BSD Medical Corp. (NASDAQ:BSDM) Flies Up on Milestone Improvement
19 Aug 2010

Yesterday’s spectacular three digit percentage increase of BSD Medical Corp. (NASDAQ:BSDM) stock was not a surprise. The company filed to have received FDA approval for its major product, which immediately made investors see the revenues boosted up and forget about the high dilution risks.

Entering the market with a large gap up, BSMD closed at $2.97, representing an 162.83% increase from its previous close. A total of 27.7 million shares were traded, an absolute record not only for the past 52 weeks, but also for the past three years. The shares got oversold, as the huge for the company’s development event from yesterday would suggest.

Yesterday, BSD Medical announced that the FDA has allowed the commercial sale in the USA of the company’s MTX-180 microwave ablation system. That device represents the major part of BSD’s business plan and the major source of future increases in the revenues. The MTX-180 is a compact mobile system that delivers precisely microwave energy to ablate soft tissue. The product is designed for the treatment of tumors and can be issued by both by both surgeons and interventional radiologists.

Facing a market potential of $2 billion and revenues expected to boost up as soon as the company starts to sell the product, investors were more than willing to forgive BSD’ the recent dilutive capital raising activities.

In February BSDM strengthened its cash position through selling 1.18 million shares of common stock to certain institutional investors. The deal also included the sale of warrants to purchase a total of another 882,354 shares of the company at $2.04 for a share. After that, in May, in a direct public offering, BSD sold again to some institutional investors another 1.6 million shares and warrants to purchase 1.2 million shares at a price of $1.94 per share. The total gross proceeds from both offerings were $4.5 million and all the warrants become exercisable six months after the closing date of the respective offering.

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