Imaging3’s (IMGG) Potential Coming Into View
Like golf, trading small caps is not a game of perfect. I’d estimate only about half of all small cap companies have a shot at really thriving. But man, you get the right idea at the right time (like a medical equipment breakthrough), and poof - you have one of those small cap success stories where the unknown venture becomes an overnight sensation. Now, I’m not saying Imaging3 (OTCBB: IMGG) is going to be one of monster-sized small cap winners, but I am saying I think this stock has the potential to be one of those stories.
To give credit where credit is due, one of our readers actually turned us on to the idea. Jim (the same guy who liked Biosolar) pointed out about Imaging3…
Imaging3 is a developer of a breakthrough medical imaging device that produces 3D medical diagnostic images of virtually any part of the human body in real-time. They have created a device called the Dominion Volumetric Imaging Scanner . According to the manufacturer Imaging3, Inc, their newest product, the Dominion Volumetric Imaging Scanner or DVIS, utilizes between 100 to 1000 times less radiation than a standard CT scan. This is a major announcement in light of the new findings regarding emitted radiation in CT scans. Remember, right now people are afraid of radiation. A device that can do 1000 times less, is cheaper and does 3d in real time, not like those other companies that say they do real time but dont, is a really good medical stock to own.
Sounds reasonably encouraging to me, though I’d never pretend to be a medical imaging expert. Anybody out there with an unbiased sense of whether or not CT radiation is a big enough problem to solve with new equipment? For that matter, does anybody in the field really know if the difference between CT and real-time DVIS scans is worth buying into?
Anyway, based on what I personally know about imaging diagnostics and what I read above, I do think there’s something interesting here. My interest is particularly raised by the fact that Imaging3’s technology was only recently unveiled. They contacted the FDA in June, and presented the first prototype in October. In other words, the company’s fiscal past may not reflect what they’ve got to work with in their fiscal future.
More ‘bigger picture’, that’s the stuff that small cap dreams are made of…an unknown, underestimated company.
Unfortunately, I really can’t tell that Imaging3 is sitting on a mountain of demand. Are sales up? And if so, is it because of the Dominion scanner? We have no ‘proof of life’ just yet. Do we even have a reasonable sales forecast or estimate? (So far the asnwer to all those questions is ‘no’, but the floor is open to your input.)
The chart looks ‘challenged’ too…which is my nice way of saying it looks like crap as of right now.
Things change though. Companies change. I think the premise of the trading idea merits a closer look, even if the promise of the company is over-estimated. I consider Imaging3 and IMGG well worth watching. A move above 17 cents may be a buy signal, provided the company backs up the move with real results.
Like I said though, I think Imaging3 is easily worth keeping an eye on. The market cap is only $29 million, so it wouldn’t take much for this company’s revenues to reach more than commensurate levels (compared to other diagnostic equipment stocks).
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Just wanted to give you a first shot of what was announced this morning. Imaging3 is on it way. Still Undervalued but could be big as news gets out. Even a partial approval is big news.
Imaging3 Receives FDA Approval to Distribute the Dominion Vi Scanner Under FDA (IDE) Regulations.
http://biz.yahoo.com/iw/080402/0382828.html
Editor’s response: Thanks for the note. Anybody following this story should take a look….a step in the right direction.
Comment by Katie — 4/2/2008 @ 7:40 am
A bit of follow-up to my 3/9 posting:
Again- I believe an investor in this company should be looking to the physician community to see how this technology is being received. Radiologists, Neuro surgeons, Orthopedic surgeons, Cardiologists. Make no mistake: It is the physician who drives each major purchase in a hospital or clinic or imaging center whether they own it or not. Any substantial endorsement from any of those specialties would be encouraging news.
3Dimensional imaging is a bit overated. As was color imaging- a fad that many people saw on national geographic magazine some years ago. I even rememeber a patient who refused to pay for their MRI because it wasn’t done in color. Color is useful in limited specific applications like ultrasound doppler (Blood flow) studies, and I believe in some PET (Nuclear imaging function studies.)
Routine CT, like MRI, images in cross sections- like slicing a loaf of bread. It is a 2D picture, but has the primary benefit of a 3D image- the ability to see an anatomical structure free and clear of the super imposition of other structures. For example- a routine chest X-ray- the heart is obscurred by ribs, vessels, spine, fat and muscle- all of which obscurre the heart and limit the diagnostic value of the image.
The product was demonstrated at the RSNA last year- Perhaps even a year or two before that I don’t know- and that is the big boy of trade shows for diagnostic equipment on the planet- but I am having a hard time finding any buzz on the internet from any group related to imaging or medicine in general- I see a lot of buzz on finance/investor related sites which means about nothing. (no disrespect intended.)
I would like to see the company educate me on where I am wrong- a discussion like that could only benefit penny stock investors- perhaps even the company itself.
