Brainstorm Cell Therapeutics (NASDAQ: BCLI) continues to gain momentum with a surge of over 125% since its low on October 31st, 2023. Following an unfavourable FDA decision on its ALS treatment, the stock hit an all-time low of $0.13 per share. Nethertheless, the stock experienced a significant rebound today, November 30th, 2023, rising by 26%, without accompanying press releases or SEC filings.

This resurgence prompts us to evaluate the possibilities for yet another company struggling to meet NASDAQ’s minimum bid requirements. A closer examination of recent months reveals intriguing developments that might pique the interest of potential investors. Our findings suggest BCLI holds promising near term prospects that could significantly alter its course.

Background:

BCLI specializes in developing therapies that utilize a patient’s own stem cells to combat severe neurodegenerative ailments like Amyotrophic Lateral Sclerosis (ALS) and progressive Multiple Sclerosis (MS). ALS affects nerve cells in the brain and spinal cord, while MS affects the central nervous system, causing problems with vision, balance, and muscle control.

The company holds exclusive global rights for the clinical advancement and commercialization of the NurOwn® technology platform, enabling the production of autologous MSC-NTF cells. These cells have received significant recognition and were awarded Orphan Drug designation by both the FDA and the European Medicines Agency (EMA).

Autologous MSC-NTF cells:

The way Autologous MSC-NTF cells work is very interesting. They’re a specific cell type obtained from an individual’s mesenchymal stem cells (MSCs). These cells are then genetically altered to produce neurotrophic factors (NTFs), which are designed to support and stimulate the growth and survival of nerve cells within the nervous system.

BrainStorm has conducted a Phase 3 clinical trial (NCT03280056) investigating the safety and effectiveness of multiple doses of autologous MSC-NTF cells for ALS. This trial received support from the California Institute for Regenerative Medicine, the ALS Association, and I AM ALS. Additionally, the company completed a Phase 2 open-label multicenter trial (NCT03799718) for progressive MS using these cells, backed by a grant from the National MS Society (NMSS).

Back to Square One:

Unfortunately for BCLI, 17 FDA advisory panel members voted that the data presented for their Phase 3 clinical trial for ALS did not demonstrate substantial evidence of the effectiveness of NurOwn for the treatment of mild-to-moderate ALS. There was simply only one member who voted in favour and another member that abstained from voting entirely.

Predictably, this resulted in a substantial downturn in the company’s share price, causing BCLI to plummet 87% below NASDAQ’s minimum bid compliance threshold of $1.00.

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Is it Over?:

To those not well-versed in this matter, it might appear as if BCLI is forced to throw in the towel and start everything from scratch, but the reality is actually quite different.

When a drug fails in clinical trials, the pharmaceutical company or researchers typically reassess the data to understand why the drug failed.

They might conduct further analysis to determine if there were unforeseen side effects, issues with the study design, or if the drug simply didn’t show the desired effectiveness. They’ll work to make adjustments, refine the drug’s formulation, or in some cases, explore other alternatives by re-designing new clinical trials to evaluate the drug’s safety & efficacy for a different condition.

If none of those efforts yield a positive outcome, it’s typical to halt further development of that specific drug.

Regardless of the FDA’s decision, Co-CEO Lindborg mentioned, “We firmly believe that the data for NurOwn presented today provide a compelling case for approval, with clinical evidence in those with less advanced disease supported by strong and consistent biomarker data that are predictive of clinical response,”

Unfortunately for Lindborg, the decision does not rest with her. A panelist from the FDA, Lisa Lee, expressed, “Providing false hope can be ethically problematic and false hope is provided when the probability of a positive outcome is overestimated. And I think that seems to be the case here.”

After the devastating press release on September 27th, 2023, most of the retail crowd was on board with the FDA, mentioning it was time for BCLI to pack up, and go home – especially after seeing these comments from the FDA.

What Happened:

Amid FDA skepticism and investor uncertainties, BCLI took decisive action, securing a chance for a new phase 3 trial to showcase the effectiveness and safety of their NurOwn® technology for ALS treatment.

On October 24th, 2023, BCLI issued a press release affirming their conviction in the compelling data and expressing their intent to further substantiate it to the FDA.

