Penny Stocks – ACST Stock price Increases Over 30% Pre-Market: Why It Happened

• The stock price of Acasti Pharma Inc (NASDAQ: ACST – TSX-V: ACST) is trading at over 30% pre-market as of 6:02 AM ET. This is why it happened.

The stock price of Acasti Pharma Inc (NASDAQ: ACST – TSX-V: ACST) is trading at over 30% pre-market as of 6:02 AM ET. 

Investors are responding to Acasti Pharma announcing its operating and financial results for the third quarter of fiscal 2021 ended December 31, 2020. The consolidated financial statements were prepared in accordance with generally accepted accounting principles in the U.S.

The loss from operations for the three months December 31, 2020, was $2 million compared to a loss from operations of $6.1 million for the three months ended December 31, 2019. This change was due mainly to a reduction in R&D, general and administrative expenses, and sales and marketing expenses.

The net loss for the 3 months ended December 31, 2020, was $3.2 million or $0.03 per share, a decrease of $8.9 million from the net loss $12.1 million or $0.14 per share for the three months ended December 31, 2019. And the reduction in net loss, resulted primarily from net financial expenses decreasing by $4.7 million to a loss of $1.3 million for the three months ended December 31, 2020, as compared to net financial expenses of $6 million for the 3 months ended December 31, 2019. 

This is due mostly to a decreased impact from the change in fair value of the derivative warrant liability as compared to the comparative fiscal quarter in 2019, caused by a proportionately higher decrease in the quarter over quarter closing share price partly offset by a reduction in the number of warrants outstanding due to exercises during the prior year.

The company’s R&D expenses before depreciation, amortization and stock-based compensation expense for the 3 months ended December 31, 2020 totaled $620 thousand compared to $3.2 million for the three months ended December 31, 2019. And the net decrease was mainly attributable to a reduction in research contracts with the reduction in R&D activities as well as a reduction in headcount within the department.

The General and Administrative expenses before stock-based compensation expenses were $931,000 for the 3-months ended December 31, 2020 and decreased by $262,000 from $1.2 million for the 3 months ended December 31, 2019. This decrease is mostly a result of a $251 thousand decrease related to legal and professional fees.

The Sales and Marketing expenses before stock-based compensation expenses were $488,000 for the 3 months ended December 31, 2020 compared to $562,000 for the 3 months ended December 31, 2019. And the change was related to severances associated to the reduction in headcount in the department of $118,000, offset by the reduction in professional fees and other sales activities of $192,000 as a result of an end to planned pre-launch marketing activities for CaPre.

And cash and cash equivalents totaled $26.5 million as of December 31, 2020, compared to $14.2 million at March 31, 2020. Acasti believes that existing cash will fully fund the company’s operations through to eventual completion of the evaluation of strategic options or at least through the next 12 months, but there can be no assurance as to when or whether Acasti will complete any strategic transaction or collaboration. The company’s ability to continue as a going concern is dependent upon its ability to achieve a successful strategic alternative and ultimately generate cashflows to meet its obligations.

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