Positron Corporation (POSC)

[ED20332]

POSC.OB: Tread lightly
Posted by Patrick On Friday, June 18, 2010 3 comments

They just put out a new press release(here) and it appears Biomedreports.com is going to ride them again. Sounds like the same old story to me. Not much has changed. Just looking at their recent 10-Q makes me curious where all the money is going.


For the quarters ending
Operating expenses: Mar 31, 2010 Mar 31, 2009
Research and development 121 30
Selling and marketing 210 16
General and administrative 3,099 609


The company claims they have 21 employees. Yet somehow, they managed to burn through $3.1 million dollars in a quarter. Clearly, something is out of line and someone doesn't know what they are doing. Their "General and Administrative costs" have increased 500% since March 31, 2009; yet they've only doubled their profits and increased revenues by 27%. Does that make sense to you? Yes, most of this was through stock-based compensation; but who is paying for that? Shareholders. They've had increased G&A costs the past 4 quarters in a row. They've increased by 400%. Where is the explanation for that? I just think they are spending far too much capital paying employees and having nothing to show for it.


Additionally, from the 10-Q, we have more dilution. "During the three months ended March 31, 2010, investors converted 636,860 shares of Series B Preferred Stock into 63,686,000 shares of common stock."


I understand they are transitioning from a development to manufacturing company and getting sales can be tough, especially in this economy. Obviously, this "mysterious partner" could really change their fortunes. I am not going to advertise shorting this company, but if you do find yourself considering to buy, make absolutely certain you have done your research. They could be like the other million OTC stocks and never end up going anywhere or there really could be something there. Right now, POSC.OB is a wild card or lotto play. I would only play with what I am willing to lose. I am not confident in the management and they have yet to prove me wrong. It's sad, since the Attrius really could be useful out there.


It's also important for people to realize what BMR is in the business of doing: pumping. Several recent failures include NBS and NWBO.OB. Ever since the brains behind all of their so-called great picks left (Mike Havrilla), they have yet to deliver. I consider RPC a fluke.

Posted by Patrick at 10:24 AM
Labels: POSC

http://www.chasingthealpha.com/2010/06/poscob-tread-lightly.html