A close look at Blue Sphere Corp (OTCMKTS:BLSP) shows some staggering revelations that are setting up for an exciting story. The news has just broken that over 2.6 million shares of BLSP have been gobbled up by a major institutional investor and shareholder. SEC filings confirm this as all investors that own 10% or more are required to file with the SEC.
This is a significant vote in confidence as the institutional investor is not just a small player. Lazarus Management Co, LLC was the purchaser of the 2.6M shares and we know that it owns more than 10^ of the BLSP stock given the SEC filing requirements. The shares were acquired at an average cost of $0.07 which could have help sustain the uptrend the stock has seen over the last week. What is even more interesting is the fact that Lazarus owns more than 67.45M shares of the BLSP or 28.7% of the company. Rather than selling the BLSP, Lazarus continues to accumulate shares which is another vote of confidence for the stock and company.
BLSP has been bulking up its company with financing, management depth, and investor relations. It recently signed a letter of intent to develop a large biogas project in the Netherlands. Blue Sphere will enter into a long term lease agreement with another company. BLSP is tasked with constructing and operating a waste-to-energy plant. The facility is expected to cost around $24M+ and would take around 12 months to build. BLSP has two current projects going on in the United States with expected revenues of $14.5M. The projects are in Rhode Island and North Carolina.
In yet another recent announcement, BLSP was able to raise private equity funds. This doesn’t happen unless investors believe that the company will rise substantially in value and a sound business strategy. Roughly $1.925M was raised from current shareholders. The terms do come with warrants at the $0.10 level, so we expect there to be downward stock price pressure if we get there until the warrants are executed. The proceeds of the stock issuance will be used to accelerate BLSP’s growth and for general business activities.
BLSP has major goals for 2016 that should benefit early shareholders. It hopes to uplist to a major stock exchange like the NASDAQ, expand its European base over 4 facilities (valued at $26M) and an annual EBITDA of $4.1M.
The market for waste-to-energy is growing at a rapid clip given the global problems going on with climate change and the world marching towards a path to clamp down on waste. This market was valued at roughly $24 Billion in 2012 and expected to grow to $37B by 2020. There is significant tax benefits and subsidies in this industry that will prove beneficial to BLSP.
Blue Sphere waste-to-energy projects solve two pressing global problems. They provide a sustainable source of electricity and reduce the release of harmful methane gas into the atmosphere by using organic wastes (such as uneaten food) as its main feedstock. Given the recent announcements to help resolve global climate change and to reduce toxic levels, BLSP is a small but exciting story that could grow much bigger.
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BLSP is currently trading at a $12.93 million market valuation. It has recently received financing equivalent to 15% of its market value which is a huge vote of confidence. This is small cap company with huge potential and an exciting story. The industry is growing rapidly and solving pressing global issues. With an industry value of $37B, BLSP has plenty of room to move. The company will likely continue to acquire plants to grow and capture value. Management of the company has over 150 years of combined experience. This will likely not be the last time you hear about this company.
We will be updating on BLSP when more details emerge so make sure you are subscribed to Microcapspot so you know what’s going on with BLSP.
Disclosure: we hold no position in BLSP either long or short and we have not been compensated for this article.
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