More specifically, this was a “Strategic realignment” designed to:

• Support the company plans to conduct a double-blind, placebo-controlled Phase 3b U.S. clinical trial for NurOwn in ALS with an open-label extension and
• Continue to publish data from NurOwn’s Phase 3 clinical trial on biomarkers, long-term safety, survival, and the Expanded Access Program, providing transparency around NurOwn data and progressing ALS drug development.

Big Release:

Then on November 20th, 2023, BCLI issued another press release, stating that the FDA granted them an in person meeting to discuss the regulatory path forward for NurOwn® in ALS.

Within’ the last month or so, it appears the market is HIGHLY anticipating the outcome of this meeting, given it is now scheduled to take place on December 6, 2023.  

This meeting allows BCLI to have a Special Protocol Assessment (SPA) with the FDA to agree on the overall protocol design for a confirmatory Phase 3 trial in ALS.

If you aren’t familiar with a SPA, it’s an agreement between a pharmaceutical company and the FDA regarding the design, endpoints, and size of a clinical trial intended to support a New Drug Application (NDA) or Biologics License Application (BLA). This agreement aims to confirm that the trial design, data analysis, and endpoints are acceptable to the FDA for the regulatory approval process.

A favorable result from this meeting could greatly benefit BCLI, paving the way for the actual launch of NurOwn®. This outcome stands in stark contrast to the prior belief, post the September 27th, 2023 news, which led many to assume otherwise.

If the trend remains positive, BCLI could see a significant surge in valuation, given the substantially reduced risk associated with a drug nearing commercial availability.

Conclusion:

Boosting the optimism for December 6th is the heightened enthusiasm among retail investors surrounding the company. Some speculate that the surge might mirror what SNGX experienced today, on November 20th, 2023. With technical day traders and swing traders in the mix, many perceive this as the final opportunity to join the trend before it gains further momentum. It’s crucial to remain vigilant as December 6 approaches rapidly, potentially ushering BCLI into an entirely altered and positive scenario.

We will update you on BCLI when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

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iSun, Inc (NASDAQ: ISUN) has experienced a significant surge of over 88% since November 22nd, 2023, with 12% of that increase observed within the current trading day. Similar to other Nasdaq-listed companies facing minimum bid requirement challenges, iSun has witnessed this remarkable upswing without any corresponding press releases or SEC filings to justify the sudden uptick. Looking further, we aim to uncover the underlying factors propelling this sudden rise by examining the company’s recent material events and financial performance, providing a comprehensive evaluation of what the future might hold for ISUN.

Background:

ISUN’s been in business since 1972, so quite a long while. After 47 years of being private, they decided to go public in June, 2019 and were previously known as The Peck Company.

Following the acquisition of ISUN, the company underwent a name change, becoming the entity known today. They have since taken the lead in integrating influential electrification technologies.

With a longstanding reputation as a reliable service partner for Fortune 500 firms, ISUN has a track record of installing various technologies, including clean rooms, fiber optic cables, flight simulators, and over 600 megawatts of solar systems.

The company offers an extensive array of solar services covering residential, commercial, industrial & municipal, as well as utility-scale projects.

Highlighting the importance of shifting towards clean, renewable solar energy, it’s worth noting that ISUN is committed to seizing profitable growth opportunities by offering solar electric vehicle charging solutions for both grid-tied and battery-backed systems.

Latest Earnings:

Unlike the last few write ups, we’re fortunate to have access to more informative press releases and SEC filings for ISUN. That said, let’s talk about their latest earnings and how the business is currently performing.

Highlights by numbers:

• Q3 2023 revenue of $27.9 million, up 47% from Q322, as continued strong commercial and industrial execution drives growth
• YTD revenue of $70.3 million, up 39% over first nine months of 2022
• Gross profit of $5.4 million, up 50% from Q322
• Gross margin of 19.45%, up 45 basis points from 19.0% in 2022’s third quarter, as benefits from synergies were offset by mix
• Awarded $27.0 million in new solar and EV infrastructure contracts in Q3 2023, with a total of $67.0 million in first nine months of 2023
• Continuing successful execution of growth strategy, leveraging tailwinds

Okay great, both the revenue and profit margins are moving in a positive direction. In this market, let’s be honest, what truly matters is whether this long-standing company can generate profits while tackling the substantial growth potential in renewable solar energy projects.

