Medifirst Solutions Inc (OTCMKTS:MFST) Is All About Timing

Medifirst Solutions Inc (OTCMKTS:MFST) closed out Tuesday's session for a 36% gain on the day's open, and without any major updates released, the gains can only derive from one of two things. The first, that the similarity of its ticker to tech giant Microsoft Corporation (NASDAQ:MSFT) has translated to some confused buying – yes, this happens. The second, that somebody, somewhere has an inside line on Medifirst's lead FDA 510(k) submission.Let's assume it’s the second one.The submission relates to its laser technology, and the company expects an FDA decision this month. That certain interested parties might know something wider markets don’t isn’t too far fetched a theory, and would certainly explain a market cap run up to the tune of more than one third of the company's market capitalization.With an FDA clearance confirmed, of course, there's plenty more upside to be had on top of the current gains.So what's the product in question? Medifirst specializes in what are called diode-pumped solid-state lasers. It's lead application, the subject of the 510(k), is a version of this type of laser called TTML-8102000, or commercially, Time Machine Laser. It combines two types of laser light, green and infrared, to target the reduction in both size and visibility of certain types of dermatological imperfections – wrinkles, blemishes, that sort of thing. The cosmetics and rejuvenation space in the US alone is a multi billion-dollar space, and an approval from the FDA on the current application would give Medifirst access to these billions of dollars in potential revenues. Realistically, it's not going to be a billion-dollar treatment on its own, but for a company the size of Medifirst, marketing access alone could serve up a real upswing in valuation.Here's what company President Bruce J. Schoengood had to say on the technology in the most recent update (end June, 2016):

We are very pleased that the Time Machine Laser 510(k) submission is under review and we believe that the anticipated response is well ahead of our initial timeline estimates. This a very exciting time for the company and we'd like to thank our shareholders for their patience and support.

What's the primary risk? Well, there are a few, but they boil down to two key focus areas.The first is that the FDA turns down the 510(k). It doesn’t cost too much to put one of these types of applications in front of the FDA (a little over $5,200 this year) but the cost required to fix any design issues, or rerun safety trials, could cripple Medifirst. And that's assuming the agency serves up a complete response, rather than just an outright decline. An outright decline and the company is back to the drawing board and – essentially – worthless. In other words, Medifirst and its shareholders need an approval this month, or there will be plenty more downside than the 36% upside we saw yesterday.The second is the funding of any commercialization strategy for the Time Machine Laser, assuming it gets an agency green light. Cosmetic rejuvenation is a hugely competitive space, and it's going to take a considerable amount of capital to both educate physicians as to the benefits of the system, and to incentivize them to push these benefits on potential clients. Capital that, right now, Medifirst just doesn’t have. At March 31, 2016 cash on hand came in at $203,353, and base expenses for the three months to that date came in at just shy of $100,000. Further, the company is paying around $191,000 a quarter in interest expense.There are more than 136 million shares of common stock currently sitting as unconverted notes, and the total derivative liability associated with these notes is a little over $532,000.In short, even without further raises, which are inevitable, the potential for dilution is huge and very real.The way to look at this one is this: short term, an approval from the FDA could quickly serve up high double digit gains in the company's stock. It's all about timing, however. Hold on to shares too long, and they could be diluted to nothing.We've got our eye on all the facts that play a part in this timing, so sign up to our updates below and make sure that you don't miss out on any upside, but more importantly, you don't get left holding the bag if shareholders start to unload. You'll also get a free eBook to read while we watch the markets for you!Disclosure: We have no position in MFST and have not been compensated for this article.