Xcelerate Inc (XCRT)

[rubicon_jones]

Nice to see the HS Pharma deal announced last week. Bit of justification for me as I have gotten a lot of grief for saying have patience with this deal and telling people I believe it is still active and ongoing when we did not hear anything about it for a year.

It was May 6, 2021 when the first PR with HS Pharma was released.

I believe this deal gives a good example of what Mike has built with $XCRT and considering the resources when he originally took over- it is impressive how he has positioned $XCRT as a potential powerful company in the healthcare sector.

Let’s breakdown the deal (and some of the comments that have been made regarding the licensing), the healthcare industry as a whole (I think we have all seen a lot regarding Healthcare over the past 2 years-right?), and what Mike has done to position $XCRT to be a major player in this field.

1) Why did the deal take so long?

a) These types of deals take time. You are trying to convince a company (HS Pharma) to give up ownership of their patents or their babies for stock by saying-“we will do a better job then you getting them to market.” HS Pharma also has to go back to the Angel investor and VC to explain the negotiations

A History lesson- HS Pharma was founded 2004 and has raised approximately $10.5 million in 2 rounds- $1.98 from an single angel investor and approximately $8.6 million in a VC (Vulture er I mean Venture Capital) round in 2009.
Sources-
https://www.crunchbase.com/organization/hs-pharmaceuticals and https://pitchbook.com/profiles/company/54818-11#overview.
Here is the Form D filed with the SEC if you have doubt they raised the funds- https://sec.report/Document/0001355028-09-000003/

b) They are generating revenues from some of these patents and are a revenue generating company.

This just makes it more difficult to convince them to give up some of the patents or makes the deal more complicated. Once you convince them they have a better chance of success with $XCRT you now have to carve out what HS Pharma is generating from these patents.

c) Pharmaceutical industry patents are more complex and expensive then regular patents. While patents protect your compound you need to do clinical trials to prove they work. It’s not like a mechanical or utility patent. Even though you must go through the expense of filing a patent to protect your compounds and claims- you still must do clinical trials which are very expensive.

2) So why are you claiming this is a good example of what Mike has built at $XCRT?

Glad you asked lol-and let me explain

a) Pharmaceutical industry as a whole is in need of a company like $XCRT.

In order to get drugs to market you have to be one of the big boys or have deep pockets as it is very expensive. Most of the big boys don’t have huge R & D divisions anymore as they look for companies that have angel investors and then VC investment on drugs that look promising. Then they tell these companies they will do the trials. It’s the only way to get the market in most instances.

So this is where Skichic’s crush on Dr. Barry comes into play.(just teasing) Seriously, to have a Nobel Prize for medicine expert on your board is important. Especially one that went against the system and tried his medicine or theory on himself. There are not many at the FDA that want to be embarrassed by him again or understand that if he believes in something it carries weight.

But it’s not only Barry- it’s also Fran White who was added to the board in Feb who brings a wealth of experience in regulatory aspects of the health-care industry. Remember her? Here are some quotes from the PR. https://www.otcmarkets.com/stock/XCRT/news/Fran-White-to-Join-the-Advisory-Board-of-Xcelerate-Inc?id=343739

“Fran founded MDC Associates more than 30 years ago. MDC is a consulting company specializing in regulatory affairs management in the medical device and biotechnology industries. Their clients include many of the leading companies in the biotech and diagnostic industries.”

Then you have Jason Householder on the Board that owns a company that finances medical companies and his brother is a bigwig at Merril.

Oh and speaking of investment help in bringing products to market have we forgot Vincent is on the advisory board as well. Here is a link to that PR if you forgot- https://www.otcmarkets.com/stock/XCRT/news/Head-of-Non-Standard-Investments-at-FinTrust-Vincent-C-du-Vigneaud-Joins-Advisory-Board-of-Xcelerate-Inc?id=300062

Here is a quote from that PR- “du Vigneaud currently serves as Portfolio Manager/Analyst/ Trader and Head of Non-Standard Investments FinTrust Capital Advisors in Greenville, SC. FinTrust is an RIA and Investment Management firm with over $1.5 billion in client assets.”

