Paradigm Medical Industries, Inc.
(Public, OTC:PDMI.PK)
The Medical device industry has been one of the most successful industries within 2008 and 2009, and 2010 should continue that trend. StocksHaven Investments profiles Paradigm Medical Industries, Inc., a promising company who will soon begin to introduce the first of its four new ophthalmic diagnostic devices, the Paravue, during the remainder of 2009. Plagued by lawsuits, financial woes, and poor management — the company has made a vast array of changes during late 2008 and 2009 leading to an invigorated interest in past and present shareholders. The company named Stephen Davis the new president, an individual with an impeccable ability to attain funds and grants for struggling institutions, alongside 20 years experience in the ophthalmic industry. Paradigm also has the only patented technology utilizing photon lasers for cataract removal and is poised to capture a niche market within the glaucoma and ultrasound microscopy fields. The glaucoma market alone is estimated to reach $4 billion in 2010. With a portfolio consisting of a total of 15 devices currently available, and 4 pending release with one expect by end of 2009, Paradigm seems to have positioned itself nicely for a rebound in the near future.
About Paradigm Medical Industries, Inc.
Paradigm Medical Industries, Inc. develops, manufactures, sources, markets and sells ophthalmic surgical and diagnostic instrumentation and related accessories, including disposable products. The Company’s surgical equipment is designed for minimally invasive cataract treatment. Its cataract removal system, the Photon laser system, is a laser cataract surgery system designed to be marketed as the next generation of cataract removal. The Company’s diagnostic products include a P2000 pachymetric analyzer, a P37 Ultrasonic A/B Scan, P40, P45 and P60 UBM Ultrasound Biomicroscopes, a P37 A/B Scan, two perimeters, the Blood Flow Analyzer, and the Glaid. The diagnostic ultrasonic products, including the P2000 pachymetric analyzer, the P37 Ultrasonic A/B Scan and the P40 UBM Ultrasound Biomicroscope were acquired from Humphrey Systems, a division of Carl Zeiss.
Products
P2700 A/B Scan
P37-II A/B Scan
P60 UBM
P37 A/B Scan
P40 Ultrasound BioMicroscope (UBM)
P45 Ultrasound BioMicroscope (UBM)
P50 Ultrasound BioMicroscope (UBM)
LD400 AutoPerimeter
LD700 AutoPerimeter
Ocular Blood Flow Analyzer
P-2000 Biometric Analyzer A-Scan
P2200 Pachymeter
P-2500 A-Scan/Pachymeter Combination
P55 Pachymeter
TKS 5000 AutoPerimeter
Financial Analysis ( From 3/31/09 10-Q )
Sales of the Blood Flow Analyzer TM decreased due in part from the reorganization of the Company’s sales force. The Company anticipates continuing the upward trend in Blood Flow Analyzer TM sales through additional efforts by the Company to gain more wide spread support from the Blood Flow Analyzer TM through increased clinical awareness, product development and improved marketing plans.
Sales of surgical products are at a standstill pending FDA approval of the Photon TM laser system. In the twelve month period ended December 31, 2008, the Company realized no sales in the surgical line consisting of the Photon TM laser system. There were also no sales in the surgical line for the comparable period of 2007.
The Company anticipates reversing the downward trend in sales through additional efforts by the Company to gain more widespread support for the P60 UBM Ultrasound Biomicroscope, the Blood Flow Analyzer™, the LD400 Antoperimetry System, the P37-II Ocular Ultrasound Diagnostic A/B Scan, the 2200 and 2500 Pachymetric Analyzers, the P2000 A-Scan Biometric Ultrasound Analyzer, the new agreement with the Costrugione Srumenti Oftalmici (“CSO”) organization and its ophthalmic products, and through increased clinical awareness, ongoing product development, improved marketing plans and strategic product replacement, and ongoing development of the LD400 perimeter. The Blood Flow Analyzer™ is expected to have a new CPT reimbursement code for Medicare insurance providers issued by the end of 2009, reversing the downward sales trend it has experienced.
Gross profit for the three months ended March 31, 2009 increased by 15% to 53% of total revenues, compared to 38% of total revenues for the same period in 2008. This increase in gross profit was mainly due to reductions in corporate expenditures as a result of improved operating efficiencies during the three months ended March 31, 2009. There was no increase to cost of sales as a result of a charge to the reserve for obsolete inventory in 2008.
Marketing and selling expenses decreased by $137,000, or 75%, to $46,000, for the three months ended March 31, 2009, from $183,000 for the comparable period in 2008. This decrease was due primarily to a reduction in overall marketing expenses, related travel expenses and a general reduction in staff.
General and administrative expenses decreased by $94,000, or 42%, to $128,000 for the three months ended March 31, 2009, from $222,000 for the comparable period in 2008. This decrease was due primarily to a reduction in overall general and administrative expenses, including a reduction in salaries and hours worked by employees and travel expenses. The bad debt allowance remained same from December 31, 2008 to $75,000 for the first three months ended December 31, 2008.
Also, during the three months ended March 31, 2009, the Company collected $58,000 in receivables that were previously allowed in the allowance for doubtful accounts.
Research, development and service expenses decreased by $24,000, or 27%, to $64,000 for the three months ended March 31, 2009, compared to $88,000 in the same period in 2008. This decrease was mainly due to a reduction of funding available for the marketing of new products and a reduction in staff.
Gain and loss of derivative valuation for the three months ended March 31, 2009 decreased by $113,000, or 93%, to $8,000 as compared to $121,000 for the same period in 2008.
