Member Info for Hedgehog100

Thanks Degsy.

The combination of good recurring revenues and high growth is a very compelling one, which has been demonstrated time and time again.

Thanks Rubbermanneke.

I think that a market cap. of below £10M. is a steal here, considering the valuations of IQAI's listed peers.

Currently just £9M., at 6.4p, it's under a third of the market cap. of Polarean Imaging (POLX) (£29M. at 25p), which is itself seen as very undervalued, and has been suffering from an overhang.

Much imaging technology in use is woefully outdated, and there is massive scope for improvement, giving a massive opportunity for imaging players like IQAI and POLX.
Indeed, imaging could potentially be one of the 'next big things' in investment, and IQAI looks like a superb way to ride this wave.

A reminder of Imaging Biometrics' recent clinical trials success with its dT1 brain tumour scanning software (which wasn't actually RNSed).
These are the most key points:

"CONCLUSIONS: This study shows that dT1 can predict early progression comparable with the standard method but offers the potential for substantial time and cost savings for clinical trials."
"Consequently, the dT1 tool has the potential to cause a paradigm shift in how brain tumor burden is assessed."
http://www.ajnr.org/content/40/7/1132

And the dT1 tool is one of IQAI's projects that will be accelerated with the new 6th. August 2019 placing funds:
"The funds raised will be used to accelerate the commercialisation and development of two of Imaging Biometric's ("IB") projects: the low-flip angle technique; and IB's Delta T1 mapping approach."
https://www.lse.co.uk/rns/IQAI/iq-ai-limited-placing--mij57v9jf1bxqgz.html

In fact, David Smith has said (in an investor lunch last August) that whilst StoneChecker software has great potential, the real winner could be the brain scanning software of IB, which should be extended to other areas. Liver was mentioned as achievable with minor tweaks.
Considering the immense potential for StoneChecker software, this is really saying something.

A look at the Imaging Biometrics website shows how outstanding their technology is.
https://www.imagingbiometrics.com/

Indeed IQAI is a technology leader.
It's groundbreaking products are disruptive technology at its finest, offering improved performance and big savings.
And the high technological and other barriers to entry make it difficult to compete against.

Allied to the brilliant business and sales nous of Trevor Brown and David Smith, and it's the perfect combination for a tip top growth stock.

"Global Brain Tumor Diagnosis and Treatment Market Worth Over USD 744 Million by 2024: Zion Market Research
According to the report, the global brain tumor diagnosis and treatment market was valued at approximately USD 426 million in 2017 and is expected to generate revenue of around USD 744 million by the end of 2024, growing at a CAGR of around 8.65% between 2018 and 2024.
October 29, 2018 01:48 ET | Source: Zion Market Research
... Brain tumors generally occur in supportive brain tissues. The exact cause of brain tumor is not yet known, and it can occur in any age group. Neurologists base the brain tumor treatment on the type, tumor location, tumor size, patient’s health, and patient’s age. The main drivers that fuel the growth of brain tumor diagnosis and treatment market are an increase in the occurrences of brain tumor, the rise in the geriatric population, and the development of technologies for tumor treatment. ...
The main players of the global brain tumor diagnosis and treatment market are AstraZeneca, GE Healthcare, Carestream Health, Pfizer, Inc., Merck & Co. Inc., Siemens Healthineers, Hitachi Medical Corporation, Philips Healthcare, Toshiba Medical Systems Corporation, and Shimadzu Corporation. These companies focus on mergers and collaborations to develop their diagnostics techniques. For instance, in 2015, NICO announced its collaboration with Hitachi Aloka Medical to improve visualization of difficult to reach brain tumors. ... "
http://www.globenewswire.com/news-release/2018/10/29/1637971/0/en/Global-Brain-Tumor-Diagnosis-and-Treatment-Market-Worth-Over-USD-744-Million-by-2024-Zion-Market-Research.html

Note that CorTech Labs, who IQAI partnered with in June, have agreements with very big players like GE Healthcare and others.

And that David Smith (in an investor lunch last August) has said that IQAI will probably later be taken out by GE or Phillips, who provide the hardware but have poor software that is 20 years old in many cases.

An IQAI joint venture with one of these large players, involving a large cash injection, could I think be a possibility.

Thanks Ian.

It's noteworthy how many of the best performing shares have a good proportion of recurring revenues.

That's why it's one of the key business traits that I look for in an investment.

And vice versa.

Thanks Readicant.

Interestingly, next week (Thursday) is the first anniversary of IQAI's FDA application submission being formally accepted.
Would the FDA want it to slip past the one year mark?!

