Testing Kit Technically Speaking
COVID-19 testing kit companies continue to move in the markets. We mentioned $SONA last week and now turn our attention towards MedMira (MIR). MIR is a medical devices company who have access to the US market through Webb Diagnostics. A series of news articles found here on the Webb website show the recent progression and that the two companies are awaiting FDA approval. As a result $MIR has direct exposure to US as well as Canadian investors which may make it an attractive choice. Technically this hourly chart looks to have potential:
This hourly chart makes MIR look like a solid swing play. Indeed, we have been swinging MIR multiple times with entries in the .20s and exits in the mid .30s. However, the next chart shows that this one may explode once again:
Given that MIR and Webb are currently awaiting FDA news it is not surprising to see this period of consolidation with high chance to move. As a result of seeing these technicals we looked further into the fundamental structure of MIR which did not yield great results. As of FY2020 ended January 31st the company does not look to be in good condition financially:
- 658,364,320 outstanding common shares and 5,000,000 Series A shares at 0.33 a piece gives a market cap of ~218M. However, company has the option to issue unlimited common shares at anytime which is dilution potential.
- FY2020 operating loss of 1M with only $155K cash on hand
- Negative cash flow of 0.6M
- 6 short term loans in default totalling 9.3M with total commitments of 17M. Debt is currently in negotiations for restructuring.
It was also found that a walloping 70% of the shares are owned by On Site Lab Holding AG which is a Swiss investment holding company. As a result this company is the controlling shareholder and also has a doctor on the board of directors.
COVID-19 Testing Kit Comparison
Unlike SONA neither MIR nor Webb have disclosed the price of their kits. They have also not mentioned their production capacity or ability for expansion. What we do know is that they are working on a rapid vertical flow kit (RVF) whereas SONA is optimizing their lateral flow kit (LF). MIR has mentioned the benefits that RVF have over LF in a chart listed on their website but we suspect this is simply to give them the competitive edge. Furthermore the differences in speed and readability do not seem to be massive in comparison to other tests currently being used on the market; we have all seen the inaccuracies as well as the lengthy test times from multiple news outlets.
The Bottom Line
The bottom line in all of this is that as a long term investment MIR would absolutely need to capitalize on their kit during this pandemic to even stay afloat. As previously mentioned it has been excellent for swing trades but the lack of transparency with respect to distribution and the financials take away from this stock’s merit. Thus some of us have reduced our core positions but we still believe