The stock of Imaging3 dropped down again by another 11.76% and closed the market $0.3 for a share on Friday. The selling out volume was also considerable – 3.09 million shares were traded and if that trend continues, the stock is about to enter the oversold area. Thus, for those hoping for a reversal of the downtrend, the strong signals may still be missing.
A website, which profiles stocks of interest and is in deep conflict of interest by trading the promoted stocks itself, has alerted the stock to its subscribers this month, attempting to improve investor awareness, but without much of a success. But considering that similar alerts have been often sent out over the last months, mostly in May, one can imaging that they could previously have had their impact on the stock.
At the beginning of last month the annual meeting of the shareholders was appointed and it will take place this Thursday. Among the most interesting for investors issues to be voted is the increase in the number of shares authorized from 500 million to 750 million. This only confirmed that the company needs to raise additional capital and has no other opportunities to do this but to sell shares of common stock and dilute its shareholders. Moreover, the capital seems to be needed not for the business to grow, but to survive.
During this year’s first quarter, the company had more than 40% less cash than the same period last year, revenues declined by 18% and respectively the net loss increased to more than $430,000. According to the management, there is now less cash, among other things, because debt has been paid out, though the liabilities have decreased only insubstantially. Thus, it seems that Imaging3’s business with the currently marketed medical equipment parts and belonging services is getting even more unprofitable.
The only hope for profitability is obviously the receipt of the FDA approval for the company’s proprietary medical imaging device, the application being filed last year. This, together with capital raising, is what management currently devotes most of its efforts on. Further, Imaging3 has established internal financial control in order to reduce expenses and tries to improve the distribution and marketing channels, though it seems the market does not have the time to wait for these measures to give results.
