Implant Sciences Corp (OTCMKTS:IMSC) Climbing Up The Charts

Source: Implant Sciences Corp

Shares of Implant Sciences Corp (OTCMKTS:IMSC) look to have bottomed and put in a low in early March. After posting strong second quarter results, investors are getting excited about the company's growing shipments of explosives trace detectors. It seems IMSC has turned the corner and a strong rebound is at hand.

Implant Sciences describes itself as "a leader in developing and manufacturing advanced detection capabilities to counter and eliminate the ever-evolving threats from explosives and drugs. The company's team of dedicated trace detection experts has developed proprietary technologies used in its commercial products, thousands of which have been sold across more than 70 countries worldwide. The company's ETDs have received approvals and certifications from several international regulatory agencies including the TSA in the U.S., ECAC in Europe, CAAC and the Ministry of Public Safety in China, Russia FSB, STAC in France, and the German Ministry of the Interior. It has also received the 2015 GSN Airport/Seaport/Border Security Award for Best Security Checkpoint."

Revenues for the three months ended December 31, 2015 increased 380.7%, to $10.3 million, from $2.1 million for the comparable prior year period. The net loss for the three months ended December 31, 2015 was $3.3 million as compared with a net loss of $6.2 million for the comparable prior year period, a decrease of $2.9 million. The increase in revenue is due primarily to a 818.0% increase in the number of QS-B220 desktop units sold in the three months ended December 31, 2015, due to the initial shipments under our delivery order with the U.S. Transportation Security Administration, increased shipments to European airports and increased shipments to Asia, Africa and South America in the current three month period, offset partially by a 29.2% decrease in the average unit sales prices, which resulted in a 549.8% increase in QS-B220 revenues.

QS-H150 handheld units sold in the three months ended December 31, 2015, increased 121.4 %, compared to the prior period, due to increased shipments to Asia and Africa, which is partially offset by a 3.2% decrease in the average unit sales prices, which resulted in a 114.3% increase in QS-H150 revenues. Sales of parts and supplies increased 483.8% in the three months ended December 31, 2015, due primarily to increased sales of consumables and other supplies that shipped with the QS-B220 desktop units in the current three month period.Gross margin for the three months ended December 31, 2015 was $3,853,000 or 37.4% of revenues as compared with $364,000 or 17.0% of revenues for the comparable prior year period. The increase in gross margin as a percent of revenues is primarily due to increased manufacturing overhead absorption, due to increased QS-B220 unit volume and lower material costs for the QS-B220 due to volume purchasing price reductions, partially offset by a decrease in the average unit sales price on sales of our QS-B220 units and our QS-H150 units.In February, IMSC announced that it had shipped $1.3 million of its QS-B220 desktop explosives and drugs trace detectors and QS-H150 handheld explosives trace detectors to customers worldwide since the beginning of 2016. The previously unannounced shipments were made over the past six weeks are scheduled to be deployed for applications such as aviation security, critical infrastructure protection, and cargo security. IMSC says that "the QS-B220 uses Ion Mobility Spectrometry (IMS) to rapidly detect and identify trace amounts of a wide variety of military, commercial, and homemade explosives. Featuring a radioactive material-free design, push-button maintenance and diagnostics, and a patented inCal internal automatic calibration system, the QS-B220 brings new levels of performance and convenience to desktop trace detection users with unsurpassed ease of use."

Currently trading with a market cap of $43 million, IMSC has recently extended secured credit arrangements with DMRJ Group, LLC ("DMRJ") and Montsant Partners LLC ("Montsant") and the group of investors represented by BAM Administrative Services, LLC ("BAM"). Under the revised secured credit arrangements with DMRJ and Montsant, the maturity date of the indebtedness owed to DMRJ under the non-convertible debt was extended from March 31, 2016 to June 30, 2016 and the maturity date of the indebtedness owed to DMRJ and Montsant under the convertible notes (the "Convertible Debt") was extended from March 31 to December 30, 2016.

Keep in mind that as of March 31, 2016, Implant Sciences had 79,025,620 shares of common stock outstanding, and if such Convertible Debt was fully converted Implant Sciences would have 177,326,606 shares outstanding, with the holders of the Convertible Debt holding approximately 55.4% of the total number of shares of common stock. We will be updating Insider Financial as soon as we know more. For continuing coverage on IMSC, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: We have no position in IMSC and have not been compensated for this article.