On Friday, the share price of Rich Pharmaceuticals Inc (OTCBB:RCHA) closed in red after an initial surge on Thursday. The impact of the new PR published on Thursday seemed to be short lived as in the very next trading session it closed in red. The company confirmed that Dr. Chittima Sirijerachai is selected as the principal investigator for the upcoming AML clinical study for their lead candidate RP-323 drug.
Here, investors would like to know whether the PR released last week is enough to back a more prolonged rise on the chart. In February, Rich Pharmaceuticals exploded posting gains of more than 1500% in a single trading session after the company released manufacturing news of the necessary quantities of its lead candidate RP-323 study drug. From thereon, RCHA share price has been declining lower and lower down the chart erasing almost all of its gains.
The financial performance
It is a common thing for penny stock Pharma companies to have dismal financials. Rich Pharmaceuticals is no exception as it just had cash of $5823 as stated in last financial report. The company doesn’t generate any revenue and reported net loss of $1.4 million with total current liabilities at $1.2 million. The numbers are the biggest red flag attached to the company.
The other problem related to Rich Pharmaceuticals Inc (OTCBB:RCHA) is the distressing dilution of the common stock. As of February, the company reported almost 860 million outstanding shares which increased to 1.4 billion in the first week of March. In a matter of seventeen days over 540 million shares diluted as a conversion of notes. As per the latest 8-K form, 56 million shares were issued at $0.00048 and 121 million shares were issued at $0.00046. In January, Rich Pharmaceuticals re-priced more than 62 million granted options. As of now, they bear an exercise price of $0.0017.