Implant Sciences Corp. needs to raise more money to continuing operating over the next year. 

The Wilmington, Mass.-based company makes systems that detective explosives. Implant Science’s products are used in high-threat facilities, such as airports and military installations. The company is the only U.S.-owned company that has product approval from the Transportation Security Administration (TSA), it says in SEC filings.

The company’s auditor raised doubts about Implant Sciences’ ability to continue as a going concern, or without the threat of liquidation, because it may not have enough cash on hand as of June 30 to cover operating expenses for the next year, says the company in a Sept. 30 10-K filing with the U.S. Securities and Exchange Commission.

Implant Sciences acknowledges it needs more capital to fund operations and says that if it does gain access to more cash, it may have to file for bankruptcy.

The company was founded in 1984 as a semiconductor company but divested those operations in 2007 to focus on the security business. It has a plan to grow that includes acquisitions and new equipment, but if its financial condition does not improve, it may be forced to sell assets.

As of Sept. 23, the company owed institutional investor DMRJ Group LLP about $40.6 million on several notes, plus $6.6 million in interest. The notes, after Implant Sciences extended the maturity dates several times, now mature on March 31, 2014. If Implant Sciences is unable to refinance or repay the obligations, DMRJ may seize its assets.

The company’s revenue for the quarter ended June 30 increased 335 percent, to $2.4 million, from $0.6 million for the same quarter the previous year. Net loss for the quarter was $5.5 million, compared with a net loss of $4.4 million for the same quarter the previous year. Implant Sciences says the increase in the loss is due primarily to $1.6 million in stock-based compensation for directors and officers. The company also sustained increased losses due to increased operating expenses and interest on its loans.

Despite shaky financial performance, the company says it completed a number of milestones in the past year. The company has an additional security product being tested by the Transportation Security Laboratory, the testing body of the TSA.

Implant Sciences also says it has increased sales for approved products, which it sells to a U.S. government agency, as well as to groups in Japan, Africa, Asia Europe and the Middle East. The company says it is working to further penetrate the U.S. market, as the majority of its sales are overseas.

For last week’s edition of Turnaround Tuesday, see “LDK Solar Reaches Forbearance Agreement.”

For more struggling companies, see Mergers & Acquisitions’ Distressed Company Watch List.

Restructuring