Company Update (March 24th, 2015)
POSITIVE ID CORP. Current Price (03/24/15) 52-Week High 52-Week Low Beta Average Daily Volume (sh) Shares Outstanding (mil) Market Capitalization ($mil) Annual Cash Dividend Dividend Yield (%)
PSID
Research Summary
$0.027 $0.13 $0.02 1.19 2,732,130 159.1 $3.2 $0.00 0
We are maintaining our Speculative Buy rating and moving our (12-month) price target to $0.25 per share from $0.16 per share due to the positive outlook for M-BAND and Firefly DX product lines. The positive revenue guidelines, increase in product backlogs and introduction of new version of Firefly DX product will drive the future of PositiveID resulting in a higher stock price.
Risk Level * High Type of Stock Small-Growth Industry Medical Laboratories and Research * Definition / Disclosure on last page
About Positive ID Corp. PositiveID Corporation, headquartered in Delray Beach, FL, develops molecular diagnostic systems for bio-threat detection and rapid medical testing through its California-based MicroFluidic Systems subsidiary. The subsidiary is developing fully automated pathogen detection systems and assays to detect a range of biological threats.
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Company Overview
PositiveID Corporation (OTCQB: PSID) is an emerging growth company and developer of biological detection and diagnostic systems for America’s homeland defense and the global healthcare market. PositiveID specializes in the development of microfluidic systems for the automated preparation of and performance of biological assays in order to detect biological threats and outbreaks, whether airborne, in a healthcare setting, or at the point of need. PositiveID develops biological detection and diagnostics systems, including its M-BAND and Firefly Dx systems, which use real-time polymerase chain reaction (PCR) chemistry. PCR amplifies a sample’s DNA and copies it billions of times. PCR is used every day to diagnose diseases, identify bacteria and viruses, and for many other applications. With real-time PCR, the amplification of the DNA can be measured as it occurs, thereby speeding up the ability to deliver results. Real-time PCR is one of the most sensitive and specific bio-detection capabilities available today. M-BAND: PositiveID is focused primarily on its M-BAND airborne bio-threat detector, which was developed under contract with the U.S. Department of Homeland Security (“DHS”) Science & Technology directorate, and its Firefly Dx system, which is designed to deliver molecular diagnostic results from a sample in less than 30 minutes at the point-of-need, using a portable, handheld system. The Company’s M-BAND detection system continuously and autonomously analyzes air samples for the detection of pathogenic bacteria, viruses, and toxins for up to 30 days. Results from individual M-BAND instruments are reported via a secure wireless network in real time to give an accurate and up-to-date status of field conditions. M-BAND performs high specificity detection for up to six organisms on the Centers for Disease Control’s category A and B select agents list. Firefly Dx: The goal of the Company’s Firefly Dx is to provide real-time, accurate diagnostic results using PCR chemistry in a handheld device, thereby leading to treatment scenarios at the point of need that are not possible with existing systems, which require lab-based equipment and can take hours or even days to provide results.. Firefly is being developed further for a broad range of biological detection situations for applications including military, agricultural and healthcare. This new patent application covers a PCR device to provide test results in less than 20 minutes while still using standard laboratory volumes and processes in an automated cartridge. The system has already demonstrated the ability to detect and identify other common pathogens and diseases such as various strains of influenza, E.coli, methicillin-resistant staphylococcus aureus (“MRSA”) and human papilloma virus (“HPV”). Market Potential Globally, the PCR market has been growing at a rate of over 10% annually according to a report from IBISWorld. Industry firms have thrived as technological advances have facilitated new discoveries and ignited higher demand from firms in the pharmaceuticals and agricultural sectors. Firefly Dx is targeting the global PCR market, which is projected to reach approximately $27.4 billion this year, according to a Research and Markets’ report Polymerase Chain Reaction (PCR) - Products/Tools - A Global Market Watch, 2009-2015. Firefly’s applications include point of need monitoring of pathogenic outbreaks (such as Ebola, influenza, Dengue Fever, etc.), agricultural screening in both domestic sectors and developing countries, and for the detection of biological agents associated with weapons of mass destruction.
