Elite Pharmaceuticals, Inc. (OTCBB:ELTP) Still Crashing Hard
Elite Pharmaceuticals, Inc. (OTCBB:ELTP) managed to hang on to its market value even when its latest financial report hit the web, but that state of developments did not last. The company lost the investors’ support shortly after its much anticipated conference call, and has been painting the charts red ever since.
At first glance, ELTP’s 10-Q for Q3 2014 didn’t look that bad:
- Cash – $7.6 million cash
- Total current assets – $11.7 million
- Total current liabilities – $3.8 million
- Total Quarterly Income – $25 million
A more careful look at the financial section reveals that the shockingly high number given under “net income” can be attributed to change of fair value of derivatives, which means the income total isn’t really indicative of the company’s progress in said quarter. But even if you are to ignore that number and judge by more reliable indicators, the situation does not seem all that bad.
- Quarterly Revenues – $1.2 million total revenues
- Quarterly loss from operations – $4.6 million
Many investors reasoned that – hey, ELTP isn’t profitable yet, but at least it is making revenues and it has cash on hand to fund its operations until it does. Sadly, the bad news brought by the conference call quickly derailed that particular optimistic train of thought. It turned out that the approval of ELTP’s drug by the FDA may be delayed, because more clinical trials may become necessary.
Such things happen all the time to medical OTC Markets companies, but evidently investors didn’t expect this turn of events, and their disappointment can be seen clearly on the charts.
In any case, the bottom line is this – even though ELTP hasn’t really fouled up as badly as its chart movement would suggest, its slide may continue for some time yet.
