EMvision Research Notes, page-1918

WARNING: Long postahead.

Full disclosure before I begin: I hold EMV, and I will continue to hold EMV, my investment in this company is important to me for personal reasons.

Ok, so in the absence of Vintage’s excellent posts on the EMV threads, I thought the following might be useful for folk, maybe as a bit of a ‘reset’, conversation kick-starter, or chance to take stock of where were at in the face of a real slide in the SP (a near 3 year low).

I have not put something like this together before, so please be kind. I will have made errors. Happy for them to be pointed out.

I began this post because a someone on another medical forum I’m on was discussing the pitfalls of investing in the medical space after being burnt a number of times. This person (I do not know them), outlined a number of what that saw as red flags for a medical company. I thought they seemed very reasonable, and thought I’d try and assess EMV through this prism.

Their concerns were as follows (roughly):

1.R&D costs blowing out. Too manyprojects. Cash burn.

2.Share dilution (repeated capital raises).Keep track of number of shares on issue over time.

3.Qualities of the CEO. Founder as CEO and ascientist is a red flag, they can’t say no to expanding research.

4.Keep track of timelines.

I’ve had a go at applying these criteria to EMV. I am NOT an expert in any of these areas, apologies in advance for any glaring errors/omissions.

1.R&D costs and number of projects.

EMV has only 2 devices in development, the Gen 1 device (larger and for use in hospitals), and the Gen 2 device (slated for use in mobile environments; ambulances, helicopters etc). The company is not- as far as I am aware, putting R&D money into any other projects.

Revenue	June 2019	June 2020	June 2021	June 2022
	+187%	+16%	+10%	+144%
Loss	June 2019	June 2020	June 2021	June 2022
	+250	+17%	+142%	-27%

Revenues increasing, losses are reducing. Revenue includes non-dilutive grants from sources such as NSW Medical Device Fund (2.5m), Australia Stroke Alliance (8m), Modern Manufacturing Initiative (5m). Aside from anything else, this shows support and belief from a wide variety of institutions.

The research/cash burn phase of EMV seems to be largely over, losses were negative for the first time in 2022. The Gen 2 device is at the stage of “advanced prototypefabrication and testing”, I suppose this is a bit of an unknown in terms of cost. However, there’s not 4-5 other projects on the go (as with lots of biotech companies). This company is very tight and focused in this regard.

I also remember a number of posters here pointing out how impressed they have been with EMV’s tight cost-control, they may be able to expand on this for us… bit beyond my pay grade so to speak.

2.Share dilution “Keep track of the number ofshares on issue over time”

EMV shares on issue since 2018 outlined below:

2018 31,453,750
2019 57,578,750
2020 63,759,832
2021 72,057,797
2022 77,632,717

I’m not exactly sure what is usual in this space, but after a big jump in 2018-19, there’s an increase in smaller increments. 2021-22 saw a very small increase. With the amount of non-dilutive funding being received, I’d suggest there’s less need for capital raisings than ever before. Others can probably offer a better perspective on how this stacks up to other companies they’ve experienced.

3.Qualities of CEO.

Ron Weinberger obviously stepped back from the CEO role this year. He remains in an advisory capacity. Scott Kirkland (new CEO) has been with the company since its inception, and has a sales/business, not a scientific background. Upon his appointment as CEO, Ron Weinberger said of Scott: “Scott has been my right handsince the beginning and has been immersed in all aspects of the businessoperations and product development.” This smooth, orderly transition to a well-groomed successor, who can tap into the previous CEO easily, and has a business (not scientific) background and experience, is a big tick IMO.

I would also point out that the experience and qualifications of the people on the Executive Team, Board of Directors, and Clinical Advisory Board at EMV is pretty astounding. This is not cobbled-together team of second-stringers, these are leaders in their field(s).

4.Keep track of timelines.

As far as I am aware the company has held pretty firm to its indicated timelines. Trials have progressed as anticipated, and shareholders are updated regularly. The company has made its path to market clear, as below, from 29/5/23 with a market entry date of FY2025.

Well, that’s about it. I have not even talked about the device itself (Gen 1 or 2), the (massive) unmet need they are aiming to tap in to, the positive reports from trials at leading stoke hospitals in Australia, initial market opportunity, first mover advantage for Gen 2 in particular, etc etc. I see EMV as a sound investment, while acknowledging that it’s at the more ‘speculative’ end of the market.

The potential here is massive, as the LTHs here already know.

1.20 looks pretty good to me.

Any and all comments, suggestions, critiques, and additions more than welcome.

GLTAH.