Quantum Materials Corp (OTCMKTS:QTMM) Bounces Despite Underwhelming Financials
If you read through Quantum Materials Corp (OTCMKTS:QTMM)’s older press releases, you’ll be left with the impression that the management team aren’t very careful about what they’re saying in their announcements. Take a press release from June 2014, as an example.
It says that QTMM has shipped 20 grams of quantum dots to a major Asian company, the name of which remains undisclosed. Nobody said how much money the shipment is about to bring, but people were expecting to see some movement in the revenue section of the financial statement. Apparently, however, QTMM‘s clever dots got lost along the way to Asia because, as we’ll establish in a minute, the company has yet to log its first dime in revenue. All this despite the fact that in January 2015, they tried to convince us that more than two metric tons of the stuff is expected to come off the production line before the end of Q2.
It still looks like QTMM‘s quantum dots are so ahead of their time, that nobody seems to be interested in them. But is this really the case?
Well, in September, they told us that they have executed a funded development agreement with a leading optical film manufacturer. In what is now a QTMM tradition, the name of their new partner was not disclosed in the press release, but they did finish the announcement with the following sentence: “For further information on this agreement, please see the 8-K filed today with the Securities and Exchange Commission”. Needless to say, we were quite eager to open the 8-K in question and once we did, we found out that the name of the mysterious optical film manufacturer is Nitto Denko Corporation who, curiously enough, forgot to issue a press release of their own about their new partnership with QTMM. Apart from that, the 8-K contains absolutely no additional information on the contract.
Some of the facts listed above could suggest that the management team need to step up their game when it comes to press releases, but it would appear that investors aren’t bothered about this at all. Yesterday, they pushed QTMM 10% up to a close almost $0.16 and they traded around 860 thousand shares which resulted in a dollar volume of about $126 thousand.
The reason for the spike is not immediately obvious, but once you take a closer look, you’ll see that it came on the heels of the 10-Q for the quarter ended September 30 which was published after the closing bell on Friday. Truth be told, however, we’re not quite sure what investors are excited about. The report looks like this:
- cash: $543 thousand
- current assets: $961 thousand
- current liabilities: $1.4 million
- NO revenue since inception
- quarterly net loss: $867 thousand
The underwhelming financials are far from the only problem revealed in the 10-Q. The report says that on June 30, 2014 a grand total of 25 million shares saw the light of day as a conversion of debt at a rate of $0.06 apiece. It also told us that in January, 10 million more were issued at a rate of $0.04 per share. Last but not least, the 10-Q informed us that on September 30, there was a debenture with a principal amount of $500 thousand still outstanding. It is convertible at a fixed price of $0.06 per share.
