s Edgar website:

http://www.sec.gov/Archives/edgar/data/1438943/000114420414040441/v381507_10k.htm.

The company does not generate any material revenue from operations, and it will need to raise

substantial additional capital to operate its business. If it cannot raise the funds it needs to

continue its operations, its business could fail.

The company uses breakthrough technologies, tools and products that are subject to risks

associated with new and rapidly evolving technologies and industries.

The company devotes most of its resources to research and development of proposed future

products and if its development efforts fail you could lose some or all of your investment.

The company is not profitable and may never become profitable.

Certain of the company’s operational plans and programs are dependent on arrangements with

Qualipride that are currently non-binding, and are therefore speculative and subject to change.

http://www.sec.gov/Archives/edgar/data/1438943/000114420414040441/v381507_10k.htm


15


Rating:

BUY

Stevia First Corporation 5225 Carson Street Yuba City, CA 95993 Phone: (530) 231-7800 http://www.steviafirst.com Stevia competes with sugar and high intensity sweeteners in the global sweetener market and

the success of stevia will largely depend on consumer perception of the positive health

implications of stevia relative to other sweeteners.

The company currently faces, and will continue to face, significant competition.

The company’s limited operating experience could make its operations inefficient or ineffective.

If the company is unable to market and distribute its products effectively, it may be unable to

generate significant revenue.

The company uses hazardous materials in its business. Any claims relating to improper handling,

storage or disposal of these materials could be time consuming and costly.

If the company is able to finalize arrangements with Qualipride and pursue its plans to conduct

certain operations in China, uncertainties with respect to the PRC legal system could harm the

company.

The company has material weaknesses in its internal control over financial reporting. If it fails

to create effective controls and procedures and an effective system of internal control over

financial reporting, it may not be able to accurately report its financial results or prevent fraud.

If the company issues and sells additional shares of its common stock in the future, its existing

stockholders will be diluted and its stock price could fall.

APPENDIX:

The following unaudited Condensed Balance Sheets for the three months ended September 30, 2014;

unaudited Condensed Consolidated Statements of Operations for the nine months and three months

ended September 30, 2014; and unaudited Condensed Consolidated Statements of Cash Flows for the

three months ended September 30, 2014, should be read in conjunction with the company’s unaudited

financial statements and notes contained in the company’s Form 10Q for the period ended September

30, 2014.9


16


Rating:

BUY


STEVIA FIRST CORP

CONDENSED BALANCE SHEETS

September 30, March 31,

2014 2014

(unaudited)

Assets

Current Assets

Cash $ 1,782,177 $ 1,403,403

Accounts receivable, net 39,396 -

Inventory 19,417 -

Prepaid expenses 21,464 10,637

Advance payment on related party lease - 10,413

Total Assets $ 1,862,454 $ 1,424,453

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities

Accounts payable and accrued liabilities $ 203,458 $ 79,915

Accounts payable - Related Party 1,000 16,100

Derivative liability 1,338,849 1,438,814

Total liabilities 1,543,307 1,534,829

Stockholders' Equity (Deficit)

Common stock, par value $0.001 per share;

525,000,000 shares authorized; 72,430,100 and 66,832,523 shares issued and

outstanding 72,430 66,833

Unvested, issued common stock (404,034 ) (149,714 )

Additional paid-in-capital 11,041,158 8,299,366

Accumulated deficit (10,390,407 ) (8,326,861 )

Total stockholders’ equity (deficit) 319,147 (110,376 )

Total liabilities and stockholders’ equity (deficit) $ 1,862,454 $ 1,424,453


17


Rating:

BUY


STEVIA FIRST CORP

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended Six Months Ended

September 30, September 30,

2014 2013 2014 2013

Revenue $ 86,695 $ - $ 128,136 $ -

Cost of goods sold 22,106 - 33,981 -

Gross profit 64,589 - 94,155 -

Operating expenses:

