Implant Sciences Corporation (OTCMKTS:IMSC) Surges Yet Again
Long-term shareholders of Implant Sciences Corporation (OTCMKTS:IMSC) know full well what it’s like to hold a position in a company that is not doing particularly well in terms of financials. Unlike many OTC-listed companies, IMSC have a real product, they have been selling it for some time, and, as we learn from a recent press release, their explosive detectors are even receiving some awards.
The problem is, the company has never been able to keep the costs at bay which has led to financial reports that have sported huge losses and colossal liabilities. Because of this, despite the odd peak sparked by an interesting piece of news, the general direction for the stock price has been South. Yet, the fact that IMSC was managing to stay above $1 per share meant that there were still some people who were convinced that the company is eventually going to make it.
On November 14, however, IMSC issued the 10-Q covering the period ended September 30 and it’s clear from the chart that it proved to be the final straw for a lot of investors. The day after the publishing of the report resulted in around 1.1 million shares changing hands and a price decrease of nearly 12%. The ticker closed the session below the $1 per share mark for the first time in a while and just two days later, it registered a 52-week low of $0.77.
Here’s a quick rundown of the figures that caused the scary crash:
- cash: $182 thousand
- current assets: $3.2 million
- current liabilities: $53 million
- quarterly revenue: $1.1 million
- quarterly net loss: $6 million
It’s clear that there are quite a few things to be worried about. When you compare the figures above with the results of the corresponding period of 2012, you’ll see that IMSC have managed to stabilize their cash positions to some extend, but you’ll also notice that the debt is mounting at a rapid rate. There’s been a 17% decrease in revenues year-over-year and although the net loss has been halved, it was due to a decrease in stock based compensation “partially offset by increased operating expenses”. All in all, there was nothing to soften the blow.
Recovery was proving to be tough for IMSC after November 15’s crash and over the last couple of weeks, it has been fluctuating wildly between $0.80 and $0.90. Yesterday, however, it opened the session at $0.81 and started running from the very beginning. By the end of the day, it had climbed up by around 14% while shifting more than $556 thousand worth of shares. This means that people might be inclined to trust their money with IMSC once again, but what is the reason for this?
Apparently, sales of explosive trace detectors (EDT’s) have been booming (no pun intended) over the last couple of days. First, on Monday, IMSC issued a press release which informed us that they have received an order for $600 thousand worth of EDT’s, another $600 thousand deal was announced on Tuesday, and yesterday, a couple of hours before the opening bell, IMSC told us that they have sold over $1 million worth of detectors in Asia. This means that in less than a week, they have managed to secure around $2.2 million in revenues or about twice as much as the results of the last reported quarter.
Sounds good and it’s pretty clear that investors are reacting but people shouldn’t forget the fact that IMSC has been a revenue-generating entity for quite a while. Despite this, a positive bottom line has so far been elusive. Increased sales should definitely help, but they can not guarantee profitability during the future quarters, especially with the increased operating expenses quoted in the latest report.
Conclusive proof of the benefits (or the lack of such) from the new contracts will be found in the future financial statements. Until then, it’s worth remembering that despite the lack of paid promotions (which is more than can be said about companies like Tiger Oil and Energy Inc (OTCMKTS:TGRO) and Endeavor IP Inc (OTCBB:ENIP)), IMSC has had some pretty terrible and unexpected drops which have caught quite a lot of people off-guard.