StoneChecker was originally submitted to the FDA in May 2018. Under the FDA's 510k guidelines, manufacturers are required to compare the new product to an existing FDA cleared product. This represented a challenge since StoneChecker has some unique features which are not found in other "predicate" products. A CT machine software was chosen to establish "substantial equivalence" to StoneChecker, but after several discussions with FDA it was mutually agreed that a different comparator device be used. Consequently, the 510k package was resubmitted to them and they formally accepted it on 22 August 2018.

Recurring revenues is one of the reasons IQAI reminds me of 750-bagger Accesso Technology (ACSO), which from low to high rose from 4p to c. £30.

27th Mar 2019 7:00 am RNS Accesso Technology - PRELIMINARY RESULTS
"… 2018 Financial Review
accesso's financial performance continues to be underpinned by its highly repeatable and highly visible revenue stream, …
We estimate that for 2018, 74.4% (2017 Proforma: 74.6%) of Group revenue is repeatable in nature (transactional revenue plus other repeatable). There is an expectation that the repeatable % will increase as TE2 repeatable platform revenues evolve at a greater rate than their non-repeatable professional services revenues. ..."
https://www.lse.co.uk/rns/ACSO/accesso-technology-preliminary-results--h4axuzb46zyjsf7.html

IQAI is moving more to a subscription based model with the new IB server product, and of course StoneChecker software is sold on an annual subscription basis.
Which means that IQAI's revenue, as well as growing strongly, should be very recurring in nature.

"Recurring Revenue
REVIEWED BY DANIEL LIBERTO Updated Apr 25, 2019

What is Recurring Revenue?
Recurring revenue is the portion of a company's revenue that is expected to continue in the future. Unlike one-off sales, these revenues are predictable, stable and can be counted on to occur at regular intervals going forward with a relatively high degree of certainty.

Many market pundits consider recurring revenue to be a highly desirable quality. They make a company more stable and predictable, both operationally and financially, lowering the risk that business will take a drastic turn from one month to the next.

That stability usually comes at a cost. Investors are regularly willing to pay more for the earnings generated by companies with recurring revenues because their forecasts are deemed more reliable. ... "

https://www.investopedia.com/terms/r/recurringrevenue.asp

Recurring revenues are also cheaper to generate after the first year, because the initial sales cost doesn't have to be repeated.

But their most important trait is that they largely keep on coming in, year after year.

So unlike one-off sales, which need to be matched annually just to stand still, recurring revenues create a base - and staircase - for revenues to grow upon year after year.

A weaker sterling will also make a takeover of IQAI cheaper for foreign predators, as they will get more sterling for their own currency.

This was believed to be a stimulus for the foreign takeover of ARM three years ago, at a huge premium, under a month after the Brexit vote and the concurrent fall in sterling.

"SoftBank to acquire UK’s Arm Holdings for £24.3bn

Arash Massoudi in London, James Fontanella-Khan in New York and Richard Waters in San Francisco
JULY 18, 2016

Japan’s SoftBank has agreed to buy the UK’s Arm Holdings for £24.3bn in a big bet that the British smartphone chip designer can help it become a leader in one of the next big technology markets, the “internet of things”. The Japanese telecoms group’s takeover of Cambridge-based Arm, which was founded 25 years ago and employs 4,000 people, will be the largest acquisition of a European technology business.

After just two weeks of breakneck negotiations, SoftBank said on Monday that it will pay £17 in cash for each share in Arm, a 43 per cent premium to its closing price last week. Shares in Arm surged to £16.78. Masayoshi Son, chairman and chief executive of the Japanese group, told reporters in London the deal highlighted his confidence in the British economy, just weeks after the country voted to leave the EU. “I am one of the first people to bet with a big size on the UK after Brexit. Talking [about investing] is easy. I am proving it?.?.?.?This is my big bet,” he said. As a global force in chip design, Arm is better insulated from the Brexit vote than many other UK companies by its leadership in a key segment of the technology industry and the fact that it earns in US dollars. ... "

https://www.ft.com/content/235b1af4-4c7f-11e6-8172-e39ecd3b86fc

One of the keys to the success of 150-bagger Pentland Industries was a US subsidiary, as Pentland sold Reebok into the US through its US subsidiary Reebok USA Ltd.

And IQAI's US subsidiary will of course prove invaluable for selling StoneChecker software into the US market.

An extract from David Smith's 18.9.18 video interview on Proactive Investors:

Q. "And Imaging Biometrics, that would be the distributor for the software?"

D.S. "Yes. So Imaging Biometrics. Part of the strategy of acquiring a US-based company to complement the exisiting Stone Checker in the UK was that you would have reciprocity basically. So the US organisation is used for StoneChecker sales going into the US, and the European organisation is used for IB sales going into Europe."

IQAI is a waiting game at the moment, and in investment, fortune favours the patient.
But least in this case there's something well worth waiting for, which could be any day, and the share price is resiliant.