Interest expense–accretion of debt discount for the three months ended March 31, 2009 decreased by $123,000, or 66%, to $62,000 as compared to $185,000 for the same period in 2008.
Interest expense for the three months ended March 31, 2009 decreased by $5,000, or 6%, to $72,000 as compared to $77,000 for the same period in 2008.
News & Announcements
Paradigm Medical Announces Plans to Release Its New Corneal Topographer, the Paravue, in the United States Market
ALT LAKE CITY, UT–(Marketwire – June 1, 2009) – Paradigm Medical Industries, Inc. (OTCBB: PDMI) announced today that the Company will soon begin to introduce the first of its four new ophthalmic diagnostic devices, the Paravue, during the remainder of 2009. The Paravue is a sophisticated topographer utilizing Placido Disk Technology and an advanced software to provide accurate and detailed analysis of the anterior corneal surface.
Corneal topography — also known as videokeratography or corneal mapping — represents a significant advance in the measurement of the corneal curvature. Most corneal topographers evaluate 8,000 to 10,000 specific points across the entire corneal surface. By contrast, the Paravue processes more than 100,000 points. It also offers corneal wave front analysis with 2, 3 or 4 maps available for comparison. Source
Paradigm Medical Industries Plans to Begin Clinical Work to Upgrade Its CPT Code for Its Blood Flow Analyzer From an Investigational to a Reimbursable Level
SALT LAKE CITY, UT–(Marketwire – May 26, 2009) – Paradigm Medical Industries, Inc. (OTCBB: PDMI) announced today that the Company plans to begin the important process of upgrading its CPT code (0189T) for its Blood Flow Analyzer from the American Medical Association from an investigational level (Class III) to one that will enable public and private medical centers to be reimbursed by their regional medical insurance companies for testing patients using the Blood Flow Analyzer. The Blood Flow Analyzer is used to detect glaucoma and aid in managing the disease. Source
Paradigm Medical Industries, Inc. Signs Worldwide Distribution Agreement With CSO
Thursday, 16 Apr 2009 10:00am EDT
Paradigm Medical Industries, Inc. announced that it signed a distribution agreement with Italian company, Costruzione Strumenti Oftalmici (CSO), whereas Paradigm will represent exclusively one of CSO’s products in the US market, Retimax, the next generation for Standard Ocular Electrophysiology. The Retimax performs tests for the early screening and follow-up of important pathologies like Glaucoma, ARM (age related Maculopaty), vascular retinal degeneration and other optic nerve diseases. Paradigm will also distribute additional ophthalmic products in the International and domestic markets. Source
Paradigm Medical Industries, Inc. Signs LOI for Up To $1.8 Million in Structured Financing
Tuesday, 14 Apr 2009 10:00am EDT
Paradigm Medical Industries, Inc. announced that it has signed a Letter of Intent (LOI) with Fairhills Capital for a structured financing of up to $1.8 million through the purchase of promissory notes from the Company. The LOI provides that $600,000 in notes will be purchased every three months over a nine month period, with the first purchase of $300,000 in notes to be made at closing and the remainder to be purchased upon the satisfaction of financial objectives to be mutually determined between the Company and Fairhills Capital. Final details and contract for the financing are ongoing and expect to sign an agreement within the next ten days. Paradigm Medical will utilize the capital from the funding to re-launch and re-brand the Company in the global and domestic markets. Proceeds will be used for the development, redesign and upgrade to a number of their key products and to hire new key management and a sales team to help lead these efforts. Source
Paradigm Medical Industries, Inc. Names Stephen Davis As President
Friday, 21 Nov 2008 09:39am EST
Paradigm Medical Industries, Inc. announced that it has named Stephen L. Davis as President, effective November 18, 2008. He replaces Raymond Cannefax, who was terminated. Source
Technical Analysis ( Click image to enlarge )
PDMI has spent the past six months consolidating after a significant change in price back in April and now appears ready to climb. The current price channel has been in control for most of this year and the price action has respected the channel lines (Blue lines on the chart) very well. Today, the price clearly exceeded the ¼-level trend-line. This move is backed-up by an enormous increase in volume (almost 150%). Now, the stock seems to be headed for the middle trend-line around the .0042 cent level. What is interesting is the fact that the daily 200 SMA (Yellow line on the chart) is currently at .0037 cents. As we have seen with numerous stocks over the past six months, the trend is to jump the 200 SMA and use it as support while the daily 100 SMA (Orange line on the chart) starts to trend up looking for the Bullish cross over. The increase in volume indicates the interest in this company’s recent activity seems very positive and this stock is ready to swing in a positive direction and carry on into the upper level of the conservative price channel and beyond. It’s good to keep in mind that the price has reached well above the top trend-line, trading over .015 cents back in January (over a 350% increase from today’s closing price).
Overall Sentiment
For Paradigm Medical Industries, Inc., it is easy to see why the company’s market cap has suffered, thus generating an all-time low price per share, leaving investors to scratch their heads questioning the future potential. This company has been beaten down and battered, in every sense of the word the last couple of years. They’ve endured financial failures, inability to generate sales, incoherent management, irresponsible leadership by the past CEO, and to top it all off lawsuits, as if this cupcake really needed the cherry on the icing. With a renewed sense of optimizing within the coming weeks due to the 4 new products, this play represents the perfect scenario for a high risk, high rewards style of investment.
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Disclosure: Short term position in PDMI
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