Price action activity points to a possible turnaround in Imagin Medical Inc (CNSX:IME) prospects especially on the formation of a double bottom. The stock has taken a huge hit this year depicted by a plunge in share price and market cap. However, the company might as well have served a catalyst poised to fuel a bounce back from current lows.
Imagin Medical Price Analysis
Investors are slowly taking note of the fact that the company has made important strides in the development of its game-changing technology i/Blue Imaging System. Imagin Medical has since embarked on a capital raise drive as it looks to accelerate the development of the technology.
Updates on the development of the i/Blue Imaging System has helped support the stock above the CA$0.1 mark. The CA$0.1mark has since emerged a critical support level from where the stock is trying to bounce back after a steep sell-off.
Above the CA$0.1 mark, the stock faces immediate resistance at the CA$0.2 mark. A breach of the CA$0.2 mark should bring to an end a sell-off wave that had threated to plummet the stock to all-time lows. A breach of the CA$0.1 mark, on the other hand, could give short sellers a reason to continue pushing the stock lower on the continuation of the long-term downtrend.
What Does Imagin Medical Do?
Imagin Medical casts itself as a surgical imaging company focused on the development of a new standard of care for visualizing cancer in minimally invasive surgeries. The company has set sights on bladder cancer.
i/Blue is the company’s proprietary system that it hopes will go a long way in improving physician’s visualization and identification of cancerous cells in patients.
Disappointing Earnings Results
Imagin Medical came under immense pressure on reporting disappointing third quarter financial results. The earnings report indicated that operating expense more than tripled to $1 million. On its defense, the company attributes the increase to an increase in research and development expense as works continue on the development of the proprietary i/Blue imaging system.
Net loss, on the other hand, surged to (-$1.8) million from (-$298, 242) reported a year earlier. Amidst the disappointing earnings report, the company achieved a significant milestone in the quarter. For instance, the company completed an oversubscribed private placement for total gross proceeds of $3.9 million. The company also successfully listed its stock in the OTCQB Venture Market.
iBlue Imaging System Development Milestone
However, the biggest take out from the third quarter report are the favorable results in a 10-subject investigator-sponsored research study. During the quarter, the company’s optoelectronic design firm Optel Inc. completed the Proof of Concept phase of product development. The firm also completed the verification of the performance of two critical modules for the i/Blue Imaging System
“Moving forward, the proceeds from the recent private placement financing provides us with the necessary resources to continue executing our plans to bring this potentially game-changing technology to doctors and their patients. To that end, we anticipate submitting a pre-submission package to the FDA by the end of the third calendar quarter,” said CEO Jim Hutchens.
Solid Balance Sheet
Imagin Medical exited the third quarter with $6 million in cash. The cash balance provides the company the much-needed financial muscle to accelerate the development of the game-changing cancer cells detection system. The balance sheet has since received a boost on the company receiving proceeds of CA$954,854 on the exercise of 9.5 million previously issued share purchase warrants.
The level of expertise in the company’s board of directors has also received a boost on the appointment of Chris Bleck. He joins the company with vast experience in executive leadership that should be of great help on the development of corporate strategy.
“The recent submission of a pre-submission package marked the initiation of the FDA process for Imaging’s i/Blue Imaging System, and Chris’ diverse background working with companies in the medical device, diagnostic, nutrition, and pharmaceutical industries should prove to be a tremendous asset,” ” said Robin A. Atlas, M.D., Chairperson of Imaging’s Board of Directors.
What Next For Imagin Medical
There is no doubt that Imagin Medical has taken a huge hit in 2018. Amidst the underperformance, the company has made impressive strides in the development of its game-changing cancer detection technology blue imaging system. The firm has already made a pre-submission to the FDA attesting to its confidence on the technology.
That said it might be wise to wait for the stock to rise and stabilize above the $0.2 mark to consider it a long-term investment as a bounce-back play.
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Disclosure: We have no position in CNSX:IME and have not been compensated for this article.