Add to that Steve Gravely a Fortune 500 company executive that has brought to the table and his wealth of experience working with Fortune 500 Companies. In case you need a refresher course (it’s all ball-bearings- what movie?) here is his Linked In page. https://www.linkedin.com/in/steve-gravely-610331/

So let me bring it all together as to why the HS Pharma deal took almost a year to close and why the closing of the acquiring of the patents strengthens my belief that Mike O’Shea has built a powerful company with the people and resources to be a player in the Health-care sector (and why HS Pharma agreed to hand over their patents (babies) for Stock in $XCRT.

1. May 6, 2021 $XCRT announces the DD period for HS Pharma while also highlighting the business model Mike O’Shea was developing with his team. Link-
https://www.otcmarkets.com/stock/XCRT/news/Xcelerate-Inc-Signs-Letter-of-Intent-to-Explore-Business-Relationship-with-HS-Pharmaceuticals?id=301777

Remember at this time the Board consists of Mike, Jason Householder and Steve Gravely. Dr. Anja is the Chief Science Officer.

The Advisory Board consists of Dr. Ellegala and Dr. Barry Marshall came on Feb 8 and 23 2021 respectively and then Vincent 4/27/2021

A. Here is a quote that really shows $XCRT’s pitch- “The LOI provides for XCRT to undertake its due diligence wherein its world-renowned team of clinicians and researchers will review HS Pharmaceuticals' operations, structure, and intellectual property. During this process, Xcelerate, a rapidly emerging leader in assembling and developing early-stage medical technology, will determine how and in what structure HS Pharmaceuticals research and IP would fit within its business plan."

B. Prior to the signing of the DD period $XCRT announces the new website confirming the pitch to HS Pharma link-
https://ih.advfn.com/stock-market/USOTC/xcelerate-pk-XCRT/stock-news/84954286/xcelerate-inc-unveils-website-that-crosses-the-d

"The unveiling of the official website for Xcelerate, Inc. is a huge step toward achieving our mission of bridging the gap between advanced engineering and medicine," said Chief Executive Officer and Director of Xcelerate, Inc. Michael O'Shea.

C. So here is how….IMHO and just from business experience I see these negotiations going.

Mike- “Hey HS Pharma you have a great portfolio of patents we would be interested in helping you develop. “

HS- “Ok sounds great. Um who are you though?”

Mike- “We are Xcelerate a publicly traded company with a very strong Advisory Board looking to help technologies excelerate to the next level which we obviously feel we can do with your silicate patents and products. Here is our website and here is our Advisory Board”

HS- “hmm ok Dr. Ellegala and Dr. Marshall have some pretty strong credentials, what’s your offer?”

Mike- “We don’t have an offer yet but we want to do some DD with our team. Let’s sign a LOI and allow our guys to take a look”

Thus the May 6, 2021 LOI announcement.

D. Since that announcement the following happened-

1. Dr. Barry Marshall does a great interview on what $XCRT’s business model is and why he became involved link
https://www.otcmarkets.com/stock/XCRT/news/Dr-Barry-Marshall-Shares-Xcelerates-Mission-In-Advancing-Medical-Technology-On-ticker-NEWS-Globally-Streamed-Broadcast?id=302835

2. This 5 minute video is on the $XCRT website and is worth the watch again as it shows a year ago what the business model being developed (plus Skichic you get to see your crush lol)-
https://xcelerate.global/dr-barry-marshall-shares-xcelerates-mission-in-advancing-medical-technology-on-ticker-news-globally-streamed-broadcast/

E. Then the worst PR $XCRT ever did happened on August 26, 2021 where a Definite Memorandum of Understanding was released (Double Secret Probation anyone lol dating myself with these movie references).

1. My personal opinion and I have nothing else that I’m drawing on then personal experience in my businesses was that 1 faction of HS Parma wanted to go with $XCRT and another didn’t.

2. Remember in HS Pharma you have an Angel investor that put up almost $2 million and a VC put up almost $9 million to get these patents and patent pending on their silicate technology.

3. The one patent is generating revenue for topical, burns and other less expensive trials but that is not what HS Pharma filed the patents for. It is for the cancer and other larger aspects for this silicate technology.

4. Whenever you mention something for cancer you are now taking on the big boys and we all know that cancer is big business so while they may be generating revenues on this patent it’s not the big play they or the investors hope for when they invested.

5. Here is a link discussing the different aspects of the patent that is generating income but also been expanded upon (I have a long DD on the patents almost complete that was supposed to go in this post but it is already too long- Wow what a surprise with my long-winded DD lol) https://patents.justia.com/patent/10493097

F. Again my take on the conversation between Mike and HS Pharma.

1. Mike- “So do we have a deal for 10 million- we work out revenue sharing but we own the portfolio of patents and we unleash our team to get it funded and trials?”

