PositiveID Corp. (OTCMKTS:PSID) Jumps On Zika Announcement
PositiveID Corp. (OTCMKTS:PSID) more than doubled its market cap yesterday, as a direct result of announcing that it has successfully detected the Zika virus on its Firefly Dx polymerase chain reaction.
This is, of course, excellent news, and truth be told, investors were right to be excited that PSID is taking steps in the right direction. Still, does this turn of events really warrant the 113.56% jump it triggered?
It’s hard to be the judge of that. On one hand, this turn of events opens up a whole new world of opportunities for profit for PSID, and once more differentiates it from all the other idle OTC Markets pharmaceutical companies that simply aren’t going anywhere.
Unfortunately, while the recent news is good, there is a good reason why PSID was stuck in triple zero obscurity until this recent developments launched it up the charts again. Put quite simply, the company’s science might have checked out this time, but its other achievements to date fail to impress:
- Cash – $262 thousand
- Total Current Assets – $1.9 million
- Total Current Liabilities – $14.9 million
- Quarterly revenues – $1.6 million
- Quarterly net loss – $3.9 million
True, unlike most other companies in the branch, PSID is making revenues. However, it is also racking tons of losses each quarter and is struggling with crippling debt, no small amount of which is toxic.
That’s a big deal, especially since some of said notes have provisions allowing them to convert at prices as low as “62.5% of the lowest VWAP during the 15 Trading Days immediately prior to the applicable amortization date”, or even “55% of the lowest VWAP during the thirty (30) Trading Days immediately prior to the applicable Conversion Date”.
Suffice it to say that there is a good reason why this company’s market cap was approximately $3 million before it attracted the investors’ attention. Simply put – its share issuance shenanigans have put a lot of stress on investor value, investor trust and confidence. A quick check reveals that mid March 2015, there were 221 million shares of PSID common stock outstanding. Fast forward to one year later, and that number has ballooned all the way to 565 million. Need we say more on the matter?
Long story short – the news about PSID may be good, but a diligent look at its financials reveals that the company’s shortcomings are legion. Investors should note that well, and beware.
