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At first glance Guided Therapeutics Inc (OTCBB:GTHP<\/a>)’s correction of 3.96% yesterday may not seem that scary. There are two factors that make things far more alarming though. First, the drop took place on a traded volume of just below 10 million shares while the monthly average stands at a little over 1.3 million. And second, GTHP<\/a> <\/strong>suffered a red close despite the fact that they issued a new PR after two weeks of silence.<\/p>\n In the press release the company announced that it had reached a licensing agreement with Shenghuo Medical, LLC. Under the terms of the deal the Chinese company will have to pay $200 thousand in near-term payments, provide funding to secure Chinese regulatory approval and pay royalties for the sale of disposables in exchange for the exclusive sales and manufacturing rights of GTHP<\/a>‘s <\/strong>LuViVa Advanced Cervical Scan for China as well as additional Southeast Asian countries. Shenghuo could also potentially provide $1 million for the advancement of the LuViVa towards FDA approval.<\/p>\n The news definitely made an impact and at the start of yesterday’s session GTHP<\/a>‘s <\/strong>stock actually surged upwards on some rather intense trading. The momentum disappeared in mere minutes, though, and the ticker wiped its gains.<\/p>\n GTHP<\/a> <\/strong>have been having a hard time forming a more prolonged upward trend despite the company reporting record revenues for the first quarter of the year. In its previous press releases GTHP<\/a> <\/strong>even stated that for 2016 the generated revenues could reach somewhere between $3 million and $5 million. For now, however, GTHP<\/a>‘s <\/strong>financials fail to inspire much confidence. At the end of March they had:<\/p>\n • $56 thousand cash For a pennystock to achieve a positive bottom line is far from an easy task but it should be noted that the main reason GTHP<\/a> <\/strong>managed to do it was a $1.4 million change in the fair value of warrants. Adding the extremely limited cash, massive working capital deficit, and the accumulated deficit of over $122 million makes the picture even grimmer.<\/p>\n
• $2.05 million total current assets
• $6 million total liabilities
• $262 thousand revenue
• $130 thousand net income<\/p>\n