Can PositiveID Corp. (OTCMKTS:PSID) Recover?
PositiveID Corp. (OTCMKTS:PSID) has had quite a bit of a tumble in the last few days – but can it head back up the charts in the foreseeable future?
Well, as usual, that depends on what PSID‘s next steps are. If it manages to pull off something to impress investors, it may well recover some lost ground for a while. However, PSID‘s going to have to try real hard to do son, because the factors pulling the ticker down are just so overwhelming.
We are, of course, talking about the company’s tendency towards drowning its own investor value in toxic dilution. Few things can make up for that, especially if said habit is not a thing of the past. As long as the company keeps pumping out notes that convert into cheap shares, its share structure will be in trouble – and PSID doesn’t seem to mind that.
Its latest 8-K hit the web just a couple of days ago and announced that the company has taken on another $624 thousand worth of debt, and this time said debt converts at a rate “equal to the lower of (i) $0.022 per share or (ii) 65 % of the lowest closing bid price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future, for the fifteen prior trading days including the day upon which a Notice of Conversion is received by the Company”.
Yes, that’s right – not only is the company’s debt toxic, but due to the notes’ particular provisions, there is no way for any of the company’s debt to become less potentially harmful to investor value under the current set of circumstances. Indeed, there are provisions in that 8-K for the discount to be increased from 35% to 50%.
Once all of this is taken into consideration, PSID‘s chances for recovery start to appear pretty slim. Naturally, there is the possibility that the ticker may experience a resurgence on a wave of hype, creating opportunities for profitable trading – but that is hardly something that can be relied on. Investors should take that into account and act accordingly.
