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WIZP: Performing according to plan

05/20/2019
By Beth Senko, CFA

OTC:WIZP

READ THE FULL WIZP RESEARCH REPORT

On May 15, Wize Pharma Inc. (OTC:WIZP) posted first quarter results in line with expectations. Net income improved to $0.15 million from a loss of $0.1 million in the year-earlier period, primarily on a reduction in R&D spend related to lower minimum payments under its LO2A license obligation to Resdevco (the patent holder). General and administrative expense increased to $0.5 million from $0.3 million in the year-earlier period driven primarily by higher stock compensation, marketing and investor relations expense. Net financial income increased to $0.74 million versus $0.41 million in Q118 due to higher amortization of premiums related to convertible loans. Cash used in operating activities increased to $0.7 million, compared with $0.5 million primarily from the $0.77 million in amortization of premiums related to the Company’s convertible loan.

Investors should note that 4.45 million Series B warrants are likely to go unexercised when they expire on or about May 19, 2019 (20 days after phase II results are released), unless the Company’s share price rises to over $1.00. The expiration of these warrants reduced dilution potential by 33%.

We are maintaining our estimates and our valuation target of $2.93 per share.

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