Will PositiveID Corp (OTCMKTS:PSID) Stabilize?

The stock of PositiveID Corp (OTCMKTS:PSID) opened the May 31 session at $0.013 per share. Since then, however, its chart performance has been so abysmal that in less than four weeks it had managed to wipe more than 60% of its value. Yesterday the ticker barely avoided logging in another red close but thanks to a last minute jump it was able to finish the day flat at $0.005. Is this a sign that PSID might be stopping its descent?

Well, all of the extremely serious red flags surrounding the company are still here. Let’s start with the latest financial results reported by PSID. According to the quarterly for the first three months of the year as of March 31, 2016, the company had:

• $262 thousand cash
• $2 million total current assets
• $14.96 million total current liabilities
• $1.66 million revenues
• $3.92 million net loss

It cannot be denied that on a year-over-year basis PSID‘s revenues have grown tremendously but as it turns out that is simply not enough with the reported net loss still being higher than the one from a year ago.

While the balance sheet is enough to raise some valid concerns investors have to be far more worried about the continued dilution of PSID‘s common stock. During the first quarter 54 million shares were issued as a conversion of notes but that still left the company with more than $3.2 million outstanding short-term convertible debt. Not surprisingly the holders of said debt have been rather eager to turn it into shares and as a result between April 1 and May 6 PSID had to issue another 65.9 million shares.

The dilution won’t be coming to an end any time soon with PSID actually taking on more and more convertible debt. Just take a look at the subsequent events section of the report and you will see that by May 6 a total of 11 new convertible notes were sold by the company. Then comes the convertible note from May 17 followed by the two notes totaling $624 thousand that were announced on June 2.

Investors should also remember that back in May the company decided to drastically increase its authorized amount of shares. Apparently having 3.9 billion authorized shares was simply not enough and that is why that number was increased to 9.9 BILLION, with 9.85 billion being common shares. 

In early trading today PSID‘s stock is going down currently trading 8% in the red at $0.0046.