Houston We Have goes shopping, shares briefly double
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Data analytics company Houston We Have (ASX:HWH) announced a new acquisition this morning, and its shares ripped higher.
The company announced it has acquired medtech platform ECHO IQ, which operates a predictive AI model focused on the prevention of the heart condition known as Aortic Stenosis (AS).
The initial consideration is $2.5m, comprised of $1m in cash and $1.5m worth of HWH shares priced at 5c.
Houston We Have said it has also received “firm commitments” for a $2.5m share placement to help fund the acquisition, also priced at 5c.
That marks a material discount to today’s trading price above 8c, after HWH initially rose by more than 90 per cent before easing back slightly into midday trade.
The deal also comes with deferred milestones, starting with additional transfers of $250k cash and $750k shares if ECHO can generate $5m of revenue within three years, “provided that revenue is derived from a contract with a leading artificial heart valve manufacturer”, HWH said.
If ECHO ramps that revenue figure up to $10m (in three years), the cash payment from HWH will surge higher to $2.95m, along with another $1m worth of HWH shares.
Commenting on the deal, HWH chairman Andrew Grover said it will give the company direct exposure to a fast-growing addressable market in the life sciences sector and is “highly complementary” to its existing portfolio.
He’s also optimistic about medium-term revenue growth “once we combine the power of Intelfuze, our augmented intelligence solution, to the already stellar work completed by the ECHO IQ team, and complete regulatory approvals for commercial deployment”.
ECHO IQ leverages AI-based data analytics to scan data from the National Echo Database Australia (NEDA) aimed at identifying at-risk patients for Aortic Stenosis — “one of the most common types of heart valve disease suffered by those over 65”, HWH said.
It’s aim is to provide improved data insights to help with preventative heart disease measures, from more than 1 million echo-cardiograms that are performed in Australia each year (globally, that number increases to 30m).
ECHO IQ Founding Partner Geoff Strange said that combining both companies’ technology with ECHO’s unique access to the NEDA database has the potential to deliver “transformational solutions for clinical cardiology diagnostics”.
HWH’s latest half-year financials show the company booked $501,815 of revenue from software and consulting services in the six months to December 31.
The company reported a net loss of $1.12 million, with cash receipts $525,945 of and operating cash outflows of ($691,282).