NO BRAINERS

[capital gain]

ISCO. Trading opportunity/ Nobrainer?

ISCO (international stem cell corporation) is filing their quarterly results tomorrow Monday. For 2010 their entire revenue came in at $1.6 mil, however after launching their stem cell based face cream in Dec 2010, I believe they could come in at around $2.5-3 mil for the first quarter, which would be a substantial increase over first quarter 2010, which came in at around $350.000. Furthermore the stock is currently trading at the bottom of it’s trading range, and a good result tomorrow could easily change the trend IMO.

The face cream was launched in Nov-Dec 2010, through an email promotion from John Mauldin’s company Millennium wave, John Mauldin has his own very successful free newsletter “thoughts from the frontline” and is also invested in the company, he assist in all levels in their marketing effort for the face cream. The face cream is as far as I aware the only face cream in the world that can actually make your skin younger (the potential here speaks for itself)

Link to John’s newsletter where ISCO is mentioned.

http://www.johnmauldin.com/frontlinethoughts/the-endgame-headwinds

The company can currently only produce 4000 face creams a Month at around $150 each, in Nov-Dec 2010 they sold out all 7000 creams after only one email promotion in early Dec 2010, since then they haven’t promoted it at all, which IMO means they are selling out every Month, the company has also stated in their last to presentations that the marked loves the face cream. Most of the creams sold in Nov-Dec 2010 will be reflected in this quarter results + the (4000 x $150 = $600.000) per Month thereafter assuming all the production is sold

From the 10K.

Skin Care Products
ISCO’s research scientists developed two skin care products based on ISCO’s stem cell technology – Defensive Day Serum and Recovery Night Serum. Defensive Serum contains sunscreen, along with unique stem cell-derived ingredients. The day serum not only protects the skin from the aging effects of harsh light, but it continues to nurture the skin’s collagen and fibroblasts to give noticeably firmer, smoother, younger-looking skin. The Recovery Serum is a nighttimes therapy that complements the Defensive Serum. The night serum nurtures the skin’s collagen and elastin and contains ingredients to defend against damaging free radicals, to help build firmer, smoother, younger and healthier-looking skin

ISCO is an early stage stem cell company, and normally I wouldn’t get involved at this stage, however I think that the face cream they have, could be a potential game changer, they wont be able to increase production until next year, however the 4000 that they can currently make/sell every Month could take the company to the break even stage, which for a development company can be very powerful.

They currently have no debt.

The have about $6 mil in cash.

They have a credit facility of $25 Mil provided by Aspire Capital, which is entirely on ISCO,s terms, they can sell shares into it at any time, at the average price of the shares over the previous 10 days.

OS is 75 mil common shares + 2.8 mil preferred shares, with a 1-10 conversion rate into common shares, for a total OS of approx 103 mil.

They are also the only company in the world as far as I am aware the can make a bio identical cornea in a petri dish with the use of stem cells, they are launching in India sometimes this year, where there currently is a big shortage of Donor corneas.

Furthermore the stem cells that ISCO are producing are derived from unfertilised female eggs, which avoid the ethical issues in harvesting from foetuses, it also means that because the stem cells are in such an early development stage, then they can be immune matched to a large part of the population, the immune issue is an issue which many other stem cell companies are currently battling with.

From 10K
Patents
In 2010 ISCO was granted a US patent covering our proprietary technology to create heterozygous stem cells without the use of fertilized eggs or transferred DNA. Composition of matter patents for the same are pending. We have pending patents covering homozygous parthenogenetic stem cells that can be immune matched to millions of persons and methods for deriving them. Other internally generated patents include patents on methods to differentiate stem cells and produce three dimensional corneal tissue constructs. In addition, we have obtained exclusive worldwide licenses to a portfolio of patents and patent applications from Advanced Cell Technologies, Inc. (“ACTC”).
Our patent portfolio consists of over 30 patent families and over 110 patents and patent applications (when including international filings) in the field of stem cell culture. Of these, eight are issued patents and a majority of the patents and applications have been filed in the US and in foreign countries through the Patent Corporation Treaty or by direct country filings in those jurisdictions deemed significant to our operations. We also have an exclusive license to the only patent issued by the US Patent & Trademark Office for the creation of hES cells using SCNT for human therapeutic use.
We have protected our research products and branding through both patents and trademarks. Lifeline Skin Care has filed patent applications covering its proprietary formulations and methods of using stem cells to create skin care products. Lifeline Cell Technology has patents pending on its unique packaging for research products. ISCO has registered trademarks on its company name, logo and various product names to protect its branding investment. Lifeline Cell Technology’s reagent formulations are protected as trade secrets


GLTA.

A.H