Nuvilex, Inc. (OTCMKTS:NVLX, NVLX message board)’s stock has had a good run in the charts since the beginning of the year, with a generally upward direction . The ticker reached a price of $0.50 per share in the end of February, but started sliding and is currently trying to recover.
Recently, it has had several sessions in the green and there are some good news. On Tuesday, the company announced that they have signed an agreement with Translational Drug Development (TD2), who will help NVLX advance their cancer treatment program and provide assistance for FDA approvals.
This is good news, because NVLX’s latest quarterly filing with the SEC, covering the period ended January 31, 2013, showed that the company is in need of cash in order to continue its operations and they have to hasten the process of finishing and releasing a revenue producing product.
- cash: $864 thousand
- current assets: $1.5 million
- total assets: $5.6 million
- current liabilities: $479 thousand
- revenue: $0
- net loss: $458 thousand
These digits are the exact reason for which the company made an agreement with Lincoln Park Capital Fund, LLC, under which the latter have initially purchased 8 million of shares of common stock at a price of $0.25 pe share and are going to invest $25 million more in NVLX in the next 30 months.
The same fund entered into an agreement with Amarantus Bioscience Holdings, Inc. (OTCBB:AMBS) for $20 million in financing earlier this month. The deal is that financing that involves issuance of shares causes quite a lot of dilution and the stock suffers the consequences.
Nonetheless, NVLX added another 10% to its value after the TD2 press release on average volumes. There were a total of 6 million shares traded during the session, which generated $2.2 million in dollar volume.
Still, the threat of dilution is serious, so be sure to do your own due diligence and weigh out the risks before deciding to invest.
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