IBEX Technologies Inc. (IBT.V) manufactures and market enzymes for biomedical use internationally. Clients include manufacturers of medical devices, quality control labs and academic research institutions.
The company offers high purity enzymes for in-vitro diagnostics and ELISA kits for osteoarthritis research. In addition, IBT.V also provides lyophilization services, custom fermentation services, and has a few patents.
Coverage was initiated on November 2018 with a note June 2019. Below is an update.
Nov. 7 - Reports Results for the Year Ended July 31, 2019.
We expect to see revenues in Fiscal 2020 to be roughly equivalent with Fiscal 2019, however, with the closure of the Iowa facility, there will be a substantial reduction in expenses, and we are projecting a small positive EBITDA for the year. Dec. 12 - Reports Results for the First Quarter Ended October 31, 2019.
“We were pleased to see that sales returned to the year ago level, and that the earnings-effect of the closure of the Iowa facility are beginning to be realized somewhat earlier than predicted”, said Paul Baehr, IBEX President & CEO.
Jan. 27 - Grants Stock Options (455,000) to Board Members and staff. The stock options have an exercise price of $0.135, representing the closing price of IBEX’s shares on the TSX Venture Exchange on January 22, 2020 valid for 10 years.
Mar. 26 - Reports Results for Q2 Ended Jan 31, 2020.
COVID-19
” IBEX will continue with the production of reagents and components for critical care diagnostic tests, as long as our staff are healthy” said Mr. Baehr, “and along with existing inventories, we expect to be able to fulfill customer demand”.
Subsequent Events
Accepted an offer from a third party to purchase the land, buildings, and equipment in Iowa. The transaction is expected to close on May 1, 2020 subjected to normal closing conditions. If the sale is completed as is, the Company will record an impairment of approximately $100,000. From an operational point of view, the Company expects an annual reduction in expenses of approximately $170,000 USD per annum as a result of this sale of assets.
As previously reported, the production of all major products which IBEX acquired during the purchase of BRP have been moved to Montreal and represent an important augmentation to the IBEX product portfolio. Summary
Since the last note (June 19, 2019), IBT.V issued four new releases and valuation fluctuated between $0.09 and $0.165 cents. IBT.V closed today at $0.125 cents. In essence, receiving virtually no premium for the development since.
A quick look at earnings below indicates that this represent a dislocation from the bottom line.
For the last three quarters, IBT.V has consistently delivered $1M in revenue and has been approaching profitability. Moreover, the cash position has increased significantly in Q2 from Q1 (17%). Yet, valuation has remained stagnant even as it continually reports having "sufficient funds to meet its obligations and planned expenditures" for the next 12 months.
The selling the Iowa facility also appears to be discounted. The anticipated reduction of expenses ($0.175M) are larger than the expected recorded impairment ($0.100M). IBT.V remains operational as an essential service. Also noted:
The Company continues to work on a number of new heparinase-containing clinical device projects with its key customers, some of which may result in additional revenues in Fiscal 2021 and beyond; however, as with all developmental projects, we cannot give any assurances that any of these will come to market and produce significant revenues.
On its business overview, IBT.V outlines a few "Selected Diagnostic Partnership". Haemonetics, Abott Point of Care, TEM, Medtronics and Siemens are well known entities in this space.
While IBT.V trade sporadically with low volume.it is well positioned for additional valuation if it turns decisively profitable. As the net earnings for the last three quarters indicates, its almost there.
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