There’s a few things worth noting from this release, the bigger point being the heavy tailwinds pushing them into record growth this year. Their commercial and industrial division showed impressive growth, achieving a 47% revenue boost and a 45 basis point increase in margins compared to the previous year. Despite challenges due to higher interest rates for residential customers, the team remains focused on seizing opportunities driven by climate policies and growing interest among customers in alternative energy solutions.

On another front, their operating loss in Q323 was ($1.8) million, a $3 million or 64% improvement compared to a loss of ($4.9) million in Q322. The cause for this? Higher revenue and lower operating expenses.

To be frank, the majority of CEOs across various industries anticipate higher productivity with fewer resources, which can be a continual source of high stress for employees actually accomplishing the daunting dask. Nethertheless, ISUN is achieving record growth with ease…

As a final thought on operating income, their YTD loss was ($6.2) million, a $10 million or 62% reduction compared to a loss of ($16.2) million during the same period in 2022.

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Thoughts from the CEO:

“We continue to make substantial progress towards the targets we set for iSun’s performance this year, as we execute on our strategy and fulfill our commitments to investors. We remain confident that our expanded capabilities effectively address the needs of more customers and position us to accelerate our growth in the evolving alternative energy sector. Our continued success in winning significant contracts with existing and new customers reflects the appeal of our platform approach that delivers a suite of services to meet the needs of diverse customers. This year, we are also benefiting from the expertise of our team in executing efficiently on our backlog to address our customers’ needs and leveraging the relationships and partnerships we have established. Now that our country’s energy policy has been established for the next 10 years through the IRA legislation passed in 2022, we expect those factors to help us scale our operations significantly in the next few years, no matter what macroeconomic challenges may persist, and thus enable us to generate steadily higher revenue and reach operating profitability in the years ahead.”

Thoughts from Retail:

Several types of traders on Twitter are actively discussing ISUN, many with tens of thousands of followers. One in particular with a 72.1K following on Twitter, @MoonMarket_, mentions he’s accumulating for potentially larger moves ahead, based on technical trends.

@greatstockpicks and @FrankieBstock, with a combined following of 58.4K, are also actively discussing ISUN. Their sentiments lean positively, indicating that the deeper they dive into the company, the more appealing it appears.

Frankie also highlights, “Wainwright has a .50 target…given the revenue, growth, low offering risk and 161m backlog I could see it going higher but let’s focus on .50 with a stop loss around .12”.

It’s certainly encouraging to witness higher attention from influential sources discussing a stock, but it’s always crucial to conduct your own research and form an independent judgment.

Ultimately, all we can do is hope for the best regarding anyone’s analysis, even reputable analysts. While they are probably more reliable than figures like Cramer, who is often criticized for his inaccuracies concerning small-cap stocks, it’s essential not to take opinions as absolute truths.

Analyst Coverage:

As mentioned, analysts might not always be the most accurate to follow, but it’s usually reassuring when individuals with robust financial backgrounds, widespread industry connections, and expertise provide their insights on a public company.

ISUN is presently under analysis by three different firms: Alliance Global, Roth Capital Partner, and H.C. Wainwright & Co. They have set varying buy recommendations and price targets for the company, with a low, median, and high range of $0.50, $2.00, and $2.75, respectively. That’s a monumental 127.4%, 809.9%, and 1151.1% increase should ISUN meet those expectations.

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What’s Next:

ISUN seems to primarily focus its market updates on financial aspects. Upon reviewing all their 2023 releases, they consistently highlight robust execution and growth, reinforcing the anticipation of total revenue reaching $95-100 million this year, indicating a 24-31% surge compared to 2022.

As mentioned earlier, ISUN currently operates at a loss, and often experiences fluctuating quarters due to the impact of high-value contracts. These contracts can significantly influence the company’s financial results.

Thankfully, ISUN holds a total backlog of $161.8 million as of September 30, 2023, ensuring a stable revenue stream as projects are finalized. The bulk of this backlog, approximately $140.3 million, pertains to commercial and industrial applications, projected to be finished within a span of 10-18 months.

As is common with non-profitable businesses, it’s crucial to stay watchful for potential near-term dilution. Fortunately, ISUN recently secured term sheets for a non-dilutive $8 term loan, providing a reassuring stance for the time being. Should the management maintain this level of execution, achieving profitability may not be far off and would be a substantial milestone.

Regarding Nasdaq’s minimum bid requirement of $1.00, ISUN received an extension until May 2024, aiming to facilitate an organic increase in their stock price without the risk of a reverse split.

