InfoSonics Corporation (NASDAQ:IFON) Battles De-Listing

InfoSonics Corporation (NASDAQ:IFON)

InfoSonics Corporation (NASDAQ:IFON)

The Nasdaq Hearings Panel has granted InfoSonics Corporation (NASDAQ:IFON) an extension until October 30, 2017, to ensure its stock trades above the $1 a share trading range or face delisting. The panel came to the conclusion after the company made submissions on how it plans to regain compliance at a meeting held on June 1, 2017.

NASDAQ Delisting Warning

It is still unclear how the provider of wireless handsets tablets and accessories plans to ensure its stock price rises above the $1 a share market. The stock is currently trading at the lower end of its tight trading range of between $0.44 and $0.74 a share. For the company to meet the NASDAQ minimum requirement, it will have to register a new 52-week high.

Investor sentiments around the stock appear to have been dealt a blow with the filling of a wider than expected first quarter net loss. The company has attributed the disappointing results to a challenging quarter manifested in low sales figures.

Earnings Disappointment

For the first three months of the year, the provider of wireless handset solutions says sales dropped by 34% to $3.2 million. The decline, according to the company, was due to a lack of sales in Central and South America as well as an exit from the U.S. market. A decline in sales led to the company’s net loss soaring to (-$1.1) million or (-$0.08) a share, up from (-$903,000) for Q1 2016. Operating expenses in the quarter dropped by 27% to $1.36 million, compared to $1.86 million last year.

“The Chinese New Year fell in the middle of the quarter, which caused delivery delays from our suppliers, in addition to generally soft sales channels that were still clearing promotional inventories from year end. Although operating expenses were down 27% from the prior year, we still sustained a significant loss. In this competitive environment, we are taking actions to further reduce expenses, improve our operating efficiencies and product pricing and refine our product offering,” said CEO, Joseph Ram.

InfoSonics Corporation (NASDAQ:IFON) manufactures mobile handsets and distributes them under the verykool brand. Infosonics concentrates its sales efforts on the developing markets.

InfoSonics Corporation (NASDAQ:IFON) exited the first quarter with total cash of $1.3 million in addition to $9.3 million in net working capital. Amidst the current challenges and slowing sales, the company remains debt free.

InfoSonics Corporation (NASDAQ:IFON) stock was down by 0.90% on Thursday, ending the day at $0.518 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Author: James Marion

James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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