It seems tough times are ahead for RS Technologies Inc. (TSE:RS), (PINK:RSSYF). The company experiences serious financial difficulties and is really struggling to survive. Last Friday, it suffered another heavy blow, this time from the Toronto Stock Exchange (TSE) officials.

RS_Technologies_-_Chart.pngAs a matter of fact, the shares of the company have been steadily declining for almost two years. Can you believe that in May 2009 RS was traded at $104 (!) per share? This looks almost unthinkable in comparison with the present price of only $0.92.

Last Friday was another very sad day for RS Technologies. It received a letter from the TSE stating that the company’s common shares will be de-listed from the TSX effective March 15, 2011. It is hard to imagine something worse that could happen to the company, excluding maybe a bankrupt. Currently, RS Technologies seems to be in a knock-down position. Chances for survival are hard to be seen.

In addition, the company has been facing harsh capital problems for some time. The latest financial reports for Q3 of 2010 show severe negative results, such as:

  • The net loss for the quarter was $6.81M. For the nine months ended Sep. 30, 2010, it was $19.4M;
  • The company has been experiencing working capital deficiencies since it resumed direct manufacturing at its Ontario production facility. At the end of September 2010, this deficiency was almost 35M;

As written in the financial statements, “funds from operations will be insufficient to fund existing operations, obligations, and capital expenditures” and “additional capital will be required in the immediate short-term”.

It is obvious that RS Technologies is in need of cash. However, there are several facts that speak in favour of the company, indicating things might change for the better. Last November, RS Technologies completed a financing for gross proceeds totalling $6M. This is certainly some kind of financial relief.

Positive news came from last session’s performance of the shares too. In spite of the announced de-listing, RS went almost 11% up on a huge turnover of 1.3M shares traded. Obviously, the stock will not give up without a fight. Encouraging data come from the mentioned financial reports too. For example, sales for the three months ended Sep. 30, 2010 were $4.4M, an increase of 212% compared to the relevant period in 2009. These are signs that the company has powers to come out of the current knock-down situation.

RS_Technologies_-_Logo.pngMaybe, the most important of all is the question if and when RS Technologies will be listed on the Canadian market again. Unless this happens, to speak about any chances of company’s resurrection is simply useless.