Implant Sciences Corporation (OTCMKTS:IMSC) Bounces
On June 9 Implant Sciences Corporation (OTCMKTS:IMSC) decided to remind investors about the tremendous progress of their operations. Indeed, the PR issued by the company stated that over the past 12 months its QS-B220 desktop explosives and drugs trace detector has been deployed to over 160 airports with over 1000 units being sold to European airports. Back in December 2015 IMSC began shipping units under its 1,170 unit order from the US Transportation Security Administration while in January 2016 they received a 122 unit order from the Canadian Air Transport Security Authority.
As we said, IMSC have been moving forward with their business plans at a rapid pace but the press release failed to reinvigorate investors. In fact, just days after it the stock of the company began losing positions, falling from an opening price of 69 cents on June 13 all the way down to a close at 48 cents on June 16. After such a rapid depreciation the stock did bounce on Friday regaining 21% of its value and climbing back up to $0.59 but will the momentum survive the weekend? Especially when you take into account the serious red flags that are still hanging over IMSC.
Opening the financial report covering the quarter ended March 31, 2016, makes it clear that IMSC is far from the typical pennystock. The company finished the period with:
• $280 thousand cash
• $14.7 million total current assets
• $99.6 million total current liabilities
• $10.75 million revenues
• $4.1 million net loss
Compared to the same quarter a year ago the revenues generated by the company show a massive increase – from around $3.3 million to nearly $11 million. The net loss has also been improved and from over $5.7 million it has decreased to a little over $4 million. Unfortunately, the balance sheet also shows that IMSC have extremely limited cash reserves and a staggering amount of outstanding debt.
Almost all of the financial obligations of the company had a maturity date of March 31, 2016, but IMSC were able to negotiate an extension. The problem is that while the maturity date of some of the company’s outstanding secured promissory convertible notes was moved to December 30, 2016, the maturity of the rest of the debt was pushed back by just a couple of months to June 30. This means that in 10 days IMSC might have to repay a substantial part of its debt.
Trading IMSC‘s stock requires caution and should be preceded by extensive research. Early in the session today the ticker is going down, currently sitting 4.7% in the red at $0.558.
