VPT.V - Monetization.


Ventripoint Diagnostics Ltd. (VPT.V ) applies of AI to echocardiography. Ventripoint's VMS products are powered by its proprietary KBR technology, which provides accurate volumetric cardiac measurements equivalent to MRI. This affordable, gold-standard alternative allows cardiologists greater confidence in the management of their patients.


Coverage was initiated August 2021.


News Releases


Sep. 3 - Reports Second Quarter 2021 Financial Statements and MD&A: Cash received from exercise of warrants was $3,93M and from the exercise of options $300,626 for the 6 months ending June 30, 2021. Cash at the end of the period was $3,45M, which is enough to allow the Company to continue operations for 2 years at the current level of activity.


From MD&A : "...sold or has new orders and commitments for a total of 19 VMS+3.0 devices. New orders have not been fulfilled due to the temporary restrictions of hospitals as they deal with the COVID-19 pandemic. To date, the Company has installed six VMS+3.0 machines in cardiac centres in North America, one in UK, and one in Europe. The Company has sold and delivered three VMS+3.0 machines to its Chinese partners for demonstration and research use and received full payment. In addition, Yutian has built and installed 8 QAS machines (see Chinese Partnership section above) in China. The Company has also delivered one VMS+3.0 for 3D-echo – its software-only product, to a major European centre. This was the first sale of this product, which is able to analyze 3D echocardiograms from all major ultrasound machines."


Sep. 7 - Issues Option Grants to Consultants and Reports Options Exercise: an aggregate of 300,000 options to consultants of the Corporation at an exercise price of $0.40 cents for a term of one to two years and vesting from immediately to over 9 months. The Corporation now has 6,331,590 options available for future grants


Sep. 14 -Provides Update on Growth Initiatives and Sales: Collaboration with General Electric Healthcare Corporation: Ventripoint and General Electric Healthcare Corporation (GEHC) have made significant progress.


Expanding Product Distribution: finalizing agreements with distributors of cardiac medical devices for sales in the United Kingdom (UK) and the USA markets and in discussions with a German distributor for Germany and rest of EU.


Direct Sales Initiatives: In dialogue with major cardiovascular centres in the United States, Canada, UK and Europe to expand sales of VMS+3.0 units. The Company currently holds or is finalizing purchase orders with 11 hospitals: five in the USA, three in Canada, two in the UK and one in Europe. We expect to install these units before year-end, but this target depends on the containment of the COVID-19 pandemic which continues to hamper sales and installations.


Nineteen systems have been installed to date worldwide, with a calendar year-end target of 25 to 30 units.'


Sep. 15 - Provides Update on Clinical Studies: The Company has twelve clinical projects underway or being planned. All these studies are being funded through institutional sponsorships or grants. The Company is providing training for research staff and logistical support for these ground-breaking studies conducted by leading cardiologists.


Sep. 17 - Issues Option Grants to Consultant: An aggregate of 300,000 options to a consultant of the Corporation at an exercise prices from $0.50 to $.55 for a term of one years and vesting from immediately to over 9 months.

Sep. 27 - Announces $5 Million Bought Deal Offering of Units: 9,620,000 units for gross proceeds to the Company of $5,002,400 at $0.52 cents per units (Warrant 0.60 cents). Proceeds of the offering for product design and development, commercialization, production, sales and marketing, distribution, customer support, and general working capital.


Sep. 28 - Announces Upsize to Previously Announced Bought Deal Offering of Units to $7 Millon


Oct. 1 - Announces Filing of Amended and Restated Interim Financial Statements and MD&A


Oct. 13 - Announces Filing of Second Amended and Restated MD&A: The Second Revised MD&A was refiled to, among other things, provide enhanced disclosure of the Company’s projects, plans, expenditures made and the timing and costs anticipated to advance the Company’s projects to the next stage.


The Business Objectives and Milestones discussion in the Second Revised MD&A has been revised to include details with respect to the Company’s sales efforts and strategy, General Electric Healthcare collaboration, VMS+4.0 timing, product design and development programs, and commercialization.


Oct. 20 - Announces Closing Of Upsized Bought Deal Offering of Unit: for an aggregate gross proceeds of $8,055,060


Oct. 21 - Installs VMS+ 3.0 Unit at East Midlands Congenital Heart Centre: The second site in the UK .


