Integral Technologies, Inc. (OTCMKTS:ITKG) Spikes on Record-Breaking Volume

6ITKG.pngThe summer of 2013 was an interesting season for Integral Technologies, Inc. (OTCMKTS:ITKG). On June 25, they announced that they have signed not one, but two contracts. The first one was a licensing agreement with a South Korean company called Hanwha L&C for the marketing of ITKG‘s ElectriPlast in the Far East. The second one was a co-development agreement with Delphi Automotive PLC (NYSE:DLPH) and according to it, the two companies are going to explore the possibilities of using ITKG‘s conductive resin technology in the field of wire insulation.

Although the management team weren’t too keen on giving us a deadline for the start of the revenue generation process, investors seemed extremely excited. The stock experienced some tremendous buying pressure which, in turn, propelled it to a 52-week high of $0.83.

Then, however, the press releases stopped and a rather prolonged and painful slide started. ITKG managed to register one more peak in August when they announced a letter of intent with BASF, but once again, the effects were brief and within a few days, the ticker was back on the downward slope.

In November, they did announce that the partnership with Hanwha is going along nicely and that production should start during the first quarter of 2014, but even so, investors showed a complete lack of interest. In December, ITKG slipped below the $0.30 per share mark and it seemed that there’s nothing that could drag it out of these levels. Even the opening of a new technology center on January 3 failed to spark any sort of significant interest. Yesterday, however, ITKG erupted back to life.

More than 2.4 million shares changed hands meaning that the dollar volume exceeds $816 thousand. More importantly, the ticker jumped up by a whopping 40.78% and closed the day at $0.359. As always, the question on everyone’s mind is: “Will ITKG manage to survive the heights this time?“.

Having in mind the possible reasons for the sudden and violent surge, we’re not so sure. The company hasn’t issued any new press releases over the last three weeks, the latest SEC filing came out more than a month ago, and the only thing that could have drawn investors’ interest towards the ticker is a Seeking Alpha article which came out about an hour after the end of Friday’s session.

Perhaps more worryingly, ITKG isn’t even the main subject. The coverage speaks about a few South Korean conglomerates and the licensing agreement with Hanwha secured Integral Technologies nothing more than a couple of short sentences.

Even so, this appears to be enough to propel the ticker on a 40% run. The hype still seems strong and the majority of users around message boards expect the surge to continue.

The fact of the matter is, however, that at yesterday’s close, ITKG‘s market cap stands at well over $28 million and that seems a bit of a stretch for a company that has the following figures in its latest financial statement:

  • cash: $309 thousand
  • current assets: $340 thousand
  • current liabilities: $3 million
  • no quarterly revenue
  • quarterly net loss: $1.2 million

There are also a few convertible notes that can be turned into common stock at a 58% discount and we reckon that keeping them in mind while making your investment decision might not be a bad call.

5ITKG_logo.jpgUltimately, ITKG‘s business performance and the benefits from the contracts that the company signed a couple of months ago will decide the ticker’s faith. Until then, the stock remains speculative and unpredictable which is why you should be careful to evaluate all the risks before putting any money on the line.

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