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Reasons To Buy New Contracts fueling the Growth On October 10 2014, PSID in conjunction with its partner, ENSCO, Inc., has been awarded a SenseNet Program contract from the U.S. Department of the Interior on behalf of the U.S. Department of Homeland Security Science & Technology Directorate. As part of this engagement, PositiveID will offer its Firefly Dx system, which is a point-of-need system designed to deliver molecular diagnostic results using real-time PCR (polymerase chain reaction) chemistry. The Company shipped three M-BAND systems to Aberdeen Proving Ground in Maryland for testing as part of the JUPITR program. The new contracts and engagements with the US government will definitely bring lots of credibility to PositiveID products line. Optimistic Financial Outlook PositiveID management has issued a revenue guidance through the end of 2015 of $4-10 million (combined between 2014 and 2015). Indeed at the midpoint of the company’s guidance, PositiveID would generate sales of $4.5mn, ahead of their estimates. This lowers the risk profile and improves the odds of stock appreciation going forward. The financial outlook looks stable and management is confident to achieve the financial target. Product Innovation: Firefly Dx PositiveID has completed the design of the second-phase (bench-top) prototype, the first major milestone in the development of the Firefly Dx second-phase prototype. With the completion of this design, the Company has begun to build the second-phase prototype of Firefly Dx, a real-time, handheld, polymerase chain reaction (PCR) pathogen detection system, which it expects to complete during the first half of 2015. Firefly Dx is designed to be a simple-to-use device that provides lab-quality, real-time PCR results anywhere, anytime, within minutes to save lives. The portability of one of its kind of diagnostic equipment makes it one of the favorite in the market. Strategic Investor PositiveID had entered into a strategic financing of $4 million that would enabled the company to bring its Firefly technology to field testing and commercialization. This transaction provides the company with the required capital to get the development of Firefly product to the next critical stage of development, ultimately enabling them to bring this product to market. The involvement of strategic investors bring credibility and trust to PositiveID. Increase in order backlog PositiveID has shipped M-BAND systems to the Korean peninsula and Aberdeen Proving Ground in Maryland for continued testing as part of the JUPITR program. The contract had a total value to PositiveID of $1 million. PositiveID is preparing additional M-BAND systems for deployment to monitor air samples for potential bio threat for addressing the interest from the federal government, specifically DoD and DHS, in bio detection technologies. The company has a product backlog of $3.5 million. Company’s Financial PositiveID reported revenue of $325,000 for the quarter ended September 30, 2014, and $745,000 for the nine months ended September 30, 2014, from an agreement with a large government contractor to support a contract for the U.S. Department of Defense to support the Joint United States Forces Korea Portal and Integrated Threat Recognition (“JUPITR”) Program.
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The Company announced the acceleration of its Firefly Dx prototype development and engagement of Infinite Vision, an engineering development and contract manufacturing firm specializing in medical and biotech products. Valuation PositiveID stock lagged behind its peers and market as a whole resulting in negative return for past 12 months. The company is a growing and with a strong product line the stock is destined to bounce back. Recent trading in the market for PSID has begun to pick up steam as above average trading volume has seen this stock as high as $0.029 just a few days ago. The stock has a history of making big moves and seems always be to one press release away from another significant run. Currently trading at a $4.44 million market valuation PSID boasts a loyal shareholder base that is sure this one trades higher. We agree.
Disclosures and Definitions The analysts contributing to this report do not hold any shares of PositiveID. Statements about PositiveID’s future expectations including, without limitation, the likelihood that the total contract value of the next generation BioWatch system is estimated at more than $3 billion over five years; the likelihood that Firefly is being developed to meet the growing need in healthcare and molecular diagnostics markets for rapid and accurate point-of-need diagnostics that will enable hospitals, physicians and other providers to save more lives; the likelihood that Firefly would enable accurate diagnostics leading to more rapid and effective treatment than what is currently available with existing systems at a far lower upfront cost and cost per test; the likelihood that the Company will enter into agreements with one or more large government and commercial partners in the first half of 2014; constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and PositiveID’s actual results could differ materially from expected results. Additional information about these and other factors that could affect the Company’s business is set forth in the Company’s various filings with the Securities and Exchange Commission, including those set forth in the Company’s 10-K filed on April 16, 2013, and 10-Qs filed on May 20, 2013, under the caption “Risk Factors.” The Company undertakes no obliga- tion to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law. Ticker Research is a WFWS Consulting company, WFWS. WFWS has previously received 150,000 144 shares from Positive ID Corp. for the purpose of increasing public awareness of PSID. WFWS has received one thousand dollars cash from Hanover Financial for this update. Buy – The growth prospects, degree of investment risk, and valuation make the stock attractive relative to the general market or comparable stocks. Speculative Buy – Long-term prospects of the company are promising but investment risk is significantly higher than it is in our BUY-rated stocks. Risk-reward considerations justify purchase mainly by high risk-tolerant accounts. In the short run, the stock may be subject to high volatility and could continue to trade at a discount to its market. Neutral – Based on our outlook the stock is adequately valued. If investment risks are within acceptable parameters, this equity could remain a holding if already owned. Sell – Based on our outlook the stock is significantly overvalued. A weak company or sector outlook and a high degree of investment risk make it likely that the stock will underperform relative to the general market. TICKER RESEARCH • FINANCIAL REPORT TICKER RESEARCH • FINANCIAL REPORT
