The trending hashtag, #BlackMonday, turned out to be a complete bust within seven minutes of the market open yesterday with virtually every single active trader buying penny stocks or big board stocks, puts or options, making bank to the tune of 100% and more. The OTC Market was on fire with traders who held Calissio Resources Group, Inc. (OTC PINK: CRGP) from Friday banking nearly 200% gains and receiving their cash dividend while those who bought the dip mid-morning seeing over 100% before it was time to order lunch. With free money for those who brought their “A” game to their trading screens, a shift towards medical device maker, Advanced Medical Isotope Corp. (OTC PINK: ADMD), whose shares ran for 6,400% into the first half of 2015, moves into ADMD stock are building with hopes of a repeat performance upon FDA news.
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Advanced Medical Isotope Corp., focused on transitioning to full operations upon receipt of FDA clearance, calls itself a late stage development company engaged in the development of patented brachytherapy cancer product devices for therapeutic applications. Brachytherapy, a market estimated to reach $2 billion by 2016, uses radiation to destroy cancerous tumors by placing a radioactive isotope inside or next to the treatment area and the Company’s Y-90 RadioGel device is one some believe could become a major player in the industry..
Back in December, 2014, Advanced Medical Isotope was declined their request for reclassification as a Class II device and marketing clearance after providing the FDA with a de novo submission for their Y-90 RadioGel device. Even though the FDA informed them that it would continue to remain a Class III device (Premarket Approval), the FDA asked that additional data be generated to evaluate the safety and effectiveness of the Y-90 RadioGel device, providing the Company with the framework for submission of a new direct de novo.
Shares of ADMD stock reacted well off their lows of 0.001 by boosting up interest in a re-submission, raising more capital by way of securities sales, and embarked on a 6 month run worth 6,400% for those holding on and timing the bottom-to-top run. Two days prior to the June 24 update from CEO James C. Katzaroff about the Company’s approach for a re-submission with the FDA, shares of ADMD collapsed below their 0.003 support level to add another zero after the decimal point, plunging to as low as 0.0003.
The reason for the massive drop off still stands to be determined, yet since then, ADMD shares have trended between 0.0008 and 0.0012 for the better part of July and August. A big boost of interest in ADMD shares was stimulated last week when a Form 4 was filed on behalf of Carlton M Caldwell followed by the 10 Q for the 3 months ended June 30, 2015.
Within the Q filing, the first item noticed is that 1,996,934,122 of the 2 billion shares authorized were issued and outstanding as of August 14, 2015. Other items of interest include:
- Cash: $26,231
- Liability for lack of authorized shares: $4,027,656
- Total current liabilities: $15,679,261
- Revenues: $0
With the concern of how Advanced Medical Isotope will be able to move forward, both as a business and as they attempt to become compliant with FDA regulations for their medical device, additional financing of roughly $1.5 million will be needed within the next twelve months for working capital purposes, another $1.5 million roughly in order to retire outstanding debt and past due payables, 1.3 million of which are outstanding convertible promissory notes. Should they receive FDA approval upon their re-submission, an amount between $5 to $10 million has been tabbed for the 12-24 months following it to finance everything needed to get “a modest distribution capability for third party isotopes and equipment” and various other corporate moves one would expect to gain top line numbers.
Those concerns for how they could fund an FDA approval were also hinted towards on page 25 of the recent Q filing:
On June 30, 2015, the Company filed the Certificate of Designations, Preferences, and Rights of the Series A Convertible Preferred Stock (“Certificate of Designations”) with the Delaware Secretary of State, designating 2.5 million shares of the Company’s preferred stock, par value $0.001 per share, as Series A Convertible Preferred Stock (“Series A Preferred”). Each share of Series A Preferred has a liquidation preference of $5.00 per share (“Liquidation Preference”), and, subject to certain limitations set forth in the Certificate of Designations, is convertible either (i) at the option of the holder, into that number of shares of the Company’s common stock, par value $0.001 per share, equal to the Liquidation Preference, divided by $0.005 (the “Conversion Shares”), or (ii) in the event the Company completes an equity or equity-based public offering, registered with the Securities Exchange Commission, resulting in gross proceeds to the Company totaling at least $5.0 million, all issued and outstanding shares of Series A Preferred will automatically convert into Conversion Shares.
So the path has been paved in case $5 million gets raised in advance of what sources familiar with ADMD figure the Y-90 RadioGel device has a 50/50 chance of receiving FDA clearance, odds strong enough to have triggered the recent upsurge in buying. After getting pummeled down to .0003 and understanding that either a) an increase in AS is due to come, or b) a RS has to be done to be able to satisfy all of the outstanding debt, trading the ticker in a timely manner could produce a decent enough fraction of prior gains attained in the first half of the year that make ADMD stock a smart buy.
Find out more about ADMD shares here: $ADMD
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