Hi JayWin
The main risks I see are the usual startup risks of: cash flow, unproven sales record in an established marketplace and unforeseen competitive pressures.
The key question is, will the smaller scale of the product be enough of a market advantage to sell the device? What are the triggers to replace an existing device or buy a new x-ray unit? Does it meet a critical need in the market and will hospitals want to buy it? I have not yet seen marketing data that points to the specific value measures to the target customers in real terms.
It is probable that this product does get some sales traction but it may ultimately a stepping stone to some of the other applications such as the military hospital unit or explosive detection device, and the bedside medical imaging using back scatter application (if this successfully competes with CT scanning it will be huge). Only time will tell on these fronts.
Saying all that, I know some of the folks who designed and manufacture the product from a previous life and they are very capable operators with a lot of successful products under their collective belts. They have committed to this product so it must have some intrinsic value IMO.
The Carestream connection is a critical distribution link and although it is a single company they are well established in the US market space for this application so that is less of a concern IMO.
The other upsides are the additional product lines available using the core technology, potential interest from major players based on the potential technology application, the unprecedented support from the SA government in terms of credit and setup space and the pool of experienced manufacturing people with a strong motivation to make the company succeed.
Hope this helps
