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THERALASE BUSINESS PERFORMANCE RATING: 78%

May, 2016

RATINGS (1-10)

ASSET PERFORMANCE FACTORS

BLUE SKY  9

These are both brand new products

There are laser therapeutics already in use by competitiors, though they claim their’s is superior I didn’t see any evidence in the presentation that their’s is superior to competitor’s The cancer drug is novel

COMPETITIVE AND INTELLECTUAL PROPERTY RISKS 8 They have patents on all of it As discussed above, there are competitors already in the laser therapeutics division To me, it sounds as though other companies could copy the approach to laser cancer treatment, since the mechanism by which their drug targets the cancer cell is well-described.  And I suspect a bright scientist can figure out how to make a cell with a light-activated mechanism

PRODUCT MIX 4

I like that one product has a currently cash-flow positive characteristic, which will support the clinical tests on the Laser cancer division I also like the diversification They have only 2 products, one of which is not ready for commercialization

PRODUCT VALUE 8

I didn’t see any proof that the laser therapeutic is superior to competitive products I did see great evidence that the cancer treatment is effective

 

EXTERNAL FACTORS

MARKETPLACE 10

The market is huge for both, and growing

PEER VALUATION 10

The stock is cheap given its potential

BUSINESS STRATEGY 10

Their strategy is sound, especially building a direct sales force

 

INTERNAL FACTORS

MANAGEMENT 9

Management knows it’s stuff

G&A is 6% of MV, which is high, but to be expected given the R&D and sales Insider ownership is a sizeable 7%

CAPITALIZATION AND FINANCIAL STRATEGY 4

Overhang is high, at 35% or so.  I’d prefer it under 25% Cash will last a year or less They will need to raise equity at low 0.30 cent prices

MARKETING AND OPERATIONS 6

They will need to build a direct sales force, which will be expensive

 

 

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