FDA approval for StoneChecker software sales in the US will unleash a stream of pent up sales activity from the company, which should make for a very compelling stream of positive newsflow.

And as the majority of IQAI's sales are in US Dollars, their sterling value will increase as sterling weakens against the Dollar, as it has been doing recently.

Currently 1 Pound sterling equals 1.21 United States Dollars, but sterling's value against the Dollar could weaken further, especially in the event of a hard Brexit.

So IQAI is effectively a good hedge against a hard Brexit scenario, a bit like buying a US company ... which is in effect partly what we are doing, as IQAI's Imaging Biometrics subsidiary is American.

IQAI's StoneChecker software could be the greatest English export to America since Reebok.

And success in the States is success with a capital S, because it is such a vast market.

Indeed the success of Reebok lead Pentland Industries to 150-bag during the 1980s, one of the very best performing shares of that memorable decade.

"Pentland Group
From Wikipedia, the free encyclopedia

Pentland Group plc is a British privately held, global brand management company, involved in the sports, outdoor and fashion markets. Based in Finchley, north London, it is owned by Stephen Rubin and family. In 2007, it had sales of £973 million, making it the 42nd largest private company in the United Kingdom.

... The success of Pentland Group can be traced back to August 1981, when Pentland Industries acquired 55% of Reebok for US$77,500. By 1983/84, Reebok accounted for 70% of Pentland's turnover. Pentland's shares rose from GB£0.55 at the start of 1984 to GB£3 by the end of the year, and up to GB£10 in June 1985, while profits rose from GB£1 million in 1983 to GB£12.9 million in 1985. Pentland then listed 60% of Reebok in a flotation valuing the company at US$300 million.[2] ..."

https://en.wikipedia.org/wiki/Pentland_Group

"Reebok
From Wikipedia, the free encyclopedia

... In 1979, at the Chicago International Sneaker Trade show an American businessman, Paul Fireman, took notice of Reebok. Fireman was working for team sports and negotiated a deal to license and distribute the Reebok brand in the United States. The division was called Reebok USA Ltd.[17] Later that year, Fireman introduced three new shoes to the market at $60. By 1981, Reebok reached more than $1.5 million in sales.[5]

1980s–1990s

In 1982, Reebok debuted the Reebok Freestyle aerobics shoe, the first athletic shoe designed for women.[5][18] Fitness professional Gin Miller became the face of "Step Reebok," the company's aerobics fitness campaign and program.[16] The following year, Reebok's sales were $13 million.[19]

... Fireman bought the British-based parent company in 1984. In 1985, Reebok had its initial public offering on the New York Stock Exchange under the ticker symbol RBK.[15][20] ...

During the 1980s, Reebok began introducing sports clothing and accessories (alongside entering the college/pro sports arena), along with a new line of children's athletic shoes (called 'Weeboks')[24] at the end of 1980. By the end of the year, Reebok's sales were about $1 billion.[2] ... "

https://en.wikipedia.org/wiki/Reebok

THE ELEVENTH HOUR PRINCIPLE

"COPIED FROM “BEING HAPPY” BY ANDREW MATTHEWS

In seeking goals, it is important to know about these “eleventh hours.”

Have you ever noticed in life that things can look really bleak just before a dramatic turn for the better? The businessman reports that just before he made his fortune, he was about to quit. Perhaps you have had the experience. Life is like that because there is a principle at work here – the ‘eleventh hour’ principle. it is always darkest and coldest just before the dawn. But if we hang on long enough, we will get our rewards.

If we look at childbirth, we see the principle in evidence also. Just before the most incredible gift of life, the mother-to-be has her patience truly tested and undergoes considerable pain and anguish. (My mother said it was all worth it.)

Once we recognize the eleventh hour for what it is, life loses a lot of its trauma. In effect, the universe often seems to be testing us to see if we are serious about attaining our goal. If we hang on that little bit longer….BINGO!

Once we realized what was happening, we can actually be one step ahead. When everything looks bleak, we can then tell ourselves, “So everything is going wrong! This could mean that everything that I have been striving for is just around the corner.” Then we should feel better.

We will generally be tested in some way before achieving something of value. If we can pick the eleventh hour for what it is; and treat any difficulties as a necessary part of the process of achievement, then, firstly we won’t be quitters, and secondly, we will achieve whatever we desire in life.

Don’t be fooled. The eleventh hour is usually an impostor. When everything looks black, it could be time to celebrate. You may be nearly home."

https://10vantagepoint.wordpress.com/2010/08/25/eleventh-hour-principle/

With the previous placing to yesterday's, in June, the trough bottom was reached the following day after the placing RNS, with subsequent recovery.

Similarly, expect a strong rebound from here, for multiple reasons.

E.g.:
1. FDA approval imminent (any day now expected).
2. Extreme undervaluation compared to listed peers.
3. There has been consistent big buying for the last two months.