General and administrative 933,060 701,318 1,499,726 1,427,514

Rent and other related party costs 9,900 31,950 30,217 73,100

Research and development 207,663 100,156 453,643 223,395

Total operating expenses 1,150,623 833,424 1,983,586 1,724,009

Loss from operations (1,086,034 ) (833,424 ) (1,889,431 ) (1,724,009 )

Other income (expenses)

Cost to induce exercise of warrants (961,767 ) - (961,767 ) -

Interest expense (4,055 ) (41,346 ) (4,712 ) (235,087 )

Change in fair value of derivative liability 644,107 93,090 792,364 278,111

Total other income (expense) (321,715 ) 51,744 (174,115 ) 43,024

Net loss $ (1,407,749 ) $ (781,680 ) $ (2,063,546 ) $ (1,680,985 )

Loss per share – basic and diluted $ (0.02 ) $ (0.01 ) $ (0.03 ) $ (0.03 )

Weighted average number of common shares

outstanding- basic and diluted 68,630,355 59,784,168 67,356,536 57,898,055


18


Rating:

BUY


STEVIA FIRST CORP

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Six Months Ended

September 30,

2014 2013

Operating activities

Net loss $ (2,063,546 ) $ (1,680,985 )

Adjustments to reconcile net loss to net cash used in operating activities

Fair value of vested stock options 121,721 665,873

Fair value of vested common stock 203,680 28,029

Change in fair value of derivative liability (792,364 ) (278,111 )

Fair value of common stock issued for services 144,100 -

Fair value of vested warrants granted to employees 278,711 -

Cost to induce exercise of warrants 961,767 -

Amortization of debt discount - 216,338

Changes in operating assets and liabilities:

Accounts receivable 99 -

Inventory (19,417 ) -

Prepaid expenses (10,827 ) (1,400 )

Advance payment on related party lease 10,413 62,500

Accounts payable and accrued liabilities 73,543 (1,090 )

Accounts payable - related party (15,100 ) (4,319 )

Accrued interest - 18,750

Net cash used in operating activities (1,107,220 ) (974,415 )

Investing activities

Acquisition of cash upon acquisition 10,505 -

Net cash provided by investing activities 10,505 -

Financing activities

Proceeds from exercise of warrants 1,470,489

Proceeds from exercise of options 5,000 -

Shares sold - 1,133,250

Net cash provided by financing activities 1,475,489 1,133,250

Net increase in cash 378,774 158,835

Cash and cash equivalent - beginning of period 1,403,403 392,483

Cash and cash equivalent - end of period $ 1,782,177 $ 551,318

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Interest $ 4,055 $ 12,075

Income taxes $ - $ -

Non-cash activities:

Issuance of common stock upon conversion of notes payable and accrued interest $ - $ 211,250

Fair value of warrants issued with common stock recorded as derivative liability $ - $ 1,249,025

Acquisition of accounts receivable upon acquisition $ 39,495 $ -

Issuance of unvested common stock to employees $ 458,000 $ -

Extinguishment of derivative liability $ 269,368 $ -


19


Rating:

BUY


SOURCES:

