Yesterday the stock of Advaxis, Inc. (OTC:ADXS) left all resistances back to October last year behind. The apparent reason for the action was the initiated coverage by an investment research company for ADXS stock, announced on Tuesday.
ADXS closed Wednesday session at $0.17 for a share with a 17.24% jump in the share price and 2.6 million traded shares. During the day, the share price hit $0.18, which is the highest level for the past six months, whereby the trading volume is also a six-month record for ADXS. Next resistance is at $0.19 and if it gets broken as well ADXS could be traded above 20 cents for a share.
Fundamentally, thing do not seem so bright, which explains why ADXS fails to catch a stable uptrend recently. The company is focused on developing safe and effective cancer vaccines that utilize multiple mechanisms of immunity, but is still in the development stage and has not marketed any products yet. Thus, the announced research coverage and the distribution of free research reports should not be enough to make ADXS look like a good long-term hold.
The latest SEC filings of Advaxis suggest that possible stock sales by certain shareholders could soon affect negatively the share price. A week ago, the company filed the next subsequent amendment to a prospectus aimed to allow the resale of over 61 million shares of ADXS. These shares are issuable upon the exercise of warrants held by stockholders of the company.
Advaxis balance sheet reveals additional risks, and maybe even puts the company’s further existence under question. ADXS has mostly intangible assets consisting of legal and filing costs associated with obtaining patents and licenses, and only about $500,000 in liquid assets. Total current liabilities reach nearly $6 million, among which convertible notes and notes payable are to be found. Management expects the ongoing operational costs to keep growing due to several clinical trials that the company began this year, thus additional funds seem urgently required if Advaxis is to develop its potential.