Imageware Systems Inc (OTCMKTS:IWSY) Stands Out From The Crowd
Imageware Systems Inc (OTCMKTS:IWSY)’s stock has been making quite a move in the recent weeks. The ticker shuffled around the start of May and the total gains since then amount to around 100%. Trading sessions ending in the red like the one we saw yesterday are rather few and far in between, but what we’re most interested in is what caused the sudden movement around the company.
In most cases, especially when we talk about penny stock ventures, similar behavior is shown when there’s either a paid pump, like we saw in the case of Biozoom Inc (OTCBB:BIZM) or, as Jammin Java Corp (OTCMKTS:JAMN) showed us over the last couple of days, because of optimistic news and press releases around the company. IWSY however, seems to be moving under its own steam. Or is it?
Well, one thing is for sure, announcements and press releases are not the ones fueling the ticker’s run. The latest headline to come out of IWSY‘s HQ was the one where the results of the first quarter of 2013 are discussed, and no matter how optimistic people feel about the figures in the 10-Q we doubt that this alone is enough to keep the flame burning for so long. What’s even more interesting, we have yet to intercept an email about them from the usual suspects, the paid pumpers.
That said, we scoured the message boards and from what we understand a pump coming from an entity called Wall Street Daily might be under way. Unfortunately, we can’t say for sure how intense the touting is or if WSD have been paid or not, but what we can do is have a look at IWSY and see if they have what it takes to really make it.
Some things suggest that they do. There are many penny stock ventures, especially ones that get pumped, that come and go like a summer thunderstorm. When the hype is created, everybody is very excited about them but as soon as the interest goes away, the tickers plummet to the double or triple-zero territory.
IWSY are quite different. They were incorporated way back in 1987, for quite a while they were dealing with image technology and face recognition and in the recent years they’ve turned their attention to biometrics, as well. They claim to have a really exciting piece of technology and unlike other small cap ventures they seem to be generating revenues from it. That said, it’s not all good news. Here are the figures as found in their latest 10-Q covering the first three months of 2013:
- cash: $2.2 million
- current assets: $3.2 million
- current liabilities: $3.4 million
- quarterly revenue: $856 thousand
- quarterly net loss: $2.7 million
As you can see the losses are quite substantial, but more worryingly, when you compare the results of Q1 of 2013 with the ones from the same period of 2012, you will see that the revenues have shrunk and we read in the report that they are now putting their hopes on the Biometric Engine that is supposed to bring some cash in during the second half of 2013. We reckon, rightly so.
It’s plain to see that IWSY failed to achieve profitability with their previous products, so the success of the Biometric Engine will play a major role in the company’s future. That’s if all goes according to plan. If it doesn’t and if the losses continue, the ticker might go back down to where it was a couple of months ago, which is why the potential losses from an IWSY investment are worth considering before deciding on what your next move will be.
