Yep, this is mostly a single concern, because if we can't increase ADAPT sales it is highly likely we will breach the EBITDA covenant in the PFG loan. However a couple of things have changed in 2018.
- The first being we recently won an IDN contract which gave us access to 1,500 hospitals starting April 1st, we are one of two suppliers for the IDN contract which is worth $5.2M pa.
- We released a curved patch for which there is no competing products.
- We entered the market in India
The reason sales for ADAPT lagged from 2016-2017 was because of code red, staff which were costing the company more than they were making were let go (most of them), the entire sales team was restructured in the US and Europe with a new sales strategy (seems to be working, with the IDN contract win).
I am optimistic that the new sales strategy is successful and we can expect sales to double this quarter as forecast because the forecast came out 20-days into the quarter already and if we hadn't been seeing sales heading in the right direction the company would have had no choice but to raise capital already (or will do in the next few days) though I'd have thought they would have done it by now with the share price increase recently.
AHZ Price at posting:
35.0¢ Sentiment: Buy Disclosure: Held
(20min delay)