Vystar Corp (OTCMKTS: VYST) has bounced off a key support level after a minor correction. After an excellent start to the year, depicted by a 1000% surge, the stock pulled lower, a development attributed to investors taking profits.
Vystar Corp Price Analysis
The $0.04 mark has since emerged as a crucial support level supporting further upside action. Above the critical technical level, the stock remains bullish and likely to continue powering high as a bounce-back play.
The $0.08 mark, on the other hand, is a crucial resistance level, standing in the way of further upside action following the minor correction. A rally-followed by a close above the critical resistance level should affirm Vystar Corporation breakout credentials after a correction lower.
Given that the stock is still up by more than 400% for the year, despite the steep pullback, it remains bullish and likely to continue climbing the ladder. The pullback, in our view, has presented an exciting entry position given the Company’s long-term prospects.
What Does Vystar Corp Do?
Vystar Corp is an exclusive creator of Vytex Natural Rubber Latex. The multi-patented all-natural raw material contains reduced levels of proteins found in most natural rubber latex, an edge that makes it ideal for use in over 40,000 products.
Vystar Corp poor run in the market can be attributed to many things, key among them being a lack of news flow needed to validate the Company’s long-term prospects. After skyrocketing to all-time highs, the stock came down tumbling on the lack of updates to support the upward momentum.
The stock’s market sentiments received a boost in March on institutional investor FirstFire Global Opportunities Fund investing $200,000 into the Company. With the investment, the investor bought the Company’s restricted common share at $0.15 a share, representing a 250% premium.
“We welcome FirstFire as our first institutional investor and look forward to a long and mutually beneficial relationship. Cleaning up our balance sheet by retiring all toxic convertible debt is a necessary step in the process of executing our strategic business plan to expand the Company organically and through accretive acquisitions designed to improve our earnings per share,” stated CEO Steve Rotman at the time.
Balance sheet Cleansing
Vystar Corp trading higher also comes on investors reacting to efforts put in place to strengthen the Company’s financial position. Reduction of toxic debt has come into play a development that has continued to prop the stock’s market sentiments.
For instance, the Company made a payment of $142,000 to retire a convertible promissory note. The board authorized the payment as a way of preventing conversion, thus retaining shares in the Company as a way of helping propping shareholder value.
The payment was made possible by the fact that the Company’s cash position has improved considerably. Since the end of last year, Vystar Corporation has paid off approximately $380,000, considerably reducing its debt levels. As of March, Vystar Corporation had approximately $50,000 in institutional convertible debt.
In addition to cleaning the balance sheet as part of the next phase of growth, Vystar Corporation has also continued to strengthen its Intellectual patent portfolio. In the recent past, the Company has secured European Patent for its Natural Rubber Latex. As it stands the Company, h holds 13 foreign and four u’s pants related to its proprietary latex deproteinization process.
“This new patent extends our coverage for a decade, and we have now broadened our protected areas in Europe to include additional manufacturing areas. While we have had broad protection for methods of deproteinization to reduce allergen city, we now have further coverage for end products as well,” explained Mr. Rotman.
Vystar Corp fundamentals are still strong amidst the steep price slump in recent months. The Company has made significant progress on the development of its Natural Rubber Latex all but strengthening its long-term prospects.
In addition, the Company has also cleansed its balance sheet with the elimination of toxic debt as part of its growth strategy. Strengthening of the IP portfolio also leaves the Company in an excellent position to make good use of its licensing deals.
That said Vystar Corp is a fundamentally attractive investment after a recent correction from all-time highs.
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Disclosure: We have no position in VYST and have not been compensated for this article.