HS- “Mike I know I thought we could get this done but our investors are saying we spent $10 million developing these patents and getting them to market and we are generating income so how do we take 10 million shares of a company trading at $.10 (what the price was on Aug 26, 2021) to take over our patents with no guarantees you will get anything done and you have no track record.

Mike- “Very easy. You have been doing this for the past 15 years and while you have gotten the one aspect for topical to market the big prize has eluded you. I think you agree $XCRT has put together a top-notch group that will bring this to areas you could not on your own. You have also run out of the money you raised and the money you are generating from sales will cover the bills and the salary but not large enough to do the clinical trials and let the medical world know this silicate compound has huge implications. Also the big boys probably know this and are waiting for your patent to expire and then you will not even get a $1 from them. The 10 million shares that you say is at $.10 now- if we can accomplish what you could not -will be worth 10, 20, maybe even 50 times what they now.”

HS- “but no cash just stock of a company that has very little track record and no proven product taken to market. I can’t get that approved”

Mike- “There will be no cash as we will need to raise the funds to do clinical trials and all of the other work our team has to do. I told you this from the beginning and I understand if you don’t want to take the risk but please don’t tell me $XCRT doesn’t have a track record- we have a team that is first class in their respective fields and have accomplished more then most established companies. How many companies has a Nobel Prize member? Look we have other technologies we are working to bring to market- one that Dr. Ellegala was involved with from the beginning and is being rolled out in the US and we can have rights in Africa. I’m not trying to convince you to take the deal but I’m telling you that’s the best deal your going to get from $XCRT.

HS-“Sorry I can’t get that approved”

Mike- “No problem, I wish you the best of luck and we live in the same state and if you change your mind you know where we are.”

G. Since the August announcement of the definite super special MOU this is what $XCRT accomplished.

1. Acquired controlling interest in Afiyasassa- 1/3/2022 https://www.otcmarkets.com/stock/XCRT/news/Xcelerate-Acquires-Controlling-Interest-in-AfiyaSasa-Africa?id=337479

This is a technology that Dr. Ellegala was involved with from the start that is the same timeline as the filing of patents to HS Pharma. “This technology is centered on software that uses and incorporates artificial intelligence ("AI") and Augmented Reality ("AR") developed by AdviNOW. The application is designed to connect people in remote areas where there is limited medical infrastructure and/or limited medical professionals. ASA was recently founded by Dr. Dilan Ellegala and Doyle Word.

Here is the history of AdviNOW from Crunchbase (compare to HS Pharma)
https://www.crunchbase.com/organization/advinow-medical

Started 8 years later and the technology is in the US and they raised $14 million.
You think Mike made a call after this acquisition to HS and said- these are the types of things we can do and quicker as Ellegala was involved in this from the start.

2. Fran White joins advisory board-2/15/2022
https://www.otcmarkets.com/stock/XCRT/news/Fran-White-to-Join-the-Advisory-Board-of-Xcelerate-Inc?id=343739

3. Shareholder update 3/9/2022 from Mike
https://www.otcmarkets.com/stock/XCRT/news/story?e&id=2152337

Here is some of the quotes- “We are now excited to announce that Dr. Dilan Elegalla has relocated to Tanzania to establish a pilot program and ASA has hired four employees including C.E.O. Sriyanjit Perera. Sriyanjit served for 10 years in Dar Es Salaam, the capital of Tanzania, as a Health Information System Advisor assigned to the CDC’s Health Information System where he worked closely with senior Ministry of Health and Social Welfare officials to lead efforts to strengthen monitoring and evaluation and Health Information Systems across the Tanzanian Health Sector. In addition to Sriyanjit, ASA has hired three senior Information System Developers with experience in banking, national information systems, hospital, and health sector systems across Tanzania.”

In 2 months of obtaining controlling interest in ASA they already have 4 hospitals on-line and hired 4 people integral in Healthcare in Tanzania.

You think HS was paying attention to this? You think Mike called them and said-

(Again I picture the following conversation-)

“well we placed Dr. Ellegala on a project and look how quickly he’s moving. We still have Dr. Barry ready to assist you and hired Fran White which could also help in what we need to do for your patents? We are also getting exposure now. Have you raised any money or gotten any further on clinical trials? You know the definition of