Conclusion:

With a long-standing history and a shift towards electrification technologies, ISUN’s dedication to renewable solar energy and diverse services positions it for substantial growth.

The overarching market trend aligns favourably, offering support to their endeavours, while the management team’s restructuring on cost efficiencies bode well for near term profitability. Their recent earnings demonstrated substantial revenue growth, particularly in their commercial and industrial segments where they’ve overcome significant market challenges.

In the realm of undervalued micro-cap stocks listed on the NASDAQ, ISUN emerges as a compelling candidate worth monitoring closely.

We will update you on ISUN when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

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CS Diagnostics Corp. (OTC: FZRO) has seen a remarkable 112% surge in its shares as of the current moment, marking a staggering total gain of 432% since November 15th, 2023. Interestingly, despite this significant increase, the company hasn’t released any press statements and we cannot find any respective SEC filings that could account for such a surge.

The absence of an investor relations section on the company’s website limits the available avenues for gathering insights. Nonetheless, we managed to uncover additional information through online forums among retail investors and a supplemental filing from the OTC markets website, posted from FZRO’s Twitter.

While these sources have provided some background, the lack of formalized information leaves us with relatively little to base our analysis on. Nonetheless, despite its recent nature, the supplementary OTC filing dated November 27th, 2023, could potentially offer a preview of FZRO’s future prospects and the potential trajectories it might pursue.

Background:

On September 4, 2023, CS Diagnostics Corp made a significant acquisition. They purchased the entire CS Protect-Hydrogel, including its tangible product, intellectual property, distribution rights, and patents from the CS Diagnostics Group, a company based in Germany. This hydrogel-based tissue spacer serves a crucial purpose in radiation therapy by creating distance between cancerous cells and healthy tissue. Essentially, it shields healthy tissue from the harmful effects of high doses of radiation.

Hydrogel Spacers:

Currently hydrogel spacers are specifically used in treating prostate cancer. In this case, the spacer helps in moving the rectum away from the prostate, thereby decreasing the damage caused to the rectum during radiation therapy. This hydrogel spacer is injected in liquid form through a thin needle into the area between the cancer cells and healthy tissue. It gradually dissolves within the body after approximately 6 months.

What’s unique about CS Protect-Hydrogel is that it’s a ready-to-use product, sterilely packed and can be directly applied. Moreover, this hydrogel can be beneficially utilized in radiotherapy treatments for a wide array of cancers such as prostate, cervical, esophageal, bladder, and breast cancers.

Competitive landscape:

Good news, there does not appear to be a highly competitive landscape for this technology. FZRO’s main competitor for hydrogel spacers would be Boston Scientific Corporation (NYSE: BSX), currently valued at USD $80 billion. The competitor product SpaceOAR Hydrogel System was developed in 2010 by Augmentix, Inc., which was fully acquired by Boston Scientific Corporation in 2018 for a fixed purchase price of USD $500 million plus a variable purchase price component of USD $100 million upon achievement of certain sales targets.

The competitor product has been further developed, and is currently marketed under the SpaceOAR Vue Hydrogel trademark, and is approved exclusively for use in prostate radiation. The product marketed by BSX consists of three components that are mixed in a predetermined sequence and drawn into a syringe by a trained and skilled person.

It’s important to note that the molecule of the CS Protect-Hydrogel differs significantly from the molecule of the competitor product, and patent infringements are not to be expected.

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Competitive Edge:

According to FZRO, their product is highly differentiated from BSX and comes with several advantages, specifically:

Practical Benefits:

• Effortless application of CS Protect-Hydrogel as it comes pre-prepared, simplifying the process.
• Eliminates any additional work steps.

Hygienic Advantages:

• Immediate application of CS Protect-Hydrogel upon removal from sterile packaging, minimizing the risk of contamination.
• Prevention of contamination from product preparation and assembly.
• Reduction of potential hygienic risk areas within the treatment room.

Medical Benefits:

• Elimination of the risk of incorrect mixture, preventing potential missed patient appointments.
• Expanded application across various cancers (prostate, cervical, esophageal, bladder, and breast), enabling a broader range of treatments.
• Feasibility of hypofractionation, reducing the number of treatment sessions per patient.
• Potential for dose escalation, facilitating acceleration of radiation therapy.

