It's been slightly more than a year since the original message...

It's been slightly more than a year since the original message was posted. What happened within this year? Weak software margins, even weaker RIMAB margins, low growth of Aquila in the Cloud customers, losing a big customer, problems with collecting money and out of control expenditure - this is not even a full list of things that led to unsatisfactory financial performance which in turn forced management to raise capital under unfavorable conditions. There is nothing on the list other didn't see and as a result the share price is where it's at today. In the original thesis I mentioned being morally prepared for a capital raise. I truly was, but deep inside I really hoped it wouldn't get there. Well, it did. Am I morally prepared for another cap raise? The answer is "no". The good thing is that I think there won't be one.

IMEXHS is a startup that happens to be public. And the very thing that makes a startup attractive to investors can occasionally cause frustration. In our case, the management try a lot of different things and sometimes they make mistakes. The important key is ability to learn from mistakes quickly and pivot, which this management did. Very often though, this learning occurs on minority shareholder's dime while management is getting handsomely paid. Yes, we had a cap raise and yes, the share price is down. But let's not forget that insiders are the biggest losers so far with their high ownership stakes. Exactly this fact makes me confident there wouldn't be another call for public's money. The incentives command a different direction - cost cutting and cashflow profitability. I am confident, hadn't we had aligned management there would have been another cap raise on the way already and there wouldn't have been a swift implementation of a cost reduction plan.

Company has been trying to do too many things at once - grow in the US, Europe and Australia, to find partners all over the world, and to develop new products in-house. Forced cap raise likely served as a wake up call - money in the bank is a finite figure. The solution was simple - focus on the things that will be immediately accretive and pull the plug on the things without immediate payoff in sight. There goes US expansion which was eating up $600k a year, there goes reduction is staff - 100 employees today vs 140 last June according to LinkedIn, and there comes a new PACS storage system at $250k/year which is half of what it used to be. This amount of work within only a limited two-three-quarter timeframe is impressive and credit for it gets lost amid frustration about poor share price performance.

Two main points behind the bull thesis remain the same - highly aligned insiders and an outstanding product. Recent win in Mexico is a big deal and just solidifies the fact the product is top-notch. The incumbent was Agfa, and two other main contenders were Carestream and Fuji. These are no small shops to go against and IMEXHS beat them. Current CTO used to be Mercado Libre's head of digital transformation - not a bad sign. Ability to raise prices 10-15% on major police and Colubsidio contracts - yet another 'not a bad' sign. It was pleasing to see Pathology contract signed outside of Colombia for the first time too. As for share register - past few months it's the retail who has been selling while institutions have been stocking up.

What to look for next, beside obvious operational profitability? I'd say RIMAB margins, AiC customers growth and better reporting, which includes clear breakdown of revenues (i.e "not yet billing"), absence of ambiguous language (i.e "commercial in confidence") and not dropping 4C on last possible day after hours. There is no need to move mountains to turn around the investment sentiment here - the major work is behind us. Decent profitable growth with excellent product offering that customers love will manifest into good investment from these levels.

Obviously, I could be dead wrong on all of the above. Hope not.