Let me correct myself. They won't be out of cash in Sept, they'll be out of cash in June.
After this quarter's results, probability of warrant exercise is highly questionable unless of course the warrant holdrs start shorting the stock tomorrow morning to lock in a profit, at which point there will be a ceiling over the stock price for the forseeable future.
I'd love to be an optimist on the near term stock price, but reality says we're headind down for the next 6 months.....
This quarter results were a serious bust. Zilch revenue in spite of all the hype about new order wins. They are all small order niche products and in total only equal $15 mill revenue over 3 years. (Do you hink they stacked up the press releases ahead of earnings to juice the stock price????)
No revenue from any of these orders until the Sept qtr and revenue will ramp slowly per the conf call. Because volumes are low, anything they sell in the next 9-18 mo will be at a loss. In other words.... they'll be burning lots more cash until at least 2017.
At this point they are pretty much out of money, only $4million left at end of Mar qtr and per the conf call they are burning about $4.2 million per quarter. And they said they need to start adding production personnel in anticipation of future sales, read that as more espenses!!!
So we know they will be broke by September, if not sooner. They need cash and need it NOW!
Last time they raised cash in November of last year they priced the offering 45% below the closing stock price of the prior day AND they added in the highly dillutive warrant kicker. We all know what the stock did... it went in the toilet for 3 months. The stock is up 500% in the last three months so although the discount might not be quite as bad, I expect any stock offering to be price well in the hole.
They have the outstanding S-3 shelf stock offering filed with the SEC so they can issue stock at any moment.
My take...... set and wait until 5-10 days after the secondary stock offering. The offering price will be seriously in the hole and the stock will languish for at least 5 days as the market makers torture small investors after which we can hopefully start to climb back.