Author: Yazan Al Homsi

Overview:

Moseda Technologies (MSD.V) is a 12.7M CAD microCap company focused on secure mobile healthcare and homecare.

IPO and Turnaround

The Company went public as an RTO earlier this year at 20 cents (valuation of c.8.4M Canadian) and did not fair well. At that point, the company started with a focus on logistics and as the market was not as large and market penetration was slow, interest in the stock started to fade away, resulting in a share price as low as 8 cents.

The company shifted its attention and focused on the Healthcare Industry. Since then, the SP hit a recent high of 36 cents and MSD has been achieving revenue generating milestones at a very fast pace.

In my opinion, Moseda’s current management has demonstrated great business intelligence and agility in this switch of focus. While Moseda is currently very much focused on the healthcare industry, this does not diminish any of the milestones reached in the Logistics industry. In fact, Moseda continues to maximize the value of such assets through the pursuit of potential partnerships and/or acquisitions.

Business

In short, the company is in the business of Mobile Device Management and Browser Security. Essentially, Moseda has created a mobile device tracking platform with state of the art security features attached. While the technology can be used in many industries, Moseda supports applications in the oil & gas, Logistics, and Healthcare industries.

Competition

Whilst it's tough to pin down direct competitors to Moseda, the closest competition is Patient Home Monitoring (PHM.V). However, Moseda is more of a complimentary to what Patient Home Monitoring does. Essentially, MSD would perfectly compliment a company like PHM with their technology.

Balance Sheet

Company has close to 1.3M CAD in cash aside from proceeds from the 2 recent purchase orders (350k + 250k). Last raise was done a few months back at 20 cents.

Monthly burn rate is between 60 and 70 thousand CAD dollars. The Company has a run rate to cash burn profitability in Q1 2017. No need to go back to the market to raise funds any time soon, unless the company finds an attractive acquisition that would have a positive impact on revenues and the share price.

Share Structure

Current float is 52M shares, with 9M locked in a placement split into 2 tranches that comes free late January and early February. The CEO and his family own close to 20% of the float and our network including us own close to 40% of the float.

There are 7.5M warrants that are at 35 cents and are open for another 14 months.

Following, I will focus on the Healthcare industry applications or ‘Smart Health Solutions’.

Main Line of Business: Smart Health Solutions

Anyone that has recently visited a hospital in Canada knows that there is a clear mandate to eliminate all paper records and to make the move to maintaining all patient records digitally. Additionally, digitizing patient records comes with a need for increased efficiency and automation of many tasks performed in the healthcare industry.

The company is essentially taking the old healthcare model of managing tasks manually and recording patient's data (tests, vital signs, etc.) using pen and paper to a an automated model that allows data to be placed on a mobile device in a secure manner through data encryption. The data is stored on the cloud and is only accessed by authorized personal. This in turn allows hospitals or other patient care facilities to reduce hours spent by healthcare practitioners performing their daily tasks, leading to increased staff productivity and significant cost savings. The model will be expanded further over the next few months to key segments such as home care patients.

In summary, amongst many other applications, Moseda’s software does the following:

A) improves the efficiency of healthcare professionals by managing their tasks and providing them with necessary reminders and alerts,

B) communicates directly with wireless medical devises with no manual intervention (thus eliminating potential human error in reading the information or manually transferring the readings from paper), and

c) maintains all this data on the cloud in a secure manner.

To read more, please check the Company's link below: https://moseda.com/smartcare

Applications of Moseda’s software in the Healthcare industry (Three different segments I , II , III )

Mobile Application

• -Secure digital patient record keeping
• -Access to records from anywhere
• -Comprehensive analytical health charts
• -Send, receive, and store files securely

Digital Health Records

• -Review historic patient health record
• -Record notes on patient health performance
• -Collect assessment tests from patients
• -Monitor patient data charts and diagrams

Task Management

• -Schedule and assign tasks
• -Monitor patient health status in real-time
• -Send & receive patient notifications and alerts
• -Capture patient data digitally on-the-go

Connected Wearables

• -Instant readings from wearable devices
• -Measure blood pressure, blood oxygen, blood sugar, body weight, bone mass, etc.?
• -Automatic data upload to patient records (no manual data input required)

Revenue Drivers:

1. Monthly Subscription / $5 - $15 per month per patient

Standard SmartCare software license to manage patient health performance in long-term and home care environments

2. Video Consultation / 10% of consultation fee*

Custom SmartCare video platform to facilitate remote doctor - patient consultations?

