Georgi Kamburov

Propanc Health Group Corp (OTCMKTS:PPCH) Crashes Hard

by Georgi Kamburov June 1, 2015

On Friday Propanc Health Group Corp (OTCMKTS:PPCH, PPCH message board) failed to sustain its share price and began sliding down the chart right from the opening bell. By the time the session came to a close the ticker had wiped over 25% of its value dropping to $0.057 per share. The traded volume for the session of 25 million shares was significantly higher than the 30-day average of 16 million shares.

PPCH tried to push their stock in the right direction by issuing a new PR a couple of hours into the trading day but it had absolutely no effect. Well, that shouldn't be such a surprise considering the fact that it contained little substantial information – PPCH announced that they had briefed investors at the SeeThruEquity 4th Annual Microcap Investor Conference.

Just two days earlier SeeThruEquity gave PPCH’s stock a major push after setting a twelve-month price target of $1.52. The initial reaction from the market was massive with investors rushing in and lifting the ticker to $0.094. As Friday’s session showed though the positive momentum seems to have quickly dissipated as investors realized that nothing around PPCH had actually changed.

The company is still in a depressing financial state with:

• $168 thousand cash
• $308 thousand total current assets
• $2.1 million total current liabilities
• ZERO revenues
• $454 thousand net loss

With limited cash reserves, working capital deficit of $1.8 million and accumulated deficit of $19 million Propanc’s financials leave a lot to be desired. Even a bigger red flag however is the continued dilution of the common stock.

In our articles about the company we have often warned you that millions of shares have been issued at discounted prices as a conversion of debt - nearly 30 million shares were issued at $0.0006 or $0.0007 while over 125 million shares had prices ranging between $0.0011 and $0.0020. Out of the liabilities the company had at the end of March $1.1 million were convertible notes. Even with the two notes worth $100 thousand that were prepaid before they could be converted that still leaves PPCH with a lot of convertible debt. Not to mention the $60 thousand convertible note and the monthly fee of $5000 that Propanc decided to pay the Wealthy Biotech Trader in order to be featured in the PRs published by the entity.

PPCH is still at the very start of the process towards an FDA approval. Their leading, and only, drug, PRP, is currently in animal trials. The company expects to have initial results by mid-June with additional data in July. If the reported results are encouraging it could keep the hype going and prevent the stock from sliding further down the chart. Still, the red flags around PPCH are far too serious to be underestimated. Do extensive due diligence and plan your trades carefully before putting your hard-earned money on the line. 

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