Implant Sciences Corporation (OTCMKTS:IMSC) Bounces Off Three-Year Low
After a short but devastating streak on the charts Implant Sciences Corporation (OTCMKTS:IMSC) finally caught a break. On Friday the stock moved 20% up and closed at $0.56 per share.
IMSC went through quite a bit of a drop in the wake of filing its annual report for the fiscal year ending June 2015. Even though the balance sheet checked a few of the right boxes, the market’s reaction was unambiguous. Here is a brief rundown of the numbers IMSC reported:
- $1.98 million in cash
- $10.3 million in total assets
- $88.2 million in current liabilities
- $12.9 million in annual revenues
- $21.5 million in annual net loss
While the company does churn out a lot more in revenues than most other OTC stocks, and annual revenues are actually growing significantly on a YoY basis, the company will need to significantly rein in its ‘selling, general and administrative’ expenses before it can dream of turning profitable.
The good news is that IMSC has very real products and it’s generating very real sales of those products. So far revenues come primarily from sales outside of the USA, with European airports ordering the company’s detection devices. IMSC does have an order from the US Transport Security Administration for nearly 1200 of its explosive detectors, valued at an estimate of around $40 million, with the company’s explicit clarification that this order “does not necessarily represent actual future shipments” and is can be canceled in the future, with no penalty to the customer.
The bad news is that the latest annual report revealed the conversion of just $245,000 of interest accrued on a convertible note turned into just over 3,000,000 shares on Sep 24, with a conversion price of $0.08 per share – a far cry from the market price of the company. While only a small portion of the company’s significant debt converts at such a massive discount, there is still just under $5 million in outstanding debt that converts at $0.08 per share.
With IMSC having just 75 million outstanding common shares as of mid-September, the possibility of nearly $5 million being converted into shares at $0.06 apiece is something traders should keep in mind.