Oct. 25 -Appoints Fiona Fitzgerald to the Board of Directors: Fiona Fitzgerald was employed with General Electric Healthcare Corporation (GEHC) in Canada starting in 1995 and transitioned to Cytiva (formerly GEHC Life Sciences) when Danaher Corporation bought the operating company in March 2020.


She is an experienced business leader in life sciences with a track record of success in sales, marketing, operations and R&D across three countries: Canada USA and UK/Ireland.The Company has awarded Fiona 500,000 options at an exercise price of $.50 with a term of 10 years and a vesting annually over 5 years.


Nov. 9 - Passes Audit of Manufacturing Facility for Canadian and US Markets: successfully completed a semi-annual follow up inspection of their manufacturing facility by a Nationally Recognized Testing Laboratory (NRTL).


Nov. 22 -Provides Corporate Update on Market Adoption of VMS+ Whole-heart Analysis System: Received four more orders for the VMS+3.0 whole-heart analysis systems. These units are being manufactured at the Ventripoint facility and are expected to be installed by the end of the calendar year.


These four units will be installed in leading pediatric and adult cardiovascular centres in the UK, Canada and USA and add to the existing installed base of 21 VMS+ units in Canada, United Kingdom, Europe, USA and China. The Company targeted to deploy 25-30 units by the end of 2021 and is on track to achieve this goal.


Ventripoint expects to receive additional purchase orders by year end but will not be able to install these units until early 2022 as it takes a few weeks to schedule the installation and training in a busy echocardiography clinic.


Nov. 24 - Selected by Life Sciences Ontario as 2021 Success Story


Nov. 29 - Applauds the US Government for Establishing an Additional Payment to Doctors for Analyzing 3D Heart Scans: U.S. Department of Health and Human Services (HHS) through CMS (Centers for Medicare & Medicaid Services) has approved a new compensation for doctors to analyze 3D echocardiograms.


At the recommendation of the AMA (American Medical Association), the CMS has finalized a CPT (Current Procedural Terminology) billing code (+93319) for 3D echocardiographic imaging and postprocessing during transesophageal or transthoracic echocardiography. Effective January 1, 2022, the CPT billing code can be used by doctors and hospitals to claim reimbursement from payers (Medicare, Medicaid, insurance companies, etc.).


Dec. 6 - Receives Additional Funding to Develop Next Generation of the VMS+, Whole-Heart Analysis System: Up to $0.10M from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP).


Dec. 20 - Appoints Randy AuCoin to Board of Directors: Since 2013, Randy AuCoin has been the CEO of Exact Imaging, which is the world leader in high-frequency ultrasound applied to the early detection of prostate cancer.


The company is also announcing the resignation of Peter Weichler from the Board of Directors.


Dec.21 - Expands United Kingdom Marketing with New Distribution Partner CardioLogic: CardioLogic Ltd specializes in the development, marketing, and distribution of medical devices for cardiac care and has an extensive network.


Dec. 29 - Successfully Renews QMS Certification: Completed the Medical Device Single Audit Program (MDSAP) re-certification for its Quality Management System (QMS) under ISO 13485:2016 regulations and the FDA Quality System Regulations, which facilitates design, manufacturing, installation and servicing of its products in Canada and the USA.


Jan. 7 - Announces Up-Listing to OTCQB Venture Market.


Jan. 21 - Issues Option Grants and Reports Exercise of Options and Warrants: Granted an aggregate of 1,725,000 options to directors, officers, employees, contractors and consultants with an exercise price of $0.40 and with terms from one to ten years and vesting from immediately to over 3 years; 500,000 were awarded to directors and officers.


Since the last update (see NR May 6, 2021), a total of 1,770,000 options were exercised with a weighted average price of approximately $0.22 per share for gross proceeds to the Corporation of $385,250.


Jan. 24 -Successfully Completes European Commission QMS Certification Surveillance Audit: Completed a surveillance audit of its quality assurance system under Medical Device Directive 93/42/EEC (MDD), Annex II.


This is the first surveillance audit since Ventripoint’s last full recertification (see NR March 9, 2021).


Jan. 27 -Hires Iconic Investor Relations LLC to Provide Investor Relations Services.


