Copytele Inc Com (NASDAQ:ITUS)

CAPS Rating: 1 out of 5

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jed71 (99.84)
Submitted May 17, 2017

ITUS was initially formed as a telecommunications company with a joint venture in 1982. Their original purpose was to develop, manufacture, and market products in the telecommunications field. A lot has changed for this firm over the past three and a… More

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Recs

0
Member Avatar OklaBoston (61.77) Submitted: 11/17/2017 2:15:43 PM : Outperform Start Price: $2.87 ITUS Score: +5.23

Insider open market buYing since it fell below $10.00

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Member Avatar RES7 (98.72) Submitted: 6/26/2017 4:55:12 PM : Underperform Start Price: $1.15 ITUS Score: -157.26

otc reporter

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3
Member Avatar jed71 (99.84) Submitted: 5/17/2017 8:59:59 AM : Underperform Start Price: $1.05 ITUS Score: -181.26

ITUS was initially formed as a telecommunications company with a joint venture in 1982. Their original purpose was to develop, manufacture, and market products in the telecommunications field. A lot has changed for this firm over the past three and a half decades. Since that time, they have gone through multiple reverse splits, business plan changes and corporate name changes attempting to find a successful business plan that is both revenue and profit generating. Here is a small snippet from a very old 10-Q listed with the SEC:

“The Company, which is a development stage enterprise, was incorporated on November 5, 1982 and has had no revenues to support its operations since its inception. The Company's principal activities presently relate to a Joint Venture with Shanghai Electronic Components Corp. ("S.E.C.C.") of Shanghai, China. It is presently contemplated that the Joint Venture, in conjunction with the Company and S.E.C.C., will develop, manufacture and market products worldwide in the telecommunications field. There is no assurance, and the Company is not able to predict, if and when marketable telecommunications products incorporating the Company's flat panel technology will be developed or produced.”

The ITUS Corporation was formally known as Copytele, Inc. a firm involved in, “the development, acquisition, licensing, and enforcement of patented technologies that are either owned or controlled by the Company.” While parts of that business plan are still being implemented, in the company’s own words, the patent business will take a back seat to their latest venture, bio-tech cancer testing. If you think this business plan “adjustment” is a giant leap for a patent firm, you’re not alone. I find it incredible that a company such as this can make the transition to bio-tech while barely raising an eyebrow among the investment community and the regulators. The firm has established a new subsidiary for their latest and greatest business plan:

“In June of 2015, the Company announced the formation of a new subsidiary, Anixa Diagnostics Corporation (“Anixa”), to develop a platform for non-invasive blood tests for the early detection of cancer. That platform is called Cchek™. In July of 2015, ITUS announced a collaborative research agreement with The Wistar Institute (“Wistar”), the nation’s first independent biomedical research institute and a leading National Cancer Institute designated cancer research center, for the purpose of validating our cancer detection methodologies and establishing protocols for identifying certain biomarkers in the blood which we identified and which are known to be associated with malignancies. In August of 2016 ITUS announced the renewal and expansion of our relationship with Wistar.”

The company has spent a great deal of time highlighting and promoting their partnership with The Wistar Institute, which they term a “collaborative research agreement.” The problem I have with their terminology is the Wistar Institute is being paid for their efforts, so they are simply a contractor, not some sort of non-profit assistance to the firm. The purpose of this agreement is to try to validate whether their very young development stage product, CcheckTM, can detect cancer in its various forms. There are several problems with this business plan, some of which are:
• The testing being performed with the Wistar Institute is simply experimental in nature at this juncture. The testing is both un-blinded and nonconforming and only confirms that their product remains unproven and in the development stage.
• They have not begun any phased study with the FDA. By their own admission, even if the product is proven to have potential, any approval process with the FDA could take years, if not decades.
• The competition within the field of biomarker testing research is immense. Many of these firms are better funded and have technologies that are much further along in the approval process than ITUS. ITUS also admits to this in their latest 10-K. To wit: “We are aware of many different types of diagnostic tests available to detect cancer that are currently in use or being developed and many more types of diagnostic tests may be developed in the future.”
• This company currently lacks the financial resources and backing to bring this product to market. The firm has limited cash, and heavily utilizes the equity markets to fund its operations. In their own words, “we cannot provide any assurance that we will be successful in [raising capital] in the future to the extent necessary to be able to fund our operating activities and debt obligations over the next 12 months, which raises substantial doubt about our ability to continue as a going concern.”
• Many of the senior management and directors, including the acting CEO, do not seem to have direct experience with cancer testing applications, much less experience in operating bio-tech companies. The CEO’s experience seems to be as an attorney with intellectual property firms, not bio-pharma. Two of the directors and the CFO also do not have long histories with the firm, as they have all recently joined the firm in 2016.
• Some of the former companies that employed the current officers are more than a little suspect. For example, the Executive Chairman of their new subsidiary, Anixa Diagnostics, states that he, “served as Chairman of the board of directors of Ascent Solar Technologies, Inc., a publicly-held solar energy company, since June 2007.” Ascent Solar Technologies has undergone several rounds of pump and dump activity in their history and is currently trading as a sub-penny stock on the OTC markets.

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Score Leader

HDTVBG

HDTVBG (< 20) Score: +226.74

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Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
Toprope101 99.86 11/18/2016 Underperform 5Y $5.00 -39.20% +18.86% +58.06 0 Comment
JoeySolitro3 99.38 11/23/2016 Underperform 5Y $5.03 -39.54% +17.95% +57.48 0 Comment
stampsc 99.60 1/25/2017 Underperform NS $4.85 -37.25% +13.68% +50.94 0 Comment
wallet2061 73.77 10/30/2017 Outperform 5Y $2.01 +51.24% +1.14% +50.11 0 Comment
Under5 < 20 10/24/2017 Outperform 5Y $2.26 +34.51% +1.29% +33.22 0 Comment
comicalmanbeast 54.87 3/28/2017 Underperform 5Y $3.51 -13.40% +10.90% +24.30 0 Comment
ClientNein 99.98 10/13/2017 Underperform 5Y $3.40 -10.59% +1.90% +12.49 0 Comment
chammond55 97.26 11/14/2017 Underperform 5Y $3.20 -5.00% +1.00% +6.00 0 Comment
BigShort 98.67 11/14/2017 Underperform 5Y $3.20 -5.00% +1.00% +6.00 0 Comment
OklaBoston 61.77 11/17/2017 Outperform 5Y $2.87 +5.92% +0.70% +5.23 1 Comment

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