For Easton Pharmaceuticals Inc (OTCMKTS:EAPH) Green is the New Red
Easton Pharmaceuticals Inc (OTCMKTS:EAPH) had its fourth consecutive green session on the trading market yesterday. By the time of the closing bell, it had surged almost 37%, reaching a high it had not seen for a long time. It opened with a slight gap up – from $0.0195 to $0.0198, and closed at $0.0267. Before the end of the session, it managed to rack up a volume of 33 million shares, which is three times higher than its average of 9.90 million. Considering the fact that yesterday’s session was a short one, that is an impressive accomplishment.
In their latest quarterly report for the period ended March 31, EAPH listed:
- cash: $586 thousand
- current assets: $674 thousand
- current liabilities: $499 thousand
- no revenues net loss: $68 thousand
Year over year the net loss grew threefold. EAPH explains that the loss comes from “product development expenses”, which did not exist in the corresponding quarter of last year. The more alarming thing is that there was no revenue for that period in the year 2013, as well. We also find out that EAPH “does not own any plants or equipment” and this raises the question “How can a company operate without revenue and equipment?”.
At the top of page 14 of that report, we learn that EAPH sold quite a lot of common stock during the last three quarters. In the three months ended September 2013, for the amount of $169,995, EAPH issued 84,200,000 shares, which makes the price per share $0.002. During the next quarter, ended December 2013, for $345,239, 231,900,000 shares were released, at the price of $0.001. And during the three months, ended March 31, 2014, for $440 thousand, EAPH printed 140,287,003 shares, at the price of $0.003 per share.
According to the Q1 report, on March 31, 500 million shares were issued and outstanding while the A/S count stood at 480 million. That, as you probably know, is not possible. Sure enough, when you do some digging around, you’ll see that Wyoming’s Secretary of State’s Website says that EAPH are actually allowed to issue up to 1 billion shares of common stock. Apparently, the increase in the A/S count was done recently, but was not publicly announced.
As you know from our previous articles, the company is in the medical marijuana industry. From their last quarterly report, we learn that EAPH‘s medicinal marijuana products are in different stages of development and testing. They claim to have many different products, but the ones that take precedence over the others are Viora and Xilive, which are early stage cancer drugs. Because of that, the rest of the products might not be released for commercial sale soon, ergo the company expects “additional losses for the foreseeable future”.
EAPH has issued several press releases lately. From the one, released on June 25, we reach to the conclusion that EAPH has decided to invest in a company that makes products, which ensure the cultivation, bottling and edibility of medical marijuana, and help maintain the highest of quality when it comes to food safety. They make projections about “strong industry demand” and “positive revenues”.
On July 01, EAPH said that they, along with their mysterious Ontario-based partners, are progressing along nicely with the construction of their cannabis growing facility. They also said that they’re getting closer to the Medical Marijuana Grower’s License, which is what most likely pushed the ticker away from the red marker and into the green one. We will have to wait and see whether EAPH will manage to hold on to the current price.
Other companies, which ascent in the charts are Windstream Technolog (OTCBB:WSTI) and United Treatment Centers Inc (OTCMKTS:UTRM). WSTI rose by 31% and UTRM, by 22%.
