Propanc Health Group Corp (OTCMKTS:PPCH) Can’t Handle the Pressure
On June 17, a little over two months ago, Propanc Health Group Corp (OTCMKTS:PPCH) recorded a 52-week high of more than $0.13. Right now it’s barely hanging on to the $0.03 mark.
Perhaps more worryingly, it’s hurtling towards the ground at an absolutely terrifying rate of speed. Yesterday, for example, it lost about 18% of its value and it sank below the $0.04 barrier for the first time in almost four months. It also logged a dollar volume of nearly $240 thousand which goes to show that there’s no shortage of people that are affected. Time to find out what the reason for the horrific performance is.
One thing’s for sure – there’s nothing wrong with the news. PPCH isn’t the most active company on the PR front, but it’s also refraining itself from flooding the news websites with meaningless press releases. Over the past months, the management team talked about new appointments, about a research agreement with a company called Adaptive Biotechnologies, about positive signals from their pilot studies, and about potential patent applications.
All in all, the news sounds good, but sadly, this is just about the only positive thing we can say about PPCH at the moment.
The latest 10-Q, for example, is not particularly encouraging:
- cash: $168,348
- current assets: $308,816
- current liabilities: $2,160,595
- NO revenues since inception
- quarterly net loss: $454,250
The financial situation is pretty shaky, but sadly, this is far from the only problem. In fact, it leads to some other issues.
The balance sheet has never really been great which means that over the years, the members of the management team have been faced with the difficult task of finding money for the rather pricey animal studies. Unfortunately for the long-suffering shareholders, a few years ago, they decided to go down the toxic debt path. During the first quarter of 2015 alone, the company borrowed nearly $490 thousand worth of notes, all of which are convertible into stock at a 45% discount.
The shareholders weren’t ecstatic. In fact, they were quite upset. The management team saw that and they promised that from now on, they will look for other ways of financing the company’s operations. They even lowered the number of authorized shares from 10 billion to 2 billion.
So, the people running PPCH are trying to do something about the toxic debt. But is it too little, too late?
The performance from the last few months suggests that it might be. The same goes for the fact that during the first calendar quarter of 2015, PPCH issued more than 135 million shares as a conversion of about $235 thousand worth of debt. Just to put things into perspective, the Q1 conversion means that 40% of the current O/S count saw the light of day at an average price of less than $0.002 per share.
