Georgi Kamburov

Emispehere Technologies, Inc. (OTCMKTS:EMIS) Falls Back Down

by Georgi Kamburov July 13, 2016

All it took was a single session for the stock of Emisphere Technologies, Inc. (OTCMKTS:EMIS, EMIS message board) to wipe the entirety of its gains from the previous two sessions. The ticker finished the trading day with a 7% correction at 74 cents per share. The losses could have been far scarier with EMIS falling all the way down to a intraday low of $0.64 but it managed to retrace most of its steps back up in last hours of the session.

Just a little over a month ago Emisphere actually climbed to new 52-week high of over 90 cents but currently they are sitting close to 19% lower. At first glance the underwhelming chart performance might seem rather surprising. After all, EMIS has financials that set it apart from the vast majority of pennystock ventures. The company finished the first quarter of the year with:

• $10.4 million cash
• $12.7 million total current assets
• $21.7 million total current liabilities
• $373 thousand net revenues
• $1.8 million net loss

During the first quarter Novo Nordisk (NYSE:NVO) launched a Phase 3a clinical trials for oral semaglutide that are going to utilize Emispehre's Eligen carriers. During the Phase 3 program 9,300 patients are expected to be enrolled in ten clinical studies. Back in October 2015 EMIS amended their agreement with NVO and as a result received a total payment of $14 million.

Here is where the problems start, though. Under the terms of the company’s convertible reimbursement promissory notes, secured loan agreement and royalty agreement EMIS is required to use 50% of certain proceed, which included the $14 million from NVO, as a prepayment of certain outstanding amounts of the reimbursement notes and the loan agreement. This would leave EMIS with extremely limited financial resources. The date by which the prepayment should have been made was extended to June 13 but in an 8-K filing submitted on June 17 EMIS announced a further extension to July 13, period that ends … today.

The stock of the company could continue to display heightened volatility in the coming sessions. Plan you trades carefully and always do your own due diligence.

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