Original article by @Goldfinger

I tend to stick with what I know very well -Mining and junior mining is my bread and butter, and it usually takes a very special situation to interest me in another sector. The biotech and pharma sectors are two areas that I have been especially leery of historically, simply because I don’t feel that I don’t have much of an edge in these areas. Moreover, the volatility can make junior mining look tame by comparison.

I recently came across a nano-cap Canadian-listed, public company, that is working on commercializing a revolutionary CT (computed tomography) technology for breast cancer detection. This company grabbed my attention, and even I was able to understand the size of this opportunity and the upside potential for a C$7 million market cap company with one of the tightest trading floats I’ve seen in my life (23.82 million shares outstanding in total with more than half of those shares held by insiders and close associates).

This company not only has a tiny market cap and a tight share structure, but it is advancing a cutting edge technology in the multi-billion dollar breast imaging space. The breast imaging market is expected to reach $4.14 billion by 2021, at a compound annual growth rate (CAGR) of 8.5% from 2016 to 2021, and $7.3 billion by 2024. Several factors that are currently contributing to market growth include an aging population, increased obesity rates, rising health care costs and an increase in spending.

The population in developed economies displays aging and breast cancer as a growing concern for women, with a rate of 12% of women in the US and Canada expected to endure breast cancer at some point in their lives. The breast imaging market will continue to grow at a rapid pace as the population grows and women become more aware of the risks of breast cancer.

The following chart shows the market for breast ultrasound alone, which is used as a diagnostic tool for breast cancer.

Izotropic Corporation (CSE:IZO, OTC: IZOZF, FRA:1R3) has developed a revolutionary breast CT imaging system that uses 360 degree 3-D technology to capture a high resolution, true 3-D, image of the breasts without any breast compression occurring during the process.

Izotropic’s Breast Imaging System provides true 3-D imaging with a 360 degree view acquisition. The Izotropic Breast Imaging Platform is also unlike widely available whole-body computed tomography systems that circle a patient’s body to collect images of interest. Instead, breast CT makes use of cone-beam computed tomography technology to scan only the breast of interest.

With breast CT, the patient lays face down on the system table placing the breast to be imaged in a hole in the table. The imaging hardware beneath the table circles around the breast creating a series of raw-data images. The platform computer processes these raw images to reconstruct true three-dimensional, high-resolution images, allowing radiologists to view the breast anatomy from any angle.

The Izotropic Breast Imaging System offers significant advantages over current 2-D technology:

  • The Izotropic Breast Imaging System delivers true 3-D images
  • The Izotropic Breast Imaging System delivers high resolution images that are top quality and crystal clear
  • Fast imaging (500 uncompressed images every 10 seconds per breast imaged)
  • No discomfort from painful breast compression

Dr. John Boone of University of California at Davis has been working with a team to develop the Izotropic Breast Imaging System for the last twenty years. Over US$20 million has been invested to date in developing this revolutionary technology, which simplifies breast imaging for both patients and medical providers in addition to reducing costs.

Boone is a medical physicist with 32 years of experience in academia, with broad interests in medical imaging, computed tomography, and breast computed tomography. He is a professor of radiology and biomedical engineering, and recently served as president of the principal medical physics organization in the U.S., The American Association of Physicists in Medicine (AAPM). Boone is co-author of the medical imaging textbook, Essential Physics of Medical Imaging, has also authored more than 200 peer-reviewed papers, and holds 13 U.S. patents. He has been the principal investigator of the Breast Tomography Project at the University of California Davis for the past 18 years, and his laboratory has been at the forefront of the academic development of breast CT technology.

I recommend investing eight minutes to hear Dr. Boone discuss the Izotropic System in his own words:

Another key person in the Izotropic story is CEO, Bob Thast. Over the past 35 years, Thast has served as board chairman, chief executive officer, senior executive, and director of several publicly listed companies. He has extensive knowledge of capital markets, financing activities, company management, and a track record of raising and attracting venture, early stage, and operating capital for companies he has directed and managed. Thast has expertise in strategic planning, business development, marketing, recruiting, product distribution, contract negotiation, legal, accounting, corporate governance, and regulatory requirements associated with public companies.

When I first spoke with Thast, I was quickly able to grasp the scale of the Izotropic opportunity and his high level of commitment to making Izotropic a big success. Thast has a vision of advancing the Izotropic Breast Imaging System to the commercial stage and then getting acquired by a much larger company. Izotropic is still in its early stages and the next 2-3 years could absolutely be transformative for the company both in terms of product advancement and unlocking value for Izotropic shareholders.

When I am researching speculative stock investments I look for a few key things:

  • HUGE upside potential in a growing market segment
  • Tight share structure
  • Strong insider/management ownership (~36%) – skin in the game is critical regardless of which market sector one is investing
  • Major catalysts on the horizon over the next 6-12 months which adds urgency to the investment proposition
  • The stock is flying under the radar and not widely known

Izotropic fits all of these criteria and the company is set to achieve some key milestones over the next year that could trigger significant upward revaluations in IZO shares:

    • Izotropic expects to make announcements on the awarding of two key patents before the end of Q4, 2019
    • A new, important patent filing is expected before the end of Q4, 2019
    • Izotropic expects to engage a project management group in January, 2020 to complete final engineering requirements for the commercial Breast CT Imaging model, with completion scheduled for early Q3, 2020
    • Izotropic will engage an FDA consultant in January 2020 and set up a pre-submission meeting with FDA before the end of Q1, 2020
    • Izotropic expects to construct and demonstrate its first commercial Breast CT imaging model by the end of Q4, 2020

Izotropic expects to construct and demonstrate its first commercial Breast CT imaging model by the end of Q4, 2020
It is important to note that Izotropic will need to raise money over the next few months in order to achieve its commercialization objectives. However, this financing risk is the main reason IZO is currently trading at a C$7 million market cap as the company endeavors to disrupt and take a large chunk of a multi-billion dollar growth market (3-D breast imaging).<

The market opportunity in breast imaging is absolutely enormous and in my estimations, IZO’s patents, alone, more than support its current market valuation. Rapid progress to demonstrating commercial viability for Izotropic’s Breast Imaging Platform is where the big upside exists for IZO shareholders.

I have purchased IZO shares on the open market and intend to add to my position over the coming weeks. I believe that anything under C$.40 per share is extremely attractive and the potential is for IZO to be a 10-bagger from current levels over the next 12 months. The key will be achieving the aforementioned milestones and advancing to demonstrating IZO’s first commercial breast CT imaging model by the end of next year. Izotropic CEO, Bob Thast, is committed to making IZO a big success and he personally welcomes any questions from investors at bthast@izocorp.com.

Izotropic Corporation (CSE:IZO)

Common Shares Outstanding: 23,820,000

Options:

1,550,000 @ C$.10 = C$155,000

200,000 @ C$.36 = C$72,000

300,000 @C$.30 = C$90,000

Total: 2,050,000 = C$317,000

Warrants:

6,450,000 x C$0.20 = C$1,290,000

Fully Diluted Share Count = 27,160,000

Fully diluted market cap at C$.28 per share = C$7.6 million

Disclosure: Author is long IZO shares at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing and promotional services by Izotropic Corporation.

DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.