Irvine Sensors Corp. (OTC:IRSN) No Value Gain on the Intensive Trading
17 Mar 2011

Strange at first sight, the explosive number of shares that Irvine Sensors Corp. (OTC:IRSN) stock trades these days were unable to raise its share price up. That has its reasons, though. On Monday the company announced the issuance of new shares of common stock and indicated even more possible dilution through a change in the articles of incorporation.

IRSN closed the last trading session again at $0.15 for a share and with no change in the closing price from the previous close. On the intraday chart it looks like the 1.4 million share turnover was realized mostly in one transaction. Thus, it is not a wonder that the market looked absolutely consolidated on the lower price. The stock has by now lost more than half of its value since the end of January, and as it seems the further direction is more likely down than up at this point.

The latest news from the company from this Monday could not change investor attitude. The company filed with the SEC that an accredited investor that held preferred stock of the company has decided to convert that stock into shares of common stock. Thus, IRSN has issued to that investor an aggregate amount of 1.4 million common shares in consideration for preferred stock with stated value of $98,000. Also a few days ago, the company granted its employees options to purchase another 23.75 million shares. At the same time, IRSN stockholders approved an increase in the authorized capital from 150 million to 500 million shares.

For IRSN shareholders that means potential dilution, the expectation of which probably does not help appreciate the company’s increasing sales. The debts are also overwhelming, being twice the total assets of Irvine Sensors. Thus, it is clear that the business needs a fundamental change if it is to get profitable soon and create value for its shareholders.

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