The company won't have satisfied demand for shares through yesterday's placing of 4,583,333 shares.
More than five times that number have been traded in the first three days of this week alone.

Trevor Brown knows what he's doing, and has more incentive than anyone for this to perform.

That's why he's conducted a placing giving just a few per cent dilution, but giving the company the security to accelerate progress to meet meditech AI demand.

And the placing price of 6p is fine: it underpins the rise from the last fortnight at the recent support level, and creates a more solid base to push upwards from here.

"What is shock wave lithotripsy?
Shock Wave Lithotripsy (SWL) is the most common treatment for kidney stones in the U.S. Shock waves from outside the body are targeted at a kidney stone causing the stone to fragment. The stones are broken into tiny pieces. lt is sometimes called ESWL: Extracorporeal Shock Wave Lithotripsy®."
https://www.kidney.org/atoz/content/kidneystones_shockwave

I would add that kidney stone treatment can actually cost a lot more more than the annual subscription fee for StoneChecker software (£5,000 in the UK):

"Kidney stone treatment can cost from just under $10,000 to $20,000 or more for surgical removal or extracorporeal shock wave lithotripsy (ESWL)."
https://health.costhelper.com/kidney-stone.html

StoneChecker can identify patients at high risk of lithotripsy failure, so it could easily quickly pay for itself many times over.

And it is essential to improve the effectiveness of kidney stone treatment.

As such, it could soon come to be seen as a 'must have' item for such treatment, and potentially could become ubiquitous in this area.

Perhaps even "selling like frozen daiquiris in hell", as Ernest Hemingway would say.

Relatively speaking, IQAI are adopting a 'pile it high, sell it cheap' approach with their StoneChecker software product, based upon the £5,000 UK annual subscription fee.

It's really priced to sell, and buyer commitment will be made even easier by two further aspects:
• The cost comes out of revenue rather than capital budgets.
• The thirty day free trial, effectively de-risking the sales decision for the buyer.

For the multi-trillion dollar US healthcare market, the cost will be relatively small change.

And as it's addressing an unmet clinical need, which should save time and money by improving the efficiency and effectiveness of kidney stone treatment, the technology-loving Americans should see it as an obvious buy.

There are more than 7,200 hospitals in the US alone, and kidney stones affect tens of millions of Americans during their lives, so the potential market is vast.

And it could generate a multi million pound stream of annually recurring revenue, at juicy margins.

The technology is patent-protected, and has a unique diagnostic ability compared to competitors.

Also remember that this is just one of IQAI's multiple products, some of which have even greater potential than StoneChecker.

Thanks to Hulk on ADVFN for this great post about the DS interview:

hulk2004 31 Jul '19 - 17:15 - 2062 of 2142
"Fantastic interview, David Smith is a rock star of a CEO, excuses some much confidence when being interviewed!
All systems go for next 6/12 months, could be 100million market cap eventually if not taken out!"
https://uk.advfn.com/cmn/fbb/thread.php3?id=43345935&from=2060

And thanks again, and well done, on the correction Ivyspivey.
(I was wondering who would be the first to spot the error!)

After the FDA approval RNS, watch out for a new David Smith video interview on the Proactive Investors website, probably later that same day.
His interviews seem to have a very positive impact on the s.p.

More extracts from Wednesday's video interview: the first part, where David Smith is talking about their gadolinium-free imaging project:

"Our collaboration with the Medical College of Wisconisn, and in partciular Kathleen Schmainda, has given us a number of great ideas. This is where this one came from.

The gadolinium-free imaging project is to, is designed to eradicate the use of gadolinium-containing compounds in imaging. All you've got to do is google gadolinium toxicity, and you'll find all kinds of lawsuits. Generally physicians and patients are upset about using the product. ...

We've already had a couple of products on the market now for a year or two that actually diminish the use of gadolinium-containing contrast agents. ... so reduce the amount the patient sees by 50%.

But the new initiative is to actually reduce it to zero. ... we haven't seen any that reduces it to zero. It was the subject of a patent that we filed back last October. ... And that entire process takes about eighteen months. Completely separate to the FDA process. So, and you can launch a product with a patent pending, but you cannot launch a product that has not been FDA-approved. ... But certainly you're protected from the date that you file the patent. ...

worldwide, there are thirty million procedures where gadolinium is used each year. And at round about sixty dollars a shot that's almost a two billion dollar market. So it's an absolutely immense market. ...

If there's a better mousetrap out there, you can bet the radiologists will want to use it. ... It's not an evolutionary creep, it's a revolutionary jump."

https://www.proactiveinvestors.co.uk/companies/news/314281/iq-ai-s-david-smith-on-the--immense-market--for-its-gadolinium-free-imaging-product-14281.html