Implant Sciences Corporation (OTCMKTS:IMSC) Reverses Its Direction
Between April and September, this year, Implant Sciences Corporation (OTCMKTS:IMSC) managed to sell over 750 of their QS-B220 Desktop Explosives Trace Detectors to airports in eleven European countries. Now the company is receiving follow-on orders announcing on October 21 13 additional QS-B220 devices for Belgium while a PR from yesterday revealed that 16 additional devices will be deployed in Austria. At the end of September IMSC also received a follow-on order from the Incheon International Airport, the largest airport in South Korea.
So, in short, IMSC has been announcing positive developments quite often lately but if you take a look at the chart performance of the company’s stock you might be in for a surprise. From $0.789 the ticker fell to a new record low of $0.42 in just four weeks. Even after yesterday’s gain of 9% the stock is sitting at just $0.48. What could explain the depressing chart performance?
Well, IMSC may be reporting millions in revenues but their financial state still leaves a lot to be desired. The annual report filed on September 30 showed that IMSC finished their fiscal year ended June 30 with:
• $1.98 million cash
• $9.4 million total current assets
• $88.2 million total current liabilities
• $12.9 million annual revenues
• $21.5 million net loss
Compared to the previous fiscal year the generated revenues show an increase of close to 52% but despite the impressive growth the net loss has remained staggering. The same can be said about the enormous liabilities of the company over $80 million of which can be converted into shares. Of particular importance are the $3.18 million promissory note and the $1.9 million in accrued interest that can be turned into shares at just $0.08 per share. At the end of September $245 thousand of the interest was converted into more than 3 million shares.
IMSC have a lot going for them. The European sales and the TSA order for 1170 of the QS-B220 detectors allowed the company to issue a guidance for 2016 of $40 to $45 million. The risks however are also significant – the potential dilution and the millions of extremely underpriced shares could continue to influence the stock negatively. Investors should also keep in mind that some orders, including the one from the TSA, can be cancelled by the customers “without any financial penalty.
