Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) Bounces Off on MMJ Updates

Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) is getting more serious about its future as an MMJ company, and the stock answered accordingly to another round of corporate updates. After a few uncertain days, EAPH added more than 69% to $0.0592, on buying volumes of $3.32 million, lower than the peak trading, yet recalling the activity of the more successful weeks.

EAPH recently announced that it would be seeking up to $5 million in one financial year, by seeking the assistance of an accredited investor. The company would soon be aiming for a Reg A Filing. Along with the expanded financing of still unknown details, EAPH claims to have finalized its partnership in medical marijuana. Under the current financing agreement, EAPH could only access $1 million of financing per year- but that at least promises less debt and dilution.

For EAPH, it is still early to tell the direction, as in the past weeks the ticker had successful periods followed by sell-offs. Investors’ forums are a perfect storm, with posts on the merits of EAPH being deleted. The critical atmosphere points out that EAPH is not ready with MMJ products, and is a formerly shady pink sheet that has one non-FDA product, and some attempts at stem cell treatments in Mexico. To top it off, EAPH is still remembered as insolvent, holding only:

• $565 cash

• $125,000 current assets

• $592,892 current liabilities

• Zero revenues

• $61,000 quarterly net loss

The partnership to form subsidiary Hemp Life Today, LLC is no less worrying, as EAPH chose none other than another dubious pink sheet company- Global Links, Corp. (OTCMKTS:GLCO), a company claiming to be organizing the world’s largest barter trade exchange. Before that, GLCO was a casino company and even a mining firm, with eight reverse-splits in its past to improve share structure. That, plus the hazy promise of a medical cannabis product, make EAPH sound less like a source of medical marijuana treatments and more like a disaster waiting to happen, especially following positive periods.

In comparison, the behavior of Creative Edge Nutrition, Inc. (OTCMKTS:FITX“>FITX) is quite different, the stock being a part of the marijuana index and thus receiving more constant attention. FITX“>FITX is a bit stagnant in the past weeks, hovering around $0.08. The company has the benefit of being a producer of supplements that could more easily bring to market a form of medical cannabis.

EAPH, however, is not the typical pharmaceutical company that could just expand its reach. On the positive side, EAPH plans to work on the Canadian market, and the business address given reveals a bustling business area in Toronto.

If you like EAPH for the relatively low price, which could allow significant daily run-ups, it is still best to be aware of the heavy publicity and artificial effects on the stock price. EAPH has had periods of sliding down as far as 50%, and is currently hovering near its two-year peak levels, so plan the timing and size of the investment accordingly.