Advanced Cell Technology, Inc. (OTCBB:ACTC) With A New Financial Statement And A Slight Correction

It’s not uncommon to see a small cap venture’s stock move violently up or down when a new report comes out, and the direction, as you might have guessed, is decided by the contents of the new 10-Q or 10-K. Advanced Cell Technology, Inc. (OTCBB:ACTC) is among the few OTCBB companies to have filed their reports for the second quarter of 2013 already and we decided to see how traders reacted to the new figures.

The statement went public on Wednesday and that particular session was pretty uneventful. The trading volume was a bit below the three-month average and the price movement was nothing to talk about. Yesterday, however, the ticker opened below its previous value, stayed there throughout the day and when the closing bell rang, the shares were around 6% cheaper.

The loss is not that dramatic, but the volume (at more than 13 million shares) was way above the normal figures and, naturally enough we had to open the new statement, compare it to the one covering the first three months of 2013 and see if there are too many reasons to be worried. Here’s what we found:

• cash: $5.4 million for Q2 vs $4.1 million for Q1
• current assets: $5.9 million for Q2 vs $4.7 million for Q1
• current liabilities: $15.3 million for Q2 vs $15.4 million for Q1
• revenue: $58 thousand for Q2 vs $87 thousand for Q1
• net loss: $6.6 million for Q2 vs $6.4 million for Q1

You can see that, apart from the increase in assets and the drop in revenues, everything else has remained pretty much the same. Things start to look a little bit shakier when you compare the current figures with the ones from the same period of 2012. Apart from the decrease in liabilities, everything looked much better back then and a particularly worrying sight is the revenues section. The second quarter of 2012 resulted in around $218 thousand in proceeds which means that the decrease year-over-year amounts to no less than 73%. The reasons? A licensing agreement has expired during the period between the two reports and it hasn’t been renewed.

This means one thing – a steady stream of revenues will only come when the ground-breaking stem cell technology gets commercialized. When will that happen? Nobody knows for sure, but don’t expect to see ACTC‘s product in your local chemist any time soon.

A conference call with part of the management team was held on Wednesday and at one point the company CEO, Mr. Gary Rabin was confronted with the question of when can we expect to see the technology available to the public. He explained in details that basically, ACTC are in Stage I of their development. They need to go through Stage II and Stage III before they can finally think about commercialization. And that pretty much sums up what being a shareholder of ACTC is.

Indeed, unlike other small cap life science ventures like Arch Therapeutics Inc (OTCBB:ARTH), ACTC do seem to be really working on getting the stem cell technology on the market and with the strong backing coming in the form of a $35 million credit facility, the chances of a financial colapse are slim. According to Mr. Rabin, the trials currently in progress are also yielding some great results. That sounds good, but it doesn’t mean that they are ready to put the product on the shelves which means that you will need to summon all the patience you have. All in all, ACTC is anything but a quick trade and if you do want to invest in this particular ticker, you need to really trust the people who run it and the technology that they’re developing. Which in Pennyland, is not always that easy, as Xumanii, Inc. f/k/a Medora Corp (OTCMKTS:XUII)’s shareholders can confirm.