The results are far from awesome, but the sweet-talk is first class. There is a 5% revenue increase compared to Q2, but without knowing cost of sales or OpEx, it’s no telling what it is worth. In Q1 OpEx was 34%, in Q2 it was 29% higher than gross profit - creating large revenues without a profit is not that difficult and far from what I call good business.
Forecast for Q4 is hardly reassuring, it will just take around 850k to lift IMMD to 5M+ sales. With other words, management doesn’t expect revenue to pick up substantially. The product doesn’t sell as expected, after dreaming about 10M+ sales in 2016 and 15k trial orders/week for Q1/17, reality says 39648 trial orders in Q1-Q3/16. Wow, what a miss!
Management doesn’t seem to believe in strong revenue growth of its own products and tries to sell other stuff - a hair loss product, apparently without a ß-glucan ingredient. After missing the target for their own products, they are confident that they are marketing experts by now and can sell anything. Right. Very convincing.
Not everything looks bad in the end. Study results are supposed to result in new patents and products in Q4, commercialization is planned with strategic partners - the euphoria over their own direct-to-consumer marketing ‘success’ seems to be limited after all. Uplisting to a senior exchange is postponed for at least a year, but still on the table.
To me it seems the next two quarters will be disappointing, ß-glucans have been studied for applications in wound care and cancer applications already (search for a Norwegian company called Biotec Pharmacon and Sven Rohmann). Success is not guaranteed. As long as IMMD can’t increase revenue without keeping OpEx under control, I’m out. IMMD seems very well priced in a 0.25-0.30 range, with all the uncertainty I expect the stock to hit 0.15-0.20 sooner than later.
AI
