Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) Drops Despite Optimistic PR
The stock of Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) crashed during Friday’s session and continued to crash even harder when trading resumed after the weekend. Yesterday the company wiped more than a fifth of its value by slashing another 21% and closing at $0.05 per share. Although the traded volume was just half of the 93 million shares from the previous session it still resulted in a total dollar value for the day of nearly $2.6 million.
The company once more tried to stop the decline of its stock by releasing another PR article that surprisingly enough contained some rather important information. As we have said in our previous articles about the company their financial state is rather discouraging. According to the last financial report they filed for the quarter ending September 30, 2013 EAPH had:
- $95 thousand cash
- $208 thousand total current assets
- $406 thousand total current liabilities
- ZERO revenues since inception
- $47 thousand net loss
Now they have received an offer from accredited investors to increase their previous $1 million per year funding received through Regulation D offerings to $5 million per year. For now though this is nothing more than a proposal and it failed to influence the performance of the stock.
Although EAPH caught the attention of investors through its intentions to partner with a private company that has received a national medical marijuana license by the Canadian government they are not abandoning their previous plans concerning the VIORRA product and XILIVE cancer treatment.
This may sound rather promising but there are numerous red flags that need careful consideration. The company has been trying to market VIORRA for years without any success. Now they are focusing on a launch in Mexico that should take place by May this year. Well, that is if they manage to reach an agreement with the Mexican FDA audited manufacturer.
The cancer drug is even riskier. There is little to none information about XILIVE on the net outside of EAPH‘s own press releases. And according to them the drug has not undergone any clinical trials and has only been administered under compassionate grounds to two patients. EAPH bough a 10% stake in the drug but have now decided to increase their ownership by issuing more common shares.
At the end of September the number of outstanding shares had already reached alarming levels with 224 million issued out of the 250 million authorized. This only means that EAPH are going to have to increase the authorized shares giving them enough room for further dilution.
EAPH may have a lot of optimistic initiatives but nothing concrete to offer as of yet. Even if you believe in their potential be sure to take into account all the possible risks and do your own due diligence before attempting any trades.
Another marijuana stock that is suffering harsh corrections is HEMP, INC. (OTCMKTS:HEMP). They have been dropping down at a rapid pace wiping nearly 60% of their value. HEMP closed yesterday’s session at $0.135 per share. In early trading today both companies are still going down with HEMP losing another 14% down to $0.116 per share while EAPH are 4% in the red at $0.049.
