Positron Corporation (OTC:POSC) stock spiked in volume after the company announced to have secured two important patents defining their key technology.
The confirmed patents are for quantum photodetector and a quantum detector array with binary quantum sensor elements.
Reactive share price action wasn’t very outstanding thought, mostly due to the financial troubles of the company, which prohibit them from effectively using the new patents. Share price swung up, but stayed in the channel and appreciation remains slow and choppy.
The business was not profitable up to this point – in most quarters they even had negative gross profit margins. Cash is also an issue as Positron’s bank account amounted to $888 thousand for the reported period end September 30, 2010, which was not adequate of a capital to cover quarterly losses averaging in millions.
The patents only provide rights to the Positron emission tomography technology the company has already been utilizing, thus little change took place.[BANNER]
The uptick in price is likely to be another insignificant correction in the prevailing strong downtrend. The lowest support level, from nearly a year ago, around 3 cents provides for a possible 53% drop. Nearest resistance points are currently at 5 cents and possibly at 50 days moving average, which is currently at 5.4 cents.
Since the company no longer retains a secure cash position, their balance sheet might quickly get leveraged if POSC borrows and burns money through losses. The current share price also gives this business a market capitalization on over 36% million. While theoretically viable in the context of their technology’s potential, the financial background has no merit for such a high valuation.
