Implant Sciences Corporation (OTCMKTS:IMSC) Moves Up on TSA Order
Back in September the stock of Implant Sciences Corporation (OTCMKTS:IMSC) reached its 52-week high of $1.82 per share. What followed after that though was a total disaster – for 10 sessions in a row the stock failed to end even a single session in the green and returned to the $1.20 mark. This week IMSC is once again registering some sizable gains but will it manage to keep them?
On Tuesday the company issued a rather important PR in which they announced the signing of an Indefinite Delivery/Indefinite Quantity contract with the U.S. Transportation Security Administration (TSA). Investors had been hoping for this to happen for quite a while and understandably the news sparked unprecedented levels of enthusiasm towards the stock. On that day the record number of 3 million shares got traded. IMSC spiked to an intraday high of $1.52 but closed quite a bit lower at $1.32 for a gain of 12.8%.
It seems that despite the impressive news some investors are still reluctant to put their trust in the company. Indeed, on the very next day IMSC actually corrected by 3%. For the first couple of hours during yesterday’s trading the stock remained flat but around noon another PR was made public. Apparently the TSA has made an initial order of 1170 QS-B220 Desktop Explosive Trace Detectors and ancillary supplies. The market once again reacted immediately and the stock closed 10% higher at $1.41.
As a whole the performance of the ticker is quite hesitant and it needs new press releases in order to keep the momentum going. There are a couple of possible reasons for this. First of all, IMSC’s financials show a couple of glaring weaknesses. The company finished its fiscal year ending June 30 with:
• $391 thousand cash
• $4.4 million total current assets
• $66.5 million total current liabilities
• $8.5 million yearly revenues
• $21 million yearly net loss
The rather unimpressive cash reserves, the massive debt and net loss cannot be overlooked. In addition, at the end of March, 2015, the company will have to repay more than $50 million under its secured borrowings.
IMSC owes around $35 million under secured promissory notes to DMRJ and all of that amount can be turned into common stock. More specifically around $5.3 million can be converted into common shares at a price of just $0.08. In April and September just $328 thousand of that amount was turned into more than 4 million shares.
Around 11 a.m. today Implanted Sciences will hold a conference call about their financial results for the quarter ending September 30. If the announced numbers manage to encourage investors to jump in the stock could climb higher. If that will truly be the case though remains to be seen.
