The company presented at the Jeffries conference, and the stock fell 7% during the day, but some trivial trade bid the stock up after hours in order to print it better. At first, I did not understand why the stock should have fallen upon the presentation. Now, I understand. While the presentation of the science of the company was good and interesting, there was zero information about the capital/cash position of the company and its burn rate. The company reported $11 million of cash at March 31, and it reported burning $9 million in R&D in the first quarter. So, at first blush, the company could be out of cash in June. However, the 10Q also says that there were some one-off items during the first quarter. These only total about $5 million (page 24 of 10Q). Thus, even eliminating these items as one off, the company has less than 3 quarters of cash remaining. One can also wonder how many such one-off expenses will occur during these next 2 to 3 quarters further increasing their burn rate. It seems highly unlikely that the company will achieve any actual FDA drug approval within six months. This information indicates that important dilution is likely imminent. This signal is also inconsistent with the stated business operating strategy of the company to minimize burn rate. I think that traders sold the stock correctly based upon the information, or lack thereof, that the company provided in the Jeffries presentation. I hope that the company will clarify the information and that the whole truth will show that the company is conserving cash per its business strategy, but that remains to be proven at this point.