* average 20 minute doctor consultation fee = $50

3. Hardware / 10% profit margin**

SmartCare - approved hardware included: smartphones, tablets, blood pressure monitor, weight scale, wristband, oximeter, among others

** prices range between $50 - $600 CAD

4. Other (see below) / Blue Sky potential

While device sales will generate the largest initial revenue, the monthly subscription will provide recurring cash flows on a medium and long-term basis.

Another revenue stream that will be very valuable when Moseda hits the 20-25k patient mark is the sale of patient statistics and data (aggregated information with no personal information attached) to interested parties such as insurance companies, pharmaceuticals, and HMOs. Essentially, think of any insurance Company in the world, they all need such data to do their actuarial analysis to determine insurance premiums. This type of information is very valuable to many companies and has no cost attached (100% profit margin). This in my opinion is where the blue sky is.

Why Invest Now

• -Recent achievements and milestones not fully priced into current SP
• -Pivoted to focus on Health Care applications for home and institutional patient monitoring.
• -Received a Medical Device Establishment License from Health Canada in September
• -Negotiated a deal w/ an international Top 5 Pharmaceutical and Medical Device company to become an distributor of their products
• -Executed on a $350,000 sale (40% margin) to a customer servicing over +50,000 patients in the home care space
• -Received a second purchase order for $250,000 sale (40% margin) from the same customer within 1 month of the first order
• -Launched a pilot project with a multi-location client in western Canada. Moseda is implementing its mHealth technology to help the client manage digital health records, monitor patient daily vital signs, track patient visits and organize personnel.
• 2)More revenue generating contracts and partnership expected early 2016
• Moseda is on the cusp of securing more key contracts with healthcare providers in Canada and the US. We also think that with the growth of home patients and home care in NA, the subscription revenue stream, could be a substantial driver to both revenue and valuation.
• 3)No regulatory hurdles involved (Health Canada License to import and sell devices obtained) With this license, MSD can sell its software to be added to customers’ existing devices or sell them the medical devices they need with the software installed. With this step, MSD becomes a one stop shop and gains full access to the market, devices + software + additional add on services.
• 4)Low burn rate
• MSD uses highly skilled contractors as needed, thus keeping their cost very low. Also, MSDs CEO has a tremendous amount of connections worldwide in the healthcare and home patient care industry. He has been the key to signing up the recently announced (unidentified) customer
• 5)Insiders have skin in the game and CEO wants to create a legacy with MSD
• Insiders own a ton of shares, from my last account around a month ago the CEO owns approximately 3.3M shares, and along with a few close family and friends a total number of shares held of approximately 5.8M.
• Also, the CEO is dedicated to the company 24/7 and is constantly expanding the product offering and capabilities based on discussions with potential customers and industry leaders. His background is mainly in mobile security, which will be the main differentiator and key success factor for Moseda in an industry that puts tremendous value on patient confidentially and information security.
• 6)No need for market financings
• MSD has recently been cashed up with a 1.5 million infusion in addition to the profit made on the 350k initial order. With a 720k annual burn rate, MSD has a run rate until approximately Q1 2017, not considering current and potential revenues.

What’s to come?

• -Recurring revenue potential is near terms w/ our home care client
• -Additional revenue from pilots turning definitive – expected in January
• -Diversity of revenue (ie: multiple sources)

Q: What will take MSD to new highs?

Macro: The baby boomers market is growing; 10,000 people turn 65 every day in the US; moving to an assisted living facility is an absolute last resort for most people; they want to remain independent; doctors/nurses/practioners are economically incentivised by payors to utilize technology in the delivery of care.

Micro: MSD has very strong relationships with its’ current customers and is talks with many potential new customers – they are industry leaders (with security as main differentiator) and carry a strong degree of clout that will open up doors for additional revenue generation. A ramp up of revenue is underway and I expect that a large portion of it to be recurring revenue. Moseda is being approached on a weekly basis by organizations such as long term care homes that want to adopt or pilot their technology.

My interview with the CEO can be viewed here

Author Disclosure: "We are the business development team helping Moseda from a capital markets stand point as well we own a significant holding in Moseda."

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SecretCaps' Disclosure: This article was written by SecretCaps Member, Yazan Al Homsi. SecretCaps does not recommend or back the article as it is an independent article being shared for our members' education. This content is strictly informational and educational, do not trade or invest based upon the above information. Further, this is guest content and is not the work of, or recommendation of, SecretCaps.