Propanc Health Group Corp (OTCKTA:PCH) Logs Another Red Session
On June 17 the stock of Propanc Health Group Corp (OTCMKITS:PPCH) posted its current 52-week high of $0.1338 per share. Since then, however, the performance of the ticker has been nothing short of a total disaster with PPCH registering just 7 sessions that didn’t end with losses. After slashing another 13.7% of its value during yesterday’s trading the stock currently sits at $0.042. This means that if you bought in at the highs from last month you may now be staring losses of nearly 70%.
Despite the massive decline in share price PPCH are still commanding an extremely over-inflated market cap of over $14.5 million. All it takes is one glance at the latest financial report filed by Propanc in order to see how ridiculous such valuations truly are. PPCH finished the first quarter of 2015 with:
• $168 thousand cash
• $308 thousand current assets
• $2.1 million current liabilities
• ZERO REVENUES
• $454 thousand net loss
The red flags run far deeper than the lackluster financials though. The company has been drowning its long-term shareholders in dilution. Back in November, last year, PPCH had around 91 million outstanding shares. Just six months later, as of May 15, 2015, that number had ballooned to nearly 335 million outstanding shares. According to the OTCMarkets profile page of the company as of July 14 there were 347 million outstanding shares.
The majority of the issued shares came into existence through the conversion of debt at a massive discount to the market price. The conversion prices of the shares ranged between $0.0006 and $0.0035. If you want to see the whole picture you can open the quarterly report to pages 17 and 18.
The risks surrounding the company are enormous. Propanc’s lead drug candidate, RPP, is currently undergoing pilot animal studies, which means that even if the results are encouraging the company will still be facing years of capital-intensive clinical trials. Funding these trials could result in the company taking on even more convertible debt.
