Will PositiveID Corp (OTCMKTS:PSID) Stop Correcting?
So far the stock of PositiveID Corp (OTCMKTS:PSID) has been falling down the chart for five consecutive sessions and it seems that the losses are only getting bigger. Yesterday the company crashed by nearly 10% and closed at $0.0221 on above-average volume of 7.5 million shares.
The financial report PSID filed last Thursday seems to have left investors rather disappointed which, in turn, may leave some you rather puzzled – didn’t PSID announce record revenues? Indeed, PositiveID reported record revenue of $2.7 million for the first nine months of the year with $2.5 million of the sum recorded during the third quarter. As a whole the balance sheet of the company at the end of September looked like this:
• $319 thousand cash
• $358 thousand total current assets
• $8.7 million total current liabilities
• $2.5 million revenue
• $93 thousand net loss
With a massive working capital deficit and a negative bottom line despite the millions in reported revenues PSID fails to inspire much confidence. Especially when, as we told you in our previous article, the drastic increase in revenue was not a result of a significant expansion of the company’s operations. Instead it was due to the fact that PSID reported its deferred revenues from the licensing fee part of the company’s agreement with Boeing signed in 2012. The money was actually received by PSID in three installments taking place in 2012 and 2013.
Investors should also take into account the continued dilution of common stock. At the start of August PSID had around 351 million outstanding shares while as of November 9 that number had surpassed 405 million. Last week’s report informed us that a significant portion of the newly issued shares saw the light of day subsequent to September 30 when $339 thousand worth of convertible notes were turned into 23,155,189 shares. This makes the average price of the shares just $0.0147. PSID also issued an additional convertible note in the principal amount of $312 thousand.
Any trades involving PSID‘s stock should be attempted only after extensive research. Keep in mind that the company is often targeted by paid pumps with the latest wave of email alerts coming just a couple of days ago on November 13.
