6.31% of its price, while its traded volume hit $5 million shares. Looks like traders are really disappointed by Imaging3 and started selling off their shares.Most probably, there are a few reasons for the continuous fall. The first one is that IMGG has not released any official news on its business, apart from a TV episode on the company’s FDA approval strategy and a demonstration of the Dominion.
The second reason for the downtrend appear to be some of the latest actions by Imaging3. A week ago, the company has filed a prospectus considering its common stock, which looks quite disturbing.
In the document, IMGG has included the risk factors of an investment in the company, as well as detailed information on its shares of common stock. According to the prospectus, investing in the common stock of IMGG involves a high degree of risk, which definitely might have scared investors. Some of the risk factors mentioned are volatile stock, possible dilusion, decline of the stock price, unpaid dividends and not obtaining FDA approvals.[BANNER]
The third, but the most important reason for the losses, turns out to be the annual report of Imaging3, which is absolutely disappointing. According to the 10-K, the company has incurred substantial operating deficits since inception and the losses are expected to continue. Besides, IMGG has not completed its proprietary imaging technology and FDA may require additional trials for approval, which the company cannot afford.
Due to the huge losses, impressive liabilities and limited working capital, the 2010 annual report of Imaging3 contains a “Going Concern Qualification”, which places the company’s continuation under a substantial doubt. The management intends to look for additional capital or debt financing for the operations, however, this may lead to dilution for the stockholders and even to greater losses in future.