Feb. 2 - Appoints Dr. Gregory Skinner to Board of Clinical Advisors: Dr. Skinner is currently a Consultant Paediatric Cardiologist at the East Midlands Congenital Heart Centre in Leicester, UK and is the Clinical Lead for the Department of Paediatric Cardiology and Deputy Head of Service for the East Midlands Congenital Heart Centre.


Mar. 1 - Collaborate with The Mazankowski Heart Institute to Conduct a World-First Study of the Changes in Cardiac Function during Pregnancy: Supporting a world-first study on maternal cardiovascular changes during pregnancy, which will be conducted at the Mazankowski Alberta Heart Institute in Edmonton, Alberta, Canada.


The study is being funded by the Canadian Institutes of Health Research (CIHR).


Mar. 21 - Announces DTC Eligibility


Apr. 7 - Signs on AngioConsult/Angiopro as European Distributor: Angiopro GmbH as Ventripoint’s European Distributor for Ventripoint’s products and engaged AngioConsult, their affiliated company to tailor the marketing efforts to the different countries in the EU. AngioConsult and Angiopro are both based in Germany.


Apr. 19 - Welcomes Dr. Howard Michael Leong-Poi as New Clinical Advisor: Dr. Howard Leong-Poi is Head of the Division of Cardiology, as well as the Medical Director of the Heart and Vascular Program at St. Michael’s Hospital in Toronto, Ontario. He is also a Full Professor of Medicine at the University of Toronto.


Apr. 27 -Welcomes Dr. Jose Banchs as New Clinical Advisor: Dr. Banchs has been involved with Ventripoint’s development for the past few years and will now take on a leadership role for clinical development.


May 9 - Hires Two Strategic Sales Account Managers for US, Europe, and UK Distribution:



Summary


Orders and Commitment

September 2021; a total of 19 VMS +3.0 Devices were reportedly installed with the following splits: North America (6), UK (1), EU (1), China (3), Yitian QAS Machines (8). At the time, VPT.V was finalizing PO with 11 hospitals: USA (5), Canada (3), UK (2), and EU (1). Also reported was the target for 25-30 installed unit in 2021.


Subsequently, another install happened in October 2021 and four more orders were reported in November 2021.


These four units will be installed in leading pediatric and adult cardiovascular centres in the UK, Canada and USA and add to the existing installed base of 21 VMS+ units in Canada, United Kingdom, Europe, USA and China. The Company targeted to deploy 25-30 units by the end of 2021 and is on track to achieve this goal.


Earnings

VPT.V is still a pre-revenue company which continues to raise cash from equity financing activities.









Financing

A $5M bought deal (Upsized to $7M) at $0.52 cents (warrant; $0.60 cents) closed oversubscribed ($8M) in October 2021.


Distribution

Two distributors were added this period; i) Cardiologic (UK) ;December 2021 ii) AngioConsult (EU); April 2022. Also the GE Healthcare alliance is ongoing. As per last MD&A: As an innovator under this program, our installed base will be enhanced and will drive Ventripoint’s commercial growth worldwide by accessing GE Healthcare’s global channel.


Clinical Studies

September 2021, VPT.V reported that twelve clinical projects underway or being planned.

Specifically, five projects were underway and seven studies were still being planned.


At the time, the five projects currently underway were: 1.Normal and Abnormal Maternal Heart Function during Pregnancy, 2.Congenital Heart Defects with Septal Defects, 3.LA Enlargement as an Earlier Indicator of Heart Failure with Diastolic Dysfunction, 4. RA and RV Enlargement as an Indicator of Tricuspid Valvular Dysfunction, 5.Benefits of VMS+3.0 for Determining Optimal Point for Pulmonary Valve Replacement (PVR) in Young Adults with Tetralogy of Fallot.


The seven studies mentioned were: 1. Single-ventricle, 2. Hypertension, 3. Duchenne muscular dystrophy, 4. Acute COVID-19, 5. Long-haul COVID-19, 6.COVID-19 in elite athletes and 7. Surgical planning in valve replacements.


March 2022, a study with the Mazankowski Alberta Heart Institute (Cardiac Function in pregnancy) was disclosed.


