Intelligent Highway Solutions Inc (OTCMKTS:IHSI) Puts its Foot Down
If you read through Intelligent Highway Solutions Inc (OTCMKTS:IHSI)’s latest 10-Q, you’ll be left with the impression that the company is trying to make a living out of a piece of state-of-the-art technology that enables vehicles, road signs, and traffic lights to communicate wirelessly in an attempt to make the experience of traveling safer and a whole lot more enjoyable. If you go to the company website, you’ll see that IHSI also wants to help you grow healthy yields of cannabis with its lighting solutions.
In reality, IHSI has been generating its revenues from something a whole lot less exciting – installing temperature control sensors in an office building in Alameda, California. By the looks of things, investors reckon that the business is going really well. Yesterday, in a matter of six and a half hours, they traded more than $337 thousand worth of shares and thanks to the buying pressure they exerted, the stock managed to almost double its value. It’s currently sitting at a hair under $0.005 per share.
The reason for the hectic trading is a press release which talks about a $1 million purchase order from Honeywell International Inc. (NYSE:HON). The revenues in the next quarterly report should be decent enough and hopefully, Honeywell’s purchase order will also help IHSI patch up the balance sheet a little bit because at the end of Q1, things weren’t exactly stellar. Here’s a summary of all the important figures:
- cash: $37,832
- current assets: $303,340
- current liabilities: $2,228,602
- quarterly revenues: $183,274
- quarterly net loss: $438,598
The results for Q2 should be available in a few weeks’ time and everyone is keeping their fingers crossed that they will be good. While we’re waiting for them, we should probably point out that the press release talks about the completion of the work on the purchase order and it doesn’t really say anything about a new one being put in place. We read in the 10-Q that 100% of the revenues come from Honeywell contracts at the moment which means that if there are no new ones in place, the company’s future could start to look shaky. And that’s a bit of a worry because the sales figure isn’t the only thing in IHSI‘s financial statement that’s growing.
Back in May, when the O/S count was sitting at just over 50 million, the management team upped the number of authorized shares from 100 million to 500 million. This should have served as a hint for the upcoming dilution which has almost certainly occurred now. Yesterday, in a matter of just six and a half hours, investors traded more than 58 million shares, or about 7 million more than the total O/S count as reported a couple of months ago. Wonder who got the newly printed stock?
Unfortunately, we can’t give you an answer. What we can tell you, however, is that at the end of Q1, there was about $289 thousand worth of principal and interest on some notes. All of those notes are convertible into stock at discounts that range from 35% to 52%.
Awesome Penny Stocks won’t tell you that. Then again, that’s not surprising. They have 100 thousand shares bought at just over $0.006 to liquidate within “the next 72 hours”. This should give you an idea of how much trust they have in IHSI.
