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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Verisante Technology Inc (CE) | USOTC:VRSEF | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.005 | 0.00 | 01:00:00 |
Field Testing Ongoing / Rodman Presentation
Brian Marckx, CFA
Q2 Financials
Verisante (V.VRS / VRSEF) filed their Q2 2012 financials for the period ending 6/30/2012 in late August. Operating expenses were $669k, down slightly from the $773k in the year-earlier period. Net loss and EPS were $659k and ($0.01) compared to $759k and ($0.02) in Q2 2011.
Cash burn remains very much in-line with our projections. Management continues to manage capital well, keeping operations lean while continuing to make meaningful progress with product development and pre-launch marketing and investor-awareness activities.
Cash burn (including capitalized R&D) was $1.4 million and $2.6 million in the three and six month periods ending 6/30/2012. VRS exited Q2 with $3.5 million in cash and short-term investments.
Field Testing Ongoing
Verisante continues to make progress with field testing of Aura and last week announced that they placed more beta units in Canada for that purpose. The device is now or has already been tested by doctors and consenting patients in British Columbia, Alberta and Ontario. VRS notes that they expect field testing to continue over a period of about 2 - 4 months during which data and feedback will be collected and used to make any necessary final refinements to usability and the software. This is expected to be the final step prior to commercialization of Aura.
Rodman & Renshaw Presentation
Thomas Braun made a presentation at a Rodman & Renshaw conference held in NYC last week where he outlined the key competitive advantages of Aura and summarized the company's near-to-mid term commercialization strategy. Some of our key take-aways, which mostly relate to timelines, include;
o Canada: device sales commence in late 2012. Disposable end-cap sales begin early 2013. Service contract revenue begin early 2014.
o Europe/Australia/New Zealand/S.Africa/Mexico/Brazil: device sales commence in late 2012. Disposable end-cap sales begin early 2013. Service contract revenue begin early 2014.
o U.S.: device and disposable sales begin late 2014
Valuation
We continue to model an initial launch in late 2012 with an immaterial amount of revenue in the current year but showing a steep ramp throughout 2013. We had previously modeled Aura to launch in the U.S. in late 2014 but given the slight delay in the IDE process (initially an IDE meeting was expected earlier in 2012), we have pushed back our assumed U.S. launch of Aura from late 2014 to mid-to-late 2015 (slightly more conservative than management's late-2014 guidance, which provides some cushion for further delays). Updates to our model mostly effect years 2014 - 2015 with a much more muted impact over the longer-term.
As commercialization (ex-U.S.) is now expected to be a near-term event, we are now using DCF as our valuation methodology. Key inputs to our 10-year DCF model include a 10% discount rate and 2% terminal growth rate. Our DCF model values VRS at about $2.70/share (which is very much in-line with our prior valuation of $2.60/share).
Please visit scr.zacks.com to access a free copy of the full research report.
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