I'm encouraging our group to look at Cytosorbents Inc, (CTSO) as a case study for QMC that is relevant at this moment in time. Please accept that this is not an effort to “sell” another stock on this board. I do own CTSO (and of course QTMM) and like its prospects, but dislike bb sales games. Cytosorbents is developing a global market for a blood filtration medical device—which is obviously different than qd business. Nevertheless, as an ambitious small-cap stepping into a very large global market, its recent history bears consideration. Following are some relevant points:
In December 2014 CTSO underwent a 1:25 reverse split in order to uplist from OTC to Nasdaq. The company also shifted from Nevada Corp, to Delaware. The company also reduced authorized shares and reduced preferred share count. The goal was to move to a stock price above $4/share for nasdaq listing.
The CEO Philip Chan, in my opinion, did an excellent job of communicating with shareholders prior, during, and since these steps occurred, outlining very clearly the reasons for the changes, educating shareholders, and requesting shareholder support.
In the two years since, the corporation has performed in line with its promises and provides some models for steps, including tone and language that we might want to request from QMC. (read letter embedded in 2014 8-K filling linked below)
In 2015, the year after uplisting/rs, CTSO was included in the Russell index. The company also gained access to supportive, NON-DILUTIVE capital with Bridge bank, things that would not have occurred without uplisting. (See press release linked below.)
Regarding CTSO stock price following uplisting/rs: all shareholder value was of course preserved during rs. Price rose strongly in following months more than doubling. The company then had two relatively minor setbacks: a fast-track denial with the FDA for their medical device in the US.—putting it back on its original approval track, and an internal decision to readjust European sales force—creating a short-lived setback in sales growth. Price retraced to near where it was immediately post rs. In short, the value of shareholder equity has held solid. Consistent quarterly revenue growth has since occurred. IMO price is currently held back as accumulation occurs—but no sign of destructive, dilutive, spiraling due to rs. CTSO is on upward quarterly growth track (anticipating profitability in less than two years) while growing global business and working through tough US FDA process.
CTSO 2014 8-k w/ CEO letter to shareholder
cytosorbent closes 10million debt financing with Bridge Bank
There are key differences—CTSO had modestly growing sales, key revenue generating partnerships, and grant funding at the time of rs, and a clear growth pathway during uplisting process. QMC is waiting, waiting, waiting, but offering higher impact if/when one or more production contracts materialize. If such contracts appear, then by all means we will want to be ready to play in the big leagues. We will want to find non-dilutive capital asap, build partnerships, and become immediately visible to new levels of investment, and guard against hostile takeover. I’ve pointed at CTSO primarily because it is a model of TRUST (or trust but verify) between shareholder and management during a time of important change and shareholder uncertainty. It is a model of how I would like a corporation/management team to behave.
QMC is at a precarious moment. I’m invested in the idea that shareholders and management CAN collaboratively turn the corner and land a big leaque contract. I’m hopeful we can build trust between shareholder and management. As Jamis has indicated, even very good news will take time to turn into revenue, and will take time to create quarter over quarter results and visibility. We will need financing and further investment, and probably face more dilution no matter what. If we somehow miss the display film market opportunity—the situation radically changes as continued, even accelorated dilution will likely become the only option for survival. I prefer to not think about that. I am very encouraged by the steps QMC has anticipated taking.