Economic Benefits:

• Reduced personnel costs during treatment by removing the need for assistance in hydrogel mixing.
• Lower room utilization costs per patient due to decreased risks of re-treatment from incorrect mixtures.
• Decreased cleaning expenses due to the ready-to-use nature of the product.
• Minimized lawsuits or insurance claims resulting from incorrectly mixed hydrogels, reducing additional treatment requirements.
• Lower purchase price for clinics compared to competitor products.

With easier handling, lower medical & cost risks, and expanded scope of application, FZRO expects that the respective purchasing departments of clinics (including specialty clinics) and hospitals will quickly adopt and list the CS Protect-Hydrogel in their portfolios.

Market Opportunity:

Apart from the CS Protect-Hydrogel, a competitor product enjoys widespread global use. The CS Diagnostics Group is confident that the CS Protect-Hydrogel could capture around 50% of the market share in the near future. This confidence stems from the aforementioned easier handling, reduced medical and cost risks, and broader range of applications.

The success of the CS Diagnostics Group’s use of CS Protect-Hydrogel relies heavily on how well it enters the market and the share it captures.

In a realistic scenario where it achieves a 50% market share and respective sales prices of EUR $1,100 and USD $1,900 per unit, the economic benefit as the net present value of future cash surpluses as of September 30, 2023 is a monumental EUR $961 million.

For more information on how this was calculated, click here.

Valuation & Audit:

On September 4, 2023, Tom Wrankmore, a reputable German public auditor and valuation firm, conducted an assessment certifying the value of the CS Diagnostics Hydrogel product, all previously mentioned values were taken from Wrankmore’s assessment.

It’s important to remember there’s a number of x factors involved in the valuation of FZRO, and the values calculated could be no where close to accurate if things do not go according to plan.

Considering Wrankmore’s credible expertise and esteemed status, he perceives this scenario as a plausible one. However, the successful execution ultimately falls on the management team.

It’s crucial to delve into the team’s background and track record to gauge the potential outcome accurately. Presently, there’s limited information available about the management team, which isn’t necessarily a surprise, given how recent FZRO was established.

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Acquisition & Approvals:

On September 27, 2023, CS Diagnostics Corp acquired the entire CS Protect-Hydrogel for a cost basis of Five Hundred Million USD. This acquisition was completed through the issuance of 110,000,000 shares of CS Diagnostics Corp Common Stock. Following this transaction, in November 2023, CS Diagnostics Corp submitted its 3rd Quarter Report and Financial Statements, emphasizing the acquisition of the CS Protect-Hydrogel.

This submission aimed to clarify that the company is no longer categorized as a shell company and should not be considered a “Shell Risk.”

At present, the company is actively collaborating with its partners to secure regulatory approval for CS Protect-Hydrogel from key authorities across Europe, North, and South America. This critical step is essential for the product’s recognition and acceptance in medical applications within these regions.

Following successful CE testing and certification in Germany, the process of registration or approval involves a necessary testing procedure. Anticipating the regulatory journey, the CS Diagnostics Group expects a timeframe of 6 to 12 months for approval in the U.S. Additionally, a timeline of 6 to 8 months is foreseen for the testing procedure and registration of CS Protect-Hydrogel in Germany.

Considering the existing market availability of a competitor product used worldwide specifically for prostate irradiation, CS Protect-Hydrogel does not require extensive re-introduction or advertisement for this particular application. However, extensive information dissemination and promotional efforts are crucial for establishing its use in treating other types of cancer.

Conclusion:

Obviously FZRO is still in its early phases, but Wrankmore’s assessment has certainly made it quite attractive. While it’s currently too soon to tell, we can imagine part of FZRO’s exit strategy may consider a bigger player like Boston Scientific Group (NYSE: NSX) buying them out – this all depends on how FZRO progresses and is merely speculation for now.

The recent OTC filing on November 27th, 2023, has caught the eye of many retail investors, sparking interest in the stock. Volume is picking up extremely quickly and we might not see these low levels for long. FZRO’s average trading volume is 4,514 shares and had 179,680 shares traded at the time of writing – a near 40X increase in volume after Wrankmore’s assessment.

Over the next 6 to 8 months, we expect to gain clearer insights into how well the management team can meet Wrankmore’s expectations. Regardless, we strongly advise closely monitoring FZRO during this pivotal period, as developments tend to evolve rapidly.

We will update you on FZRO when more details emerge, subscribe to Microcapdaily to follow along!

Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

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