(OTCQB: MYDX) – MyDx Inc. is a science and technology company that owns MyDx™- which is “is a simple and affordable portable analyzer that will detect the chemicals we cannot see.” This analyser will help detect and analyse how consumers feel in direct relation to the profile of the cannabis. According to the company, “MyDx™ uses nanotechnology to accurately measure chemicals” and its aim is to make people live better by understanding the components in the food and drinks that they consume. When people are aware of the specific contents of what they eat and how it makes them feel, they can develop a diet that makes them happier overall.
Company Description
MyDx Inc. was formed by Daniel Rida Yazbeck on December 20, 2012 and is headquartered in San Diego, CA. Daniel Yazbeck is also a majority shareholder in the company – holding approximately 44.5% of the outstanding voting shares. The Company was originally known as Brista Corp. and its intention was to produce crumb rubber tile from recycled truck and automotive tires, which it later abandoned. A series of changes and merger with its wholly owned subsidiary led to the name change to MyDx Inc.
Earlier this month, MYDX had taken an aggressive position in filing a restraining order because it believed it continued to receive conversation notices when it had fully satisfied the obligations to certain convertible notes.
Management & Governance (Please note- there are not any current, known disputes within MyDx management team)
Daniel Yazbeck is the seed investor and creator of the MyDx Analyzer. He holds a Master of Science degree in Medicinal Chemistry and has almost 15 years of experience at Pfizer Pharmaceuticals and Panasonic. In his previous roles, he worked as a scientist and engineer for developing new products and forming strategic partnerships in electronics-healthcare industry. He is the Chief Financial Officer in addition to his role as Chief Executive Officer. Daniel is supported by two Vice Presidents, each heading Operations and Software Engineering. The company board of directors has seven members according to its SEC filings.
The Company has experienced a series of changes to its management which have proved disruptive and has had adverse effects on its financial conditions including but not limited to inability to timely file quarterly reports. MyDx is exposed to key person risk.
Industry Overview & Competitive Positioning
The biotech industry is extremely volatile because of the nature of significant scientific expenditure and operations that are required to develop a product from initial stage to market. The industry emerged in the early 1970s and the primary purpose is to improve and enhance the quality of human life. The players range from traditional drug manufactures to medical endeavours for via creation and combination of DNA, to discovery of treatments and therapies for diabetes, cancer and other range of diseases.
MYDX is focused on developing a technology that analyses the effects that our consumption (food, drugs, alcohol) has on us, and this information will “Empower you to live a healthier life by revealing the purity of what you eat, drink & inhale in the palm of your hands and in real time”.
As demand for high quality cannabis extracts continues to rise and the legal marijuana sector expands, the industry revenue is expected to increase
Investment Risks
In addition to general market risks, the following are specific risks to an investment in MyDx Inc.:
- Liquidity Risk: Being a penny stock, the shares have low liquidity and large bid asks spreads. Investors will not be able to readily sell their shares and the market price might be negatively affected.
- Going Concern Risk: It is an early-stage company with very limited operating and financial history and no current revenue generating product. The company expects to continue to sustain losses and it is no certainty that it will generate revenues in the near term.
- Financing Risk: The company currently has low cash balance and it is unlikely to procure additional funding at favourable financing terms. This will greatly hamper the ability to continue to develop MyDx™ to commercial viability.
- Obsolescence Risk: The technology industry is rapidly developing and changing. If a new technology is developed by another firm during the development stage of MyDx™, the effect would be negative on MyDx Inc and the Company may be unable to compete effectively.
- Abandonment Risk: Given that the Company has a history of abandoning its original business plan, unforeseen hurdles may cause it to change or abandon its existing business plan.
- Third Party Risk: The Company depends on specific manufacturers, and distribution channels and it does not appear that there are any long-term purchase or service agreements with these third parties.
Earnings Review
MyDx Inc revenue for Q32016 was $134,240 (2015Q3: $219,180), a decline of 39% quarter on quarter.
Net loss continues to be volatile and similarly, net cash flow from operations has continued to remain negative. The Company has however been conscious to reduce its cash burn by over 80% and secured a five-year initial $2.5m licensing deal with a partner in China to distribute its two new sensors – the two new sensors launched were AquaDx™ and OrganaDx™ sensors. Its first app, the CannaDx™, was also one of the top apps on the Apple iOS App Store Charts.
Stock Performance
Source: StockCharts.com
As of close of business on March 27, 2017, MYDX shares closed at $0.02 on a traded volume of 126,207,215. The stock gained $0.0041 from its previous day close, an increase of 23.98%. The current market cap is $9.66m.
On March 17, 2017 the company announced that it has resolved its key liabilities position and is poised to unlock its true value as it now focuses on the next phase of its business – “to use Community driven data to develop unique formulations for the Cannabis Market”.
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