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DALLAS, TX / ACCESSWIRE / July 26, 2021 / Nanalysis Scientific Corp. (TSXV:NSCI): The full report can be accessed by clicking on the following link:http://stonegateinc.com/reports/NSCI.V Initiation.pdf
Nanalysis Scientific Corp., develops, manufactures, and sells compact nuclear magnetic resonance (NMR) spectrometers and magnetic resonance imaging (MRI) equipment. The Company has a 10-year history as a global developer and supplier of portable nuclear magnetic resonance spectrometers for the industrial instrumentation market. Its products enhance analytical capabilities in quality control, research, teachings, and industrial environments through increasing availability of high-resolution NMR testing at fractional pricing in portable benchtop tools. The Company sells its products globally and is headquartered in Calgary, Canada. Furthermore, management notes that 30% of shares are held by employees.
Unique technology platform looking to disrupt the market - Many NMR systems are large, expensive, complex, unsafe and often environmentally unfriendly. Additionally, there are many industries that have a "traditional" way of analyzing samples, based on a technique or instrument(s) that have often excluded NMR based products due to limited access to NMR systems. While the scientific instrumentation market has been transitioning slowly toward smaller, compact systems, the market remains ripe for disruption. Nanalysis, through its proprietary, innovative product lines, is addressing unmet needs of customers in a variety of applications and industries. Nanalysis product is compact, inexpensive, simple to use, as safe to operate as a laptop, and environmentally friendly.
Large market opportunity - According to SDi's 2021 Global Assessment Report, the scientific instrumentation market will exceed $69B in 2021 and is expected to grow by over 5% per year. Furthermore, about $1B is spent on NMR testing equipment. Management believes the NMR market can grow by several billion dollars per year over the next five years driven by (1) the miniaturization of the technology should expand its use in many additional laboratories leading to standardization; and (2) new, industry specific applications that in the past, did not use scientific instrumentation.
Nanalysis' products are patent protected - Importantly, Nanalysis products are patent protected and uses proprietary hardware, software, algorithms and are further secured by technology know-how and trade secrets. These protections were developed over the past 10-15 years via its innovation, customer feedback, and manufacturing experience.
Growth strategy points to further growth - The Company's strategy is focused on organic growth and supplemented with M&A. On the organic side, Nanalysis will focus on innovation of new, best-in-class products and seek additional OEM relationships to collaborate and jointly develop new analytical solutions. The M&A strategy will seek tuck-in type acquisitions of complimentary business to drive scale economics such that the whole is worth more than the sum of its parts.
Strong sales backlog - At the end of Q121, Nanalysis has a backlog of 22 units of the 100 MHz NMRs, after sales of 6 units in Q121. On the balance sheet, unearned revenue grew from $2.9M at Q420 end to $3.9M at Q121.
Valuation - Given the early ramp in revenues, we are using an EV/S multiple analysis. Based on our F22 revenue estimate, we arrive at a valuation range of CAD$1.25 to CAD$2.95, with a mid-point of CAD$2.10. See page 6 for further details.
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
Stonegate Capital Partners
SOURCE: Stonegate Capital Partners
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