Nothing seems to stop the upward run of Emerald Medical Applications Corp (OTCMKTS:MRLA). The incredible spike that commenced right before the end of the year 2017 has continued in January 2018.
In a first impulse, the momentum pushed up the stock from $0.05 to almost break the level of $0.15 before pulling back to the $0.05 mark. When we believed that the share price action was slowing down, the momentum came back again. In a new upward run the price broke the psychological resistance of $0.25 and continued to next resistance level of $0.40.
With the stock currently trading in the $0.25-$0.30 handle, it could again repeat the previous movement and continue the uptrend. However, if the longs doubt for a second the price could also fall to test the level of $0.20. Shorts and longs will be waiting at this price mark, where the price action will be critical for what will happen next.
Check the following stock chart before we detail the recent developments shared by this company:
One year stock chart for Emerald Medical Applications Corp OTCMKTS:MRLA
Emerald Medical Business Overview
The company was established in 1995, and it is headquartered in New York. It is focused on the development, sale, and service of imaging solutions utilizing its proprietary DermaCompare software, which is FDA approved.
The company combines the use of artificial intelligence, crowd-sourced, and a cloud-based mobile platform to obtain a total of 25 total photos that are later used to detect cancer moles and skin anomalies. The solution is beneficial for detection of skin cancer.
Check the following video. It shows in great details how the software can assess the skin of patients:
How significant is the market opportunity?We believe that the most interesting is the number of people that should be using this software. Currently, between 2 and 3 million non-melanoma skin cancers and 132,000 melanoma skin cancers occur each year globally. One in every three cancers diagnosed is a skin cancer and, according to Skin Cancer Foundation Statistics, one in every five Americans will develop skin cancer in their lifetime. Also, the costs for treating patients is equal to $150,000 per annum. These costs are drastically reduced if the cancer is detected on time.
How advanced is the development process?
The company has already signed distribution agreements. Marketing activity to medical professionals has already commenced in Italy, Netherlands, Sweden, Israel, Australia and New Zealand. Distribution agreements are also expected throughout Europe, North America, Asia and elsewhere. Additionally, the company has already noted relationships with several public and private medical centers and clinics as well as with a leading University Medical Center in Israel.
In our opinion, the company has an innovative product, and it is already developing a distribution network. We believe that it is right now when we need to research this company before the price moves any higher.
What's moving the share price?
We believe that the longs used the quarterly earnings report released on December 29, 2017, to attack the $0.15 mark. It is not clear if the momentum can be justified with the numbers released on that date.
The number of assets increased 2% concerning the same quarter in 2016, and it was reported equal to $58,894 as of September 30, 2017. Among the assets, the most interesting was the increase of receivables, a 333% increase to $31,230. Regarding the liabilities, they increased a 15% in comparison to the same quarter in 2016 and were equal to $1,493,674.
The company is obviously not reporting revenues to date as it is still developing the product. It is interesting noting that the number of R&D expenses seems to be declining. From quarterly R&D expenses equal to $155,338 in September 2016 they declined in the same quarter to $9,779. Does it mean that the company is finishing the development phase and it is now heading to commercialization? It this is correct we should commence seeing first revenues sooner. It is good news.
We believe that two press releases that were put out in January created the explosive movement seen in the stock chart. In those communications, it was noted that company's subsidiary Virtual Crypto Technologies Ltd. had signed an agreement with Chiron Refineries Ltd (TLV:CHR) to develop a cryptocurrency business.
Virtual Crypto Technologies Ltd. was formed by MRLA on January 17, 2018, and it is focused on the sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices. The market seemed to appreciate the smart business move of MRLA. The company will be profiting from the growth in the cryptocurrency industry.
Conclusion
Currently trading with a market cap of $5.6 million, MRLA is an exciting story among small caps. With approximately 22 million shares outstanding and a float of 3.3 million readers should expect share price volatility. Volatility players have a new ticker to monitor.
To sum up, this is a stock that seems poised to surprise.
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Disclosure: We have no position in MRLA and have not been compensated for this article.
Image courtesy of Alexander via Flickr
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