Thursday, April 28, 2016

ePAT backdoor listing into MinQuest Limited (MNQ)

With the resources downturn we've seen a raft of the junior explorers complete "vend ins" whereby acquiring a target company by issuing a lot of scrip and raising funds to survive.  Originally there was a lot of money to be made in this area however it became saturated and lost it's gloss.  Tech vend ins are slowing up.  Now we are going through the Lithium vend in or acquisition craze.

One recent tech vend in that came up on my radar which I believe will buck the trend and do well is ePAT (Electronic Pain Assessment Technology).  MinQuest Limited (MNQ) announced the acquisition of this company on the 22nd of April.

Under the agreement MNQ will acquire the company by issuing 373 million consideration shares which will be held under a two year escrow period.  MNQ has completed an interim capital raising and will go on to raise a further $3million post consolidation.

ePAT is a smartphone based app that applies facial recognition technology by taking a video of the patient and then determining presence of pain by analysing the facial expressions.  The app is especially useful for assessing pain in patients that cannot communicate like infants or those with dementia.  The ease of use of the app should result in cost savings for healthcare areas like hospitals or aged care facilities.

ePAT is being compared to another healthcare app in ResApp which a patient breathes into a smart phone and the app can detect respiratory problems.  ResApp Health Limited (RAP) has gone on to be a bit of a market darling with it's share soaring from about $0.02 to $0.27 recently in under a year (market capitalisation currently is $105million)

In regard to the trading action, MNQ shares spiked to $0.022 and settled back to $0.016 on the first day of the news.  Unfortunately, a major shareholder, Magna has been the source of the heavy selling.  Fortunately, the convertible note conversions, which has resulted in shares being issued to Magna and sold into the market will be repaid.  Supply should start to decrease after this which will be a positive.

MNQ last traded at $0.019.

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