Will Propanc Health Group Corp (OTCMKTS:PPCH) Stop Crashing?
On November 17 Propanc Health Group Corp (OTCMKTS:PPCH) announced the results of the preclinical animal efficacy studies for their lead anti-cancer drug, PRP. Although the PR was indeed encouraging it failed to stop the stock of the company from sliding further down the chart. In fact PPCH have been incurring nothing but losses for the past six sessions. On Friday the company closed nearly 10% in the red at $0.0288 per share.
Well, the latest PR may have been positive but that doesn’t make PPCH any less risky. The company is simply surrounded by red flags. Let’s start with the latest financial report. At the end of September PPCH had:
• $77 thousand cash
• $300 thousand total current assets
• $3.5 million total current liabilities
• ZERO revenues
• $839 thousand net loss
With less than $80 thousand in cash and massive working capital deficit of over $3 million the balance sheet doesn’t inspire much confidence. The problem is that the picture gets even scarier when you add the $2.15 million in convertible notes that were outstanding at the end of the period covered by the report. Many of the notes can be turned into shares at a 45% discount. Just for the first half of October 21.9 million shares were issued at $0.012375 each while 5 million shares were converted at a price of 1 cent per share. As a whole the outstanding shares of the company grew from 72 million at the of June 2014 to 342 million at the of June 2015. As of November 13 the O/S was sitting at just below 400 million shares.
At least the company was able to secure a $4 million financing from an institutional investor, Delafield Investments Limited , and according to PPCH this funding should be sufficient to cover their needs for the next twelve months. If you open the 8-K filing covering the deal and scroll down for a while you will see that one of the directors of Delafield is none other than Mr. Joshua Sason. If the name doesn’t ring any bells let’s just say that Mr. Sason is behind some of the most notorious toxic funders operating in the world of pesnnystocks.
In early trading today PPCH is quite volatile making sharp movements up and down but currently it is sitting 7.99% in the red at $0.0265.