Thank-you
Editor’s reponse: No offense taken. We want the same thing you want, which is some sort of explanation about why this is a big deal. It seems great to us, but is it marketable enough to make for a great investment? I’m not a doctor or a patient, so I don’t really know.
To that end, the company acknowledged that they had received our question (your question), and wanted to answer it wholly. I don’t know by whom or how it will be answered, but I do think they’ll respond. Who knows - maybe they’ll have that ‘aha’ answer.
Comment by mark — 3/11/2008 @ 9:42 am
This unit will not replace a CT scanner- the radiation dose discussion is not an apples to apples- If I am wrong I ask the company to correct me. This unit does not effectively soft tissues (Like brain, organs) in other words 95 percent of what a CT scanner images. This unit does well with bone it seems, but routine bone imaging is low dose, and using this unit for a routine fracture is like bringing a bazooka to a fist fight. Pain management (Vertebral Spine injections)are generally done effectively with routine fluroscopy- a piece of equipment most hospitals/clinics already own- higher dose probably than what this unit delivers, but a lot less than CT and generally not an issue. From where I sit, the predominant application for this is vascular imaging with iodine injected contrast- brain/neck/cardiac- but 2 out of 3 are done pretty well with MRI which has no radiation dose, a safer contrast than the iodine based solution this scanner needs. I guess that leaves the heart- maybe. I look forward to being corrected if any radiologist out there will venture an opinion. That is specifically the type of endorsement an investor in this company would want to see- or a cardiologist.
Editor’s response: I can’t answer most of those questions or respond to the comments…I just don’t know. I have forwarded the note to the company though. I’ll post in the blog whatever they come back with.
Comment by mark — 3/9/2008 @ 4:52 pm
Answer to #2 question. I found this for you, thought you’d be interested.
Here is the Answer from CEO Dean Janes to a question about revenue
…Service will be provided by distributers throughout the country, some of these relationships already exist with our existing products. Others will be developed per region and trained and supported by Imaging3 employees. In certain instances technicians will fly out from California, but only major problems. This is a tried and tested approach used by many companies which had to grow into sales and support in the US, Toshiba being one of my favorite examples and a previous empoyer of mine.
Service is also very lucrative in the medical field as service contracts typically cost 10% of the purchase price with product life expectancy between 5 to 10 years depending upon who you talk to. So if we sell a $500k high end system, we have the potential to earn another $500k over ten years, excluding the warranty period which is one year.
The Dominion™ with full features will cost less than $550,000. The x-ray tube it uses will cost less than $10,000. Compare this to the cost of a new multi-slice CT that can be used only for diagnosis (no surgical applications). Add to it the cost of the x-ray tube the CT uses. Consider that you will have a new tube almost every year. When the Dominion™ rivals the performance of CT, can do far more, and costs far less – why would you need anything else?
Keep up the good work. You truly found an undiscovered Gem here.
Thanks
Betty
Editor’s response: Thanks Betty. All good stuff.
Comment by Betty — 1/8/2008 @ 9:27 pm
I just saw a demostration of the machine on youtube. It is very interesting that this is the only machine out in the industry.
Editor’s response: Based on my limited understanding of such devices, I agree. However, after talking to the company, I can understand why. They’ve filed a patent and 50+ addendums…none of which was even challenged. It’s very rare to see a high-potential patent go unchallenged by anyone. When I asked why, the company said the technique was just that unique. (All the engineers who’ve looked at the invention’s technology had a ‘why didn’t I think of that?’ moment when they got an explanation of how and why it works.) So, the company really does look like it’s protected for a couple of decades.
Comment by Tom — 1/7/2008 @ 10:39 am
Concerning Imagging3, revenue potential, outside of direct sale revenue is the maintenance revenue, estimated to be equal to the 500K acquisition cost over the equipments 10 year life span.
Editor’s response: Hmmm, I hadn’t heard or thought of that - and the company didn’t say anything about it to me either. That’s high-margin stuff too, if that really is a possibility. Where’d you get the info/insight? I saw nothing on the company site about that potential revenue stream either. Powerful stuff.
On a side note, the margins on a $500K piece of equipment are usually pretty good, especially when it’s a medical device.
Comment by dayneyus — 1/7/2008 @ 1:20 am
A quote from a concerned investor”
Yes, there is a huge problem out there with radiation induced cancer.
Chest CTs have perhaps a 1/1000 chance of inducing cancers,mainly thyroid, blood and breast.
That may not sound like much, but there are so many CTs done every year, that it is a big problem, expecially when one considers the need for multiple XRs in each patient.
The public and most doctors are still acutely unaware of this problem.
But there will be a big stink about it sooner or later.
And IMGG will be sitting in the sweet spot.
I imagine there will be a lot of suits and class actions.
JMO
Bob
Editor’s response: Thanks Bob. Well, there ya’ go.
Comment by BOB — 1/4/2008 @ 8:40 am