Easton Pharmaceuticals Inc (OTCMKTS:EAPH) With New Managers And A Pump
A couple of hours after trading seized yesterday, Easton Pharmaceuticals Inc (OTCMKTS:EAPH) announced that they have a new addition to their management team. His name is Neil Mellor, he is going to serve as a COO and he has years of experience in the pharmaceutical industry. Apparently, the third parties decided that this calls for a new advertisement campaign and they promised Exclusive Stock Pick $2,500 if they do something about the silence that has been surrounding the stock lately. Around 8PM, just two of hours after the press release, an email popped up in our inbox and it talks at length about EAPH‘s enormous upside potential, the new COO, the low float and other such things. Is there are reason to get excited, though?
As always when you start your research on a company, you need to ask yourself some questions. One of the most important ones is: “Do they have a product?”.
Well, if the pumpers are to be believed, the gigantic growth is about to be caused by Viorra – a revolutionary product that is supposed to relieve female sexual arousal problems and they can’t stress enough on the estimated value of the market for such treatments, on the fact that FDA approved it as containing “Generally Accepted as Safe Ingredients” and the ways in which these factors could make you very, very rich. There’s only one thing that they fail to mention – the fact that it’s not ready yet.
There could be a number of reasons for this, but we reckon that the biggest problems that EAPH have had to deal with throughout the years has been the deary financial situation. The latest quarterly report covers the first three months of 2013 and it contains the following figures:
- NO CASH
- current assets: $137 thousand in prepaid expenses
- current liabilities: $474 thousand
- no revenue since inception
- quarterly net loss: $22 thousand
When you have a look through the previous reports, you will see that EAPH‘s financial situation has been pretty much the same for a while and, quite frankly, we can’t see how they will manage to change it.
Sure, they could borrow some money like they have done in the past, but we can see that when they needed to pay the loans off, they were forced to issue quite a lot of shares which in turn has crushed the stockholders’ investments.
And the more the days go by, the more doubts are raised as to whether the Viorra product will ever be released. If you have read through our previous article, you will probably know that EAPH set themselves the task of commercializing it by the middle of 2013. Right now, it’s the middle of 2013 and we have yet to see even an announcement that the sales have started.
If you have a look our coverage from April 9, you will also see that they have pushed the launch date in the past and having gone through the figures above, we were pretty sure that they have postponed it yet again. Apparently, however, they can no longer be bothered with deadlines which means that potential investors have no idea when (and if) EAPH will start making money.
In the meantime, the ticker slid below the $0.01 per share mark, but we reckon that the lack of actual products and revenues isn’t the only reason why this has happened. The decrease in value might also have something to do with the pump that took place at the beginning of April. As we wrote back then, there was little to suggest that the ticker will manage to stay on its feet under the pressure and, sure enough, just ten days after the emails started flying around, it was already a third of the way down. The total losses in just two months amount to around 52%.
While EAPH might gains some ground because of the current promotion, the facts above suggest that it will probably be just as short-lived as the last one, which is why you should be extremely careful when you are considering the risks of a potential investment.