1 http://www.steviafirst.com/uploads/default/files/steviafirst-ppt.pdf. 2 http://www.steviafirst.com/geroprotectors/diabetes-obesity-epidemics. 3 http://www.ft.com/intl/cms/s/0/e84d16fc-6327-11e4-9a79-00144feabdc0.html?siteedition=intl#axzz3PruNbXgZ. 4 http://www.steviafirst.com/uploads/default/files/steviafirst-ppt.pdf. 5 Ibid. 6 http://stockcharts.com/h-sc/ui. 7 http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=STVF&insttype=Stock&time=10&freq=2. 8 http://www.sec.gov/Archives/edgar/data/1438943/000114420414040441/v381507_10k.htm. 9 http://www.sec.gov/Archives/edgar/data/1438943/000114420414068924/v392932_10q.htm. http://bigcharts.marketwatch.com/ http://finance.yahoo.com/q?s=stvf. https://doc.research-and-analytics.csfb.com/docView?language=ENG&source=ulg&format=PDF&document_id=1022457401&serialid=atRE31ByPkIjEXa%2Fp3AyptOvIGdxTK833tLZ1E7AwlQ%3D. http://www.harrisinteractive.com/vault/Harris-Interactive-Poll-Research-How-Sweet-It-Is-Or-Is-It-2008-06.pdf. http://www.marketresearch.com/CCM-International-Limited-v3539/. http://www.marketresearch.com/Mintel-International-Group-Ltd-v614/Stevia-Natural-Sweeteners-6501782/. http://www.mediapost.com/publications/article/149786/cargills-truvia-now-2-sugar-substitute.html. http://www.nytimes.com/2014/01/05/magazine/the-quest-for-a-natural-sugar-substitute.html?_r=0. http://www.nytimes.com/2014/09/29/business/media/ads-declare-that-sweeteners-like-apples-dont-fall-far-from-the-tree.html. http://www.steviafirst.com/. http://www.sec.gov/cgi-bin/browse-edgar?company=stevia+first&owner=exclude&action=getcompany. http://seekingalpha.com/symbol/STVF. http://who.int/mediacentre/news/notes/2014/consultation-sugar-guideline/en/.

Disclosure: I, Charles I. Reed, CFA have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.

The information contained herein is not intended to be investment advice and does not constitute any form of invitation or inducement by Charles I. Reed, CFA to engage in investment activity. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Securities, financial instruments, strategies, or commentary mentioned herein may not be suitable for all investors and this material is not intended for any specific investor and does not take into account an investor’s particular investment objectives, financial situations or needs. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only current as of the stated date of their issue. Prices, values, or income from any securities or investments mentioned in this report may fluctuate, and an investor may, upon selling an investment lose a portion of, or the entire principal amount invested. Past performance is no guarantee of future results. Before acting on any recommendation in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. FORWARD-LOOKING STATEMENT This report may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward- looking statements by

http://www.sec.gov/Archives/edgar/data/1438943/000114420414068924/v392932_10q.htm

http://bigcharts.marketwatch.com/

http://www.marketresearch.com/Mintel-International-Group-Ltd-v614/Stevia-Natural-Sweeteners-6501782/

http://www.nytimes.com/2014/09/29/business/media/ads-declare-that-sweeteners-like-apples-dont-fall-far-from-the-tree.html

http://www.nytimes.com/2014/09/29/business/media/ads-declare-that-sweeteners-like-apples-dont-fall-far-from-the-tree.html

http://www.sec.gov/cgi-bin/browse-edgar?company=stevia+first&owner=exclude&action=getcompany

http://seekingalpha.com/symbol/STVF


20


Rating:

BUY


definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of mentioned company to be materially different from the statements made. COMPLIANCE PROCEDURE Content is researched, written and reviewed on a best-effort basis. This document, article or report is written and authored by an outsourced research services provider, which provided Small Cap IR this article or report. However, we are only human and are prone to make mistakes. If you notice any errors or omissions, please notify us. Small Cap IR is not entitled to veto, interfere or alter the articles, documents or report once created and reviewed by the outsourced research provider. All parties responsible for the creation and dissemination of this report do not engage in high frequency trading. NO WARRANTY OR LIABILITY ASSUMED Small Cap IR is not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. Small Cap IR has been compensated up to two thousand and five hundred dollars for marketing efforts in relation to STVF by Full Service Media, LLC. Owners and operators of Small Cap IR do not have any positions in STVF, but may buy or sell stock in the open market of STVF at any time. No liability is accepted by Small Cap IR whatsoever for any direct, indirect or consequential loss arising from the use of this document. Small Cap IR expressly disclaims any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Small Cap IR does not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice. Small Cap IR is the party responsible for hosting the analyst report. Small Cap IR has compensated 3rd party research provider two hundred and fifty dollars for the right to disseminate this report. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

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