Micro-cap stocks can come in many shapes and sizes. Some might be once successful firms that lost their way and are looking to recover their prior glory. Others are companies that may have yet to generate any substantial revenues but could growth strongly if their offerings start to catch on.

Investing successfully in micro-cap stocks is difficult. Selecting the wrong company can lead to a loss of all or a substantial part of an investment. However, picking the right one could result in a big payday. The iShares Micro-Cap ETF (NYSEARCA: IWC) has provided a total return of just over 100% over the past 10 years. That severely lags the SPDR S&P 500 ETF Trust (NYSEARCA: SPY), which has returned 266% over the same period.

Below, I’ll dive into three micro-cap companies that show large potential upside but also carry significant risk.

Amprius: Advanced Battery Technology, But Significant Scale Is Needed

First up is Amprius (NYSE: AMPX) Technologies. The industrial company makes high-density lithium-ion batteries that use silicon nanowire anodes. Compared to the traditional graphite anodes that lithium-ion batteries use, these anodes take up less space, allowing them to package more lithium into a battery. This technology can substantially extend battery life in a variety of applications.

The company shows the range of a Tesla Model 3, and the flight time for a drone can be increased by around 75%. It also shows that its batteries can charge up to 80%, around five times faster than graphite anode batteries. The company’s products are primarily used in drones and high-altitude pseudo-satellites (“HAPS”).

However, this company is extremely unprofitable. The cost directly associated with producing its batteries was around three times higher than the revenue it made from them. This gave the firm a gross profit margin of -195% last quarter. With over $12 million in revenue over the last twelve months, it is reasonable to think the company could be profitable if it scaled up massively.

Price targets are wide-ranging for this firm, but a target released by Oppenheimer implies 1,117% upside. Shares have been on the rise as of late after the company disclosed $20 million in new orders. Still, the company will need to achieve much higher sales than that to be profitable. It is designing a new manufacturing facility in Colorado to increase its production capacity.

Comstock: Expanding Capacity to Capitalize Off Solar Panel Recycling

Comstock Inc. (NYSE: LODE) is a decarbonization and recycling company. One of its biggest focuses right now is building up capacity to recycle solar panel metal and then resell it.

The company currently has no substantial revenues and frequently issues more equity to fund its operations. However, it does have substantial cash on its balance sheet that it can use for funding currently. Shares have been on the rise since the company recorded its first shipments and sales of renewable metal extracted from old solar panels.

The company recently secured its first lease for a large-scale facility to expand its recycling capacity. It believes that this part of the business could be profitable by 2026 and plans to have three facilities opened by then.

Right now, the stock is trading at just $5 million higher than its assets minus its liabilities, or its book value.

Getting traction in the solar panel recycling business could mean big things for the stock, as according to MIT, “8 million tons of decommissioned solar panels could accumulate by 2030." Noble Capital Markets sees a 468% upside in this stock based on their $2.60 price target released on Aug. 13.

Marinus Hopes to Expand the Market for Its Key Drug

Last is Marinus Pharmaceuticals (NASDAQ: MRNS). The company is currently waiting to release Phase 3 Food and Drug Administration (FDA) results for its drug ganaxalone.

The drug aims to treat Tuberous Sclerosis Complex (TSC). If approved, the company could use its drug to treat around 12,700 people.

The FDA has already approved the drug for a condition with similar symptoms. However, a TSC approval could generate much more revenue as it affects many more patients.

The average price target for the firm sits at $8.50. From the current $1.65 price, this represents an over 400% potential upside for the stock.

The company plans to release the results of this Phase 3 trial in less than a month.

If the results are strong, they could have a massive positive effect on the stock price. However, if they disappoint, they could also greatly hurt the stock price, leading to a big downgrade.