Flexpoint Sensor Systems (OTC:FLXT) has been advancing up these days. Yesterday, the stock soared the next 8% on the market and attracted investors. However, this time the reason for the gain was obvious – news, supported by promotions.
According to the records, yesterday FLXT was promoted by Hero Stocks with no third party involved. The campaign has certainly pumped up the stock price additionally and FLXT managed to hold the climb till the end of the day. Now the question is, what will be its next move?
Looks like the up move has started on April 26 when Flexpoint reported that they have received a follow-up order to supply their patented bi-directional Bend Sensors for use in the telecommunications industry. The announcement stated that the order was made from a client that FLXT has been dealing with on a recurring basis and despite the fact that orders were currently for a small number of sensors, they had the potential for increasing significantly.
Encouraged by the optimistic news, traders got active and the stock grabbed the gain at once. Now it is doubled supported by promotions, meant to push FLXT higher. Anyway, the results should be seen shortly.
Flexpoint Sensor Systems, Inc. is a development-stage company engaged in designing, engineering and manufacturing bend sensor technology and equipment. This month the company filed its annual results as another effort to inspire investors. However, the report looks quite contradictory.[BANNER]
The company has registered more assets than liabilities on its balance sheet, though the 10-K contains huge amount of risk factors related to the existence of FLXT. The management states that Flexpoint has had a history of losses and may never become profitable. Besides, the company is currently unable to fund its day-to-day operations from revenues and the team doesn’t expect that total revenues in 2011 will be sufficient to support their operations.
Thus, FLXT may be required to rely on further debt financing and further loans from related parties. However, if the company is unable to find such funding it could have a material adverse effect on its ability to continue as a going concern. Moreover, it would be much harder to raise capital with a constantly increasing deficit and only 4 full time employees, 1 part time and 2 sub-contractors, on board.