Decision Diagnostics Corp (OTCMKTS:DECN) Soldiers On
Some of you will open Decision Diagnostics Corp (OTCMKTS:DECN)’s latest financial statement and they’ll probably think that the company has come a long way. They’ll see that the Q3 revenues are almost 500% up from on the ones logged twelve months ago and they’ll also see that the long lasting legal struggles with Johnson & Johnson might finally be coming to an end. In fact, DECN say in the report that they’re preparing themselves for the final dismissal of the patent infringement claims filed by the medical giant, and that they’ll then proceed to look for the damages made by the whole proceedings.
Investors have certainly read these parts of the latest report and they’re loving them. The statement came out last week and although there was a brief moment of hesitation at the beginning, the ticker eventually stabilized and began climbing. Six consecutive green sessions later, it reached a close of $0.17 for the first time in almost exactly five months.
So, people have taken a quick look at the report and they seem to like what they see. The Thanksgiving holiday, however, should give them a chance to look through the statement in more detail which probably isn’t such a bad call as it might give them an inside into some interesting details.
The first one is eye-achingly obvious. Despite the impressive revenue jump, DECN‘s financials are far from ideal:
- cash: $543 thousand
- current assets: $2.6 million
- current liabilities: $3.4 million
- quarterly revenues: $112 thousand
- quarterly net loss: $242 thousand
And while the Q3 sales look good, the same can not be said about the revenues logged during the first nine months of 2015. At $292 thousand, they are actually 22% down from the ones recorded during the same period of last year.
If you decide to inspect the report even more closely, your attention might be drawn to the fact that at during the first three quarters of 2015, DECN issued a fair amount of Series E Preferred shares for a variety of reasons at rates ranging from $0.19 to $0.25 per share.
This doesn’t sound too bad. Until, that is, you find out that every single one of the Series E Preferred shares (there were 687,540 of them at the end of September) can be turned into 14 common shares. Basically this means that in the very near future a rather significant amount of common stock might see the light of day at an effective price of less than $0.02 per share.
These are all things you should probably consider carefully before you put your money on the line.
