For anyone that is active on Twitter, it has been apparent that this month has been an active one for Imagin Medical (CSE: IME). The stock has been moving significantly since its initial news release that was posted on September 26th, 2017. This release contained the announcement of a private placement which was priced at $0.05 per share, with an additional full warrant at a price of $0.10 for 12 months.
The News Releases
This release was followed by a second published the following day, detailing a recent development regarding its clinical approval to test its product on humans. In fact, there have been ten separate news releases distributed by the company since the initial release on September 26th, 2017. Of these ten, a total of six pertained to private placements, or funding related to these placements. Three of the remaining four releases arguably can be considered as fluff articles, likely intended to keep the upward price action on the stock in motion.
Releases such as these provide little value to shareholders. Rather, they tend to be used to bump up the price of a stock as retail investors file in. There are several other instances of similar fluff articles as of late, however it appears to be working. The value of the stock has multiplied three fold since that initial release. Yes, there may be potential with this technology – I’m no expert in the medical device field, and the CEO has a solid track record in this regard. There’s no doubt on managements abilities, they have the track record to prove it. Its the financials that have us a bit curious as to whats going on.
The Financials
Unfortunately, the value to shareholders hasn’t held up as well due to dilution. In the past month, Imagin Medical has diluted itself quite significantly, as can be seen in the table below.
Date
Shares
Options/Warrants
September 26th, 2017 – Initial PP announcement, stock options granted – 1,600,000 @ $0.06
Expire 9/2022
October 4th, 2017 – First tranche of PP 14,658,800 @ $0.05*
14,658,800 @ $0.10
Expire 10/2018
October 13th, 2017 – Second tranche of PP (over allotment) 7,141,200 @ $0.05*
7,141,200 @ $0.10
Expire 10/2018
October 13th, 2017 – Finders warrants –
404,800 @ $0.10
Expire 10/2018
October 26th, 2017 – Funding for communications program 800,000 @ $0.15
800,000 ½ warrant @ $0.25
Expire 10/2018
October 26th, 2017 – Stock options granted – 2,250,000 @ $0.18
Expire 10/2022
Total
22,600,000
26,454,800
*The final news release for this published on October 18th, 2017 indicated that a total of 20,000,000 units were sold in the private placements. However, the figures given in the October 4th, and October 13th, releases do not add up to this figure, nor do the sums equal $1,000,000 as indicated in the release.
This dilution is significant for an organization that as of June 1st, 2017 had a total of just over 50 million shares outstanding, and a total float of 78 million shares. Furthermore, whats unfortunate is that the CSE has yet to update the share structure on the stocks page to reflect these changes. This unintentionally misleads inexperienced retail investors.
The Conclusion
So, what’s the point of all this? Imagin Medical has been on a wild ride as of late. It’s been active in the twittersphere as of late, and the board on Stockhouse has been going nuts.
Investor value has significantly dropped, likely without investors being aware. With the fully diluted shares rocketing from 78.4 million, to that of approximately 127 million, your take in the company has been reduced noticeably. This is an approximation of course, because the numbers don’t add up in the releases. Its difficult to say how many shares are actually outstanding until full financials come out.
The gist of it? Be careful investing your hard earned money. Read releases closely. Do the math. Dive deep.
Information for this article, including all news releases and corporate presentations was sourced from Imagin Medical’s website at http://imaginmedical.com/. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell.
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