Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) Rises On Promises
After slumping for quite a while and posting six sessions in a row with nothing but losses the of Easton Pharmaceuticals, Inc. (OTCMKTS:EAPH) is making a bit of a resurgence this week. On Monday it surged upwards and finished the session 16% up at $0.0314 while yesterday it continued to recover by adding 13% and climbing to $0.035. Traded volume increased to 17 million shares resulting in a dollar value of $588 thousand.
Sadly the shift in momentum was not caused by a major progress with the business initiatives of the company. The last PR announcement was made on April 14 and it detailed the agreement with BMV Medica, S.A. de C.V. for the distribution of EAPH‘s VIORRA gel in Mexico. A positive outcome but overshadowed by fact that EAPH has been trying to market this product for more than a decade without earning a cent in revenues. Not to mention that VIORRA has still not been approved for commercialization by the Mexican authorities.
The plans for the marijuana industry, which were the sole reason for the surge in share price in the first place, have not moved even an inch since their first announcement. Despite being in negotiations with Vodis Innovative Pharmaceuticals for more than two months there is still no end in sight.
Not to mention that EAPH were supposed to unveil their Hempstral SA anti-aging product during the first week of April at the Total Health Show held in Toronto. Well, in the PR from March 31 they said they had to cancel their participation because they couldn’t meet all the necessary requirements.
At the same time the financials of the company are as depressing as ever. EAPH finished 2013 with the following results:
- $187 thousand cash
- $287 thousand total current assets
- $584 thousand total current liabilities
- ZERO revenues
- $346 thousand net loss
According to EAPH‘s twitter the company has been able to gather $870 thousand in cash which certainly improved their position but the funds came at a considerable cost – millions of freshly issued shares company. EAPH doubled its authorized shares from 250 million to 500 million at the end of 2013 but now they are sitting at 498 million outstanding shares. This means that even greater dilution should be expected in the future especially if you take a look at the PR released just a few minutes ago. In it the company announced that they are moving forward with their Regulation A approval which will enable them to sell $5 million worth of shares for the next year.
For now EAPH has little more to offer than promises. Even if you truly believe in their potential it is paramount to do your own due diligence before attempting any trades with their stock.
Many of the marijuana pennystocks are still suffering through corrections and are unable to stop their slide. Yesterday Tranzbyte Corp. (OTCMKTS:ERBB) dropped by 10% and found themselves at $0.05 per share. Cannabusiness Group, Inc. (OTCMKTS:CBGI) are quickly approaching the same price levels after crashing by another 16% and closing at $0.06.
