OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) has been sliding hard over the last two weeks as traders press the bear side on rising volume. However, we are also testing very important support levels and the stock may be worth a look. This is a former major momentum play, perhaps qualifying as the most dramatic runner during the first quarter of 2017, when shares of the stock blasted off for nearly 2,000% in under two months.
Now, as shares start to falter, the company’s chairman has issued a direct update to shareholders. The letter basically addresses the scandal that has hit shares of late, wherein an advisor and major shareholder is being targeted by the SEC for some shady dealings. The company is out making the point that it actually isn’t a party to the case, and remains unscathed on a legal basis. That message may or may not resonate with the market over coming days, but often times, we see these situations play out with a bit of a bounce, so we thought we would put it on your radar – but please, do your own due diligence here.
OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) casts itself as a company that engages in the research and development of Cannabis-based medical products. The company provides medical products for the treatment of various medical conditions and/or diseases, such as multiple myeloma, psoriasis, PTSD, and migraines; and delivery systems. It also provides consulting services to companies and governmental agencies related to international medical cannabis protocols and regulations.
OWCP through its wholly-owned Israeli subsidiary, One Word Cannabis Ltd., conducts medical research and clinical trials to develop cannabis-based pharmaceuticals, treatments and unique delivery systems for the effective delivery and dosage of medical cannabis.
All OWC research is conducted at leading Israeli hospitals and scientific institutions, and led by internationally renowned investigators.
OWCP’s Research Division is focused on pursuing clinical trials evaluating the effectiveness of cannabinoids in the treatment of various medical conditions, while its Consulting Division is dedicated to helping governments and companies navigate complex international cannabis regulatory frameworks.
The Company is a wholly owned subsidiary of OWC Pharmaceutical Research Corp. The company was formerly known as Dynamic Applications Corp. OWC Pharmaceutical Research Corp. was founded in 2008 and is based in Petach Tikva, Israel.
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As noted above, shares of the stock have been rocked during the past couple weeks as the SEC moves on one of its former large shareholders and former advisors – one Mr. Jeffrey Friedland.
According to an 8K put out by the company, “The Registrant has been made aware of the fact that the United States Securities and Exchange Commission (the “SEC”) has commenced a civil injunctive action against Mr. Friedland and two related entities (the “Friedland Defendants”) by the filing of a complaint in the United States District Court for the District of Colorado. The SEC alleges in the complaint that the Friedland Defendants “engaged in a nearly $7 million securities fraud scheme to conceal the nature of [Mr. Friedland’s] interest in . . . OWC Pharmaceutical Research Corp. (“OWC”) to allow him to unload his considerable holdings in OWC stock into the marked that he helped to artificially inflate.“
But management notes that “As we have stated in our 8-K filing of today, we are neither a party to the pending SEC action against a former adviser to the Company, nor is the Company alleged to have been a party to nor had any knowledge of the purported scheme by the former adviser, who is the subject of the SEC action.”
Now commanding a market cap of $38.4M, OWCP has a bankroll ($1.1M) of cash on the books, which compares with virtually no total current liabilities. OWCP is pulling in trailing 12-month revenues of $50K. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling at 0% as of its latest reporting period. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $OWCP stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $OWCP, either long or short, and we have not been compensated for this article.