OncoSec Medical Inc (OTCMKTS:ONCS) Surging On

Yesterday OncoSec Medical Inc (OTCMKTS:ONCS) underwent its fourth consecutive positive session and gained 5% on a volume of 928.5 thousand shares. The stock is currently sitting at $0.525.

The most recent news on the company comes from a press release issued yesterday, Nov 3. Several hours before the opening bell, ONCS announced that it will be presenting at three events this month. One of the events will take place today in Frankfurt, Germany. The other two will occur on Nov 13 and Nov 24. This news is the most likely reason behind the 5% surge registered yesterday.
Prior to this release, ONCS issued one on Oct 27 disclosing that it has received a Phase I Small Business Innovation Research grant from the National Institute of Health. The grant will fund the research for the development of “novel electroporation technologies”. The PR ends with the news that “additional Phase II funding of up to $1.0 Million ” may be granted to the company by the SBIR program to “commercialize the technology depending on the outcome of the Phase I studies”.

On Oct 16 Zacks Small Cap Research released a positive article on ONCS. The article came out right before the start of the trading session, and is most likely the culprit behind the 5.13% surge registered that day.

ONCS filed its annual report on Oct 10, and it covers the fiscal year ended July 31. The 10-K reports the following:

  • cash: $37.8 million
  • current assets: $38.3 million
  • current liabilities: $1.3 million
  • no revenue
  • loss from operations: $11.9 million

Keeping in mind that ONCS is a pharmaceutical company with no products on the market yet, the numbers are impressive. Also, unlike most OTC companies, ONCS doesn’t suffer from toxic funding. Since inception the company has used primarily equity financing to replenish its cash supplies. The latest such cash infusion came on June 6 and it brought the company net proceeds of approximately $15 million.

In fact, the 10-K explains that the increased cash amount shown in the report was due to the company receiving $17 million “in cash proceeds from the exercise of warrants previously issued to investors of our equity securities”. It also states that there are still “remaining outstanding warrants” and if the investors choose to exercise them “in full on a cash basis”, ONCS will end up with an aggregate of nearly $15.2 million more to add to their current cash supply. However, shareholders have to keep in mind that these $15.2 additional cash may never be registered as proceeds, as the investors may decide not to exercise them. In any case, with its current cash amount, ONCS can continue its operations for “at least the next 12 months”.

As always, due diligence is advised before deciding whether or not to put money on a stock.

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