Cocrystal Pharma Inc. (OTCBB:COCP) Makes For The Clouds

Cocrystal Pharma Inc. (OTCBB:COCP) jumped 16.13% yesterday, for no discernible reason whatsoever.

The chart pattern that COCP produced yesterday gives the distinct impression that it was made possible by a positive announcement that the company made before the session started. Interestingly enough, that does not appear to be the case.

COCP has no new press releases, no financial or current reports, not even social media announcements – for all intents and purposes, there appears to be no reason for its climb yesterday. And yet, that climb did happen, in spite of all the red flags surrounding the company.

And what red flags would that be?

Well, to start off, COCP‘s latest financial report looked like this:

• Cash and cash equivalents – $15.7
• Total current assets – $16.3 million
• Revenues – $27 thousand
• Total current liabilities – $7.3 million
• Net loss – $2.6 million

Managing to hold on to a cash reserve as large as $15 million is a remarkable achievement for a development stage OTC Markets pharmaceutical company. And COCP will need every last dime of that money, if it is to have even a prayer of bringing a product out on the market. However, as we all know, that money has to have come from somewhere.

The report itself mentions that since the company does not have a steady stream of revenue, it must finance itself through the issuance of common stock in the form of private placements or convertible notes. The result of that practice is clear for all to see:

• On August 8, 2014 COCP had 122 MILLION shares outstanding
• On August 13, 2015 COCP had 694 MILLION shares outstanding

$15 million out of COCP‘s current assets were acquired on March 25, 2015 as a result of a Securities Purchase Agreement with its directors. Needless to say, the fact that the company has found the opportunity for so much funding is awesome. However, the rampant dilution that COCP is putting its investors through certainly isn’t.

Investors should consider these facts as they make up their mind about COCP.