At PositiveID, Executive Pay Trumps Revenues
PositiveID (PSID) issued 3 million more shares a few days ago, a majority of which went to CEO Scott Silverman and CFO William J. Caragol. The stock grants were made as part of the company's executive incentive plan, but as their value is similar in size to the controversial company's underlying business, it suggests that the real business of PositiveID is printing penny stock certificates for management.
PositiveID is best-known for the VeriChip/VeriMed system, which features an implantable RFID microchip that can link to its web-based Health Link medical records system. The product is the subject of continuous dystopian speculation about whether Americans can be persuaded to carry their medical records in a chip under their skin.
But paranoid Americans may have less to worry about than they think, as an analysis indicates the company transacts far more money in management compensation than it does injecting people with tracking devices. Let's follow the money:
- PositiveID has only made $2.3 million in revenues in the first nine months of this year. It has lost $11.5 million doing so. Last year, its revenues were just $353,000.
- The company's stock is in the toilet, trading at just 55 cents/share. The last thing it should be doing is diluting the price of that stock by adding new shares to the market.
- Nonetheless, on Dec. 3 PositiveID issued 3 million new shares worth about $1.6 million.
- About 1.75 million of those shares went directly to Silverman and Caragol, according to Yahoo's Insider Transactions list. You can see details of those transactions here and here.
- Both Silverman and Caragol received $1.6 million in PSID stock last year, too.
- You'll notice from that list that neither Silverman nor Caragol have sold shares in more than a year. Surely, this is a good sign? Possibly, except that two companies, Blue Moon Energy Partners and R&R Consulting Partners have sold plenty of stock over the same period.
- By amazing coincidence, this SEC filing states that Silverman is a manager of Blue Moon and the "control person" at R&R, and Caragol is also a manager of Blue Moon.
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Image by Flickr user Arlington County, CC.