There is a lot to like about PAA at the moment and the biotech...

There is a lot to like about PAA at the moment and the biotech sector in general.

Here are a few of my thoughts as to why PAA is a no brainer at these level, I've been in PAA since 2016 so have a good idea of how things have played out over the last couple of years.

Mid 2018 PAA put out a great quarterly report, it was cashflow positive and generated a lot of excitement around the stock, but the reason the report was CF+ was because they received an R&D grant in that period and had their seasonally largest month of revenue. The next period they had a normal size loss for a biotech but it caused many investors to question where the company was at, this also coincided with the company announcing the reformulation of MPL which crashed the stock price.

I'm sure many new shareholders jumped in off the back of the cashflow positive announcement without a lot of research so had little idea what was happening before investing, so the company had a large portion of its share register unhappy.

Since then PAA has managed to reduce it's cash burn for 3 consecutive quarters to $288K last quarter, they have a $672K tax rebate coming in the next quarter (their seasonally worst quarter), so this move should smooth the cashflow issues and show how strong a small cap Biotech company PAA is with Epichem providing consistent revenue and reducing the companies losses.

Here is what I like about the position we are currently sitting in:

PAA is a Biotech about to enter stage 2 trials
Revenue approx $3.7M this year.
Market Cap $20M @ 7c with cash of at least $2.3M in the bank.
Shortfall placement oversubscribed by Alto shareholders.

Alto Capital has very strong broker support for this stock in Tony Locantro.
Alto also have very strong shareholders who understand Biotech stocks.

Have a look at EX1 as an example, this is a stock Alto listed last year; you can see how their shareholder base operates.

Then there are the non listed options that expire in November 2019 with an exercise price of 12c.
There are 18,738,852 options * 12c = $2.2M

If the company can get the stock price north of 12c by November they will have the ability to raise another $2.2M through exercise of the options.

MC $20M = 7c
MC $40M = 14c
MC $60M = 21c

I suggest there is plenty of room for this stock to move and the company have incentive to get it there. If we as a collective investor base can hold our shares until we get what they are worth, the stock should head north pretty quickly.

Enjoy the ride everyone, it should be worth the wait