Aethlon Medical, Inc. (OTCMKTS:AEMD) Shoots Up on New PR
The spreading of the deadly virus Ebola may be terrifying but in the world of pennystocks it has had a rather positive effect. Many of the medical pennystocks announced that they were developing new devices, treatments and therapies that could potentially help in the fight against the disease. Lured by the PRs investors quickly rushed to these stock pushing them up the chart to new heights on massive traded volumes.
The problem is that despite the optimistic press releases the majority of these companies still need years before they can have a completed product. Aethlon Medical, Inc. (OTCMKTS:AEMD) on the other hand seem to be quite different.
On October 14 they announced that their Hemopurifier therapy is being used in the treatment of an Ebola patient at the Frankfurt University Hospital in Germany. The news was huge and it caused the company to jump from less than 20 cents to a new 52-week high of $0.307 in just two sessions. What was left was for AEMD to release information about the positive effects of the device. So far that hasn’t happened and although the lack of news caused the stock to drop back down investors were still keeping a close eye on the company.
That is why when yesterday a new PR was published it immediately attracted the attention of the market. AEMD shifted over 4 million of its shares, amount that is more than twice the average volume for the company and closed the session almost 20% higher at $0.245. Despite the overwhelmingly positive session the press release didn’t contain any new information about the patient in Germany. Instead it informed the public that the Hemopurifier therapy can now be accessed by American Ebola patients under the FDA compassionate use provisions.
Even the most firm believers that positive results will be eventually announced should not forget that AEMD is still a pennystock and that there are a couple of factors that could bring the stock down. Let’s start with the financials of the company. Looking through the latest quarterly report reveals that at the end of June they had:
• $807 thousand cash
• $938 thousand total current assets
• $3.6 million total current liabilities
• $51 thousand revenues
• $3.7 million net loss
In our previous articles we also warned you about the millions of extremely cheap shares that have been issued. Just for the three months covered by the report AEMD printed 26 million shares at prices around $0.04. In addition there are millions of warrants that could be exercised at the same price. On October 24 an 8-K form was filed and it shed some light on the recent issuance of shares.
Apparently 3.5 million shares were issued at only $0.042. Another 16 million shares were issued through the exercise of some of the aforementioned warrants at $0.042. Furthermore around 13 million shares were sold at prices ranging between $0.091 and $0.15. At the current market price the owners of these shares stand to reap significant profits. At least AEMD was able to strengthen its balance sheet by nearly $1.2 million in proceeds.
It is more than likely that for now the ticker is going to remain extremely volatile. If the Hemopurifier therapy proves to have a beneficial effect it could launch AEMD to higher price ranges but there is absolutely no guarantee that this is going to be the case. In the meantime the sizable amounts of cheap shares shouldn’t be underestimated. Do your own due diligence and decide on appropriate time horizons for your investment.
