Recently, the share prices of Propanc Health Group Corp (OTCMKTS:PPCH) fetched adequate investor attention as it surged on March 10, posting astounding gains of 502.63% and recording $2.42 million in dollar volume. The stock surged on massive volume of almost 125.46 million. However, a correction followed in same trading session which is usual for OTC stocks that make big movements. Since then Propanc tried to post strong gains but failed to touch peak level again.
Last trading session was no different when stock entered in red zone to close at $0.0174. The stock gained momentum in the second week of March when a newsletter announced the company on the verge of developing new cancer treatment. The hype cooled down next week followed by significant losses.
The financial performance
Analyzing the financial results, it is evident that Propanc is no different from most of the OTC companies. The losses are massive and revenue is zero. As per the last report released at end of September 30, 2014, the company reported cash of $3.98 million. The cash situation of Propanc is relatively better than other OTC firms. The current assets stood at $5.03 million but current liabilities exceeded $9 million. The net loss on the quarter was $14.37 million
The significant amount of cash balance reported by Propanc is no surprise as it is a biotech firm. However, the pressure is visible on the balance sheet in the form of extended liabilities and net loss. Also, the company issued over 100 million shares in less than three months indicating that it can opt for more dilution of common stock in coming months.
Looking at the financial numbers and the current market capitalization, the prospects of Propanc performing strong in the future looks dim. The valuations do not support its aspirations of developing a treatment for cancer.