Regulatory

A number of anouncements were made regarding succesful QMS Certification and NRTL Compliance Audits. However, the most salient was related to U.S. Department of Health and Human Services (HHS) through CMS (Centers for Medicare & Medicaid Services) approval of a new compensation for doctors to use 3D echocardiograms.


At the recommendation of the AMA (American Medical Association), the CMS has finalized a CPT (Current Procedural Terminology) billing code (+93319) for 3D echocardiographic imaging and postprocessing during transesophageal or transthoracic echocardiography. Effective January 1, 2022, the CPT billing code can be used by doctors and hospitals to claim reimbursement from payers (Medicare, Medicaid, insurance companies, etc.).


Grants

Funding of $0.1M from National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) to develop next generation of VMS+; Whole heart analysis was announced in December 2021.


Options

2.3M options were granted in the last period in three instances: i) 0.3M ($0.40 cents; Sep. 2021) ii) 0.3M ($0.50 to $55 cents; Sep. 2021). iii) 1.72M to directors, officers, employees, contractors and consultants ($0.40 cents; Jan, 2022).


Appointments

Fiona Fitzgerald and Randy Aucoin were appointed as a board members. Otherwise three new members were added to the Board of Clinical Advisors: Dr. Gregory Skinner, Dr. Howard Michael Leong-Poi and Dr. Jose Bach.


Recently(May 2022), two Sale Account Manager were hired covering the US, and UK & EU.


In short

Ventripoint Diagnostics (VPT.V) traded between $0.22 and $0.63 cents in the period. Despite a strong revenue model and sizable addressable markets, VPT.V did not deliver revenues in FY2021 but managed to raise $8M in funds.



While VPT.V met the objective of placing 25 units in FY 2021, no updates of new units were provided in FY2022.


In the past six months, VPT.V secured distributors (UK and EU) and hired its own salesforces (US and UK &EU), as well as added members to its Clinical Advisory Board. Ventripoint is also still involved with GE Healthcare, per MD&A:


The Company will continue to collaborate with GE Healthcare to result in a fully validated product, which is developed by the Company in-house and validated by GE Healthcare. The Company will require additional staff to participate in the planning of the launch of the product by GE Healthcare and to prepare supporting documentation for regulatory

submissions and marketing, as well as training and support for GE Healthcare’s salesforce.


The Company will also need additional application specialists to train and support GE Healthcare’s application specialists during sales and for aftersales support of customers. The Company is also looking for clinical sites to further validate the product in existing and new applications. Estimated costs through to Q3 2022 is $570,000 for operations and commercialization and $322,000 for product design and development


As such, while the partnership is progressing, VPT.V is doing much of the work and a launch does not seems to be anticipated prior to Q3 2021. Overall, VPT.V will spend close to $1M in ramping up its effort with GE Healthcare.


Within this context (and perhaps simultaneously) the upgrade of the VMS +3.0 to 4.0 is important to note. Per MD&A:


Upgrade to VMS+4.0 will be focused on 4D (motion) analysis and enhanced tracking and user-friendly features to accelerate analysis and optimize visualization of all 4 chambers of the heart. The new design will also significantly lower the cost of manufacturing the product. This design and development will be done by Ventripoint in-house


It is estimated that the completion of the development of the VMS+4.0 and validation, regulatory market approvals and transfer to production will occur within the next 12 months. Regulatory market approvals will be done by the Company in-house. Current facility is scaled to manufacture at least 3units/week with a full-time assembler and quality control personnel. Estimated costs through to Q4 2022 is $1,710,000 for Operations and commercialization and $966,000 for product design and development.


Again, much of the effort is in house and the cost is roughly $2.67M! This certainly explains the last Bought Deal.


Based on the financial performance in FY2021 and YTD 2022, its evident that the VMS +3.0 is facing barriers to adoptions. It may be that the demand is simply not there because the awareness of its capacities are lagging.


The way VPT.V is deploying capital in FY2022 reflects the belief that an upgrade should facilitate adoption with the end users. Key to this will be new user friendly features and expanded capabilities targetted within 12 months.



For now, Ventripoint seems to have enough capital ($9M) to execute against it goals. In addition, the warrants strike price to date is relatively distant from current valuation making VPT.V attractive towards future monetization.



DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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