4DMedical Limited

Attractive Business Model and Blue-Chip Customer Base: 4DMedical Limited (Proposed ASX Code: 4DX) is a medical technology company that is focused on commercializing its patented respiratory imaging platform, XV Technology, to enhance the capacity of physicians to diagnose and manage patients with respiratory diseases. The company generates revenue from the sale of its XV Technology software on a pay per use basis to customers and sale of its dedicated hardware products.

Initial Public Offer: The company has recently issued an initial public offering of ~76.43 million shares at the offer price of $0.73 per share to raise a total of ~$55.79 million. The expenses of the offer are currently estimated to be $4.4 million and are completely underwritten by Bell Potter Securities Limited and E&P Corporate Advisory Pty Ltd. The offer opened on 14 July and is expected to close on 10 August 2020. The proposed listing date is 14 August 2020. 

Key Dates (Source: Company Prospectus)

Financial Highlights: During 1H20, revenue of the company stood at $1.1 million and gross profit was $118k. In the same time span, the company incurred a net loss of $5.3 million.

Key Risks: The company is going public and may have limited financial resources and carries a risk of achieving profitability in the later years. Competitors in the respiratory imaging sector may minimize the ability of 4DMedical to penetrate the market and may disrupt its ability to establish product distribution and maintenance pathways. 4DMedical is not yet profitable and has historically incurred losses.

Outlook: 4DMedical’s XV Technology has several advantages that can aid market adoption. XV Technology provides a non-invasive modality for physicians to understand regional lung motion and air flow and is designed to be fully compatible with existing hospital and clinic equipment. The company has a large addressable market with attractive growth drivers. It has an attractive business model, placing the company well to benefit from the upcoming opportunities. 4DMedical is likely to have a global blue-chip customer base including recognized medical institutions such as Cedars-Sinai Medical Center, The Cleveland Clinic and The South Australian Health and Medical Research Institute.

DUG Technology Limited

Potential for Expansion: DUG Technology Limited (Proposed ASX Code: DUG) is a technology company providing high-performance computing as a service, scientific data services and software solutions for the global technology and resource sectors. During FY19, DUG had over 230 clients, including some of the largest fortune 500 companies. The company generates its revenue from scientific data analysis services.

Initial Public Offer: The company has recently issued a prospectus that comprises the issue of 19,259,259 shares at $1.35 per share to raise $26 million. The offer is not underwritten, and the minimum application size is $2,000 worth of shares. The company expects to dispatch the holding statements on or about 17 August and trading of shares will commence around 25 August. The purpose of the offer is to provide strength to the company’s balance sheet to further facilitate growth. The company will have access to listed capital markets to improve capital management flexibility and to access funds for future acquisitions and expansion opportunities.

Key Offer Statistics (source: Company Prospectus)

Financial Highlights: During 1H20, revenue of the company stood at US$26,840 and EBITDA of the company was US$5,091.

Key Risks: The company is going public and may have limited financial resources and carries a risk of achieving profitability in the later years. The outbreak of COVID-19 is having a material effect on global economic markets and may also impact the company’s products and services. The development schedule for new products or the adoption of new products may take longer than expected and thus may delay revenue streams. The company’s failure to maintain appropriate technology could cause disruptions.

Key Differentiators and Advantages: The company has some key differentiators and advantages including core competencies in high-performance computing (HPC), scientific R&D, cost-effective solutions, and potential for expansion. The growth strategy of the company leverages its competitive advantages of expertise and experience. 

Forbidden Foods Limited

IPO to Fund Sales, Marketing, and Brand Development: Forbidden Foods Limited (Proposed ASX Code: FFF) operates in the Food and Beverage Industry in Australia, producing healthy food products under three primary brands – Forbidden, Sensory Mill and Funch. Forbidden Foods’ business model is an asset-light, flexible production model that allows it to outsource manufacturing and packaging to appropriate suppliers.

Initial Public Offering: The company has recently issued a prospectus that constitutes an offer to issue 30 million shares at a price of $0.2 per share, raising $6 million. The offer opened on 22 July 2020 and is expected to close on 14 August 2020. The company is expecting that the shares will begin trading on ASX on 31 August 2020. The offer proceeds will be used primarily to fund sales, marketing, and brand development costs.

Key Dates (Source: Company Prospectus)

Financial Highlights: During FY20, the company generated a revenue of $4.11 million and a gross profit of $1.42 million. In the same time span, the company incurred a loss of $2.5 million.

Outlook: The company aims to establish and grow its market share to grow its revenues and generate profits. It is planning to launch a Funch baby food product line and expand its product development and innovation. It is also increasing its online presence and is broadening its international focus. The company supplies directly and through distributors. Each customer provides an opportunity for additional sales while reducing concentration risk.

Key Risks: Forbidden Foods’ business model relies on outsourcing key raw materials to third party suppliers and may experience disruptions to its supply chain. The company also retains a risk that it might not be able to maintain its uncontracted customers, or secure new customers, on commercially viable terms.

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