strategic review

A very interesting last line:

Company strategic review
23 May 2008: The Board of BrainZ Instruments (ASX:BZI) has begun a review of the BrainZ
business. The objective is to maximise shareholder value through evaluating strategic
alternatives including continuing the current process of organic growth, considering possible
Original Equipment Manufacturer (OEM) partnerships or integrating some or all of the assets of
BrainZ into a broader business.
Background
The BrainZ board continues to believe that the market opportunity is substantial and that the
BRM is competitive with other available bedside monitors. However, data from controlled
clinical trials comparing outcomes with or without interventions based on bedside BRM
monitoring are now not expected until 2010. Such clinical data are believed to be necessary to
drive higher sales and reach a tipping point where bedside brain monitoring of at-risk neonates
becomes a standard of care.
In this context, the company’s current cash burn is approximately NZ$200,000 per month,
versus 31 March 2008 cash reserves of NZ$3.462m.
The BrainZ board has previously announced initiatives to control the company’s cash burn
(while minimising impairment of long term prospects and competitiveness) as well as exploring
M&A opportunities.
Directors believe that BrainZ may need to change its business model to deliver value to
shareholders within a reasonable timeframe. The strategic review will therefore evaluate
alternatives including (1) integrating BrainZ into a broader neonatal business (in order to
achieve the necessary critical mass and capital), and/or (2) appropriate OEM arrangements,
and/or (3) entering partnerships with parties with an interest in specific products (such as
RecogniZe).
The current international distribution agreement with GE contains a right of first refusal in the
event that the review process results in a sale proposal for part or all of the BrainZ business.
ENDS