A Mixed Bag for Investors at IDO Security
IDO Security (IDOI) has a technology that many airport visitors dream of seeing when flying, but the company’s latest quarter could be a cause for a pause until next quarter’s financials are released.
IDO Security [[IDOI.OB]], which develops a step-in shoe scanner for use at security checkpoints, has seen its shares rally a staggering 1,000% since June, but long-term investors may want to hold off on acquiring a large stake until profits start materializing. However, the company’s MagShoe device is certainly gaining attention for its security and convenience.
The MagShoe is designed to be the “missing piece” in security checkpoints at everywhere from airports to prisons. The scanner enables visitors to simply step-through the device for a complete security scan, instead of taking off shoes and putting them through a scanner. The increased security and increased convenience could prove a compelling value proposition.
Last quarter, IDO Security earned revenues of $20,093, with gross margins of 19.1%, but fixed expenses led to a $1.1 million net loss. Meanwhile, the company’s balance sheet also remains perilous with a current ratio of 0.05, just $129,015 in cash and cash equivalents, and a doubling in its share count to 69.6 million shares, according to its latest 10-Q filing with the SEC.
Despite the troubled outlook, IDO Security does have a few positive things taking place. The company reported a series of high-profile sales of its MagShoe device since its last quarterly filing, while at least one director purchased 21.25 million shares between February and June at prices ranging from $0.0006 and $0.0014 in cash.
In the end, IDO Security has an interesting product that is ramping up; however, prudent investors may want to wait for next quarter’s financials before investing. Specifically, investors should look for a narrowed net loss on higher revenues with fewer new shares issued and an improvement in capitalization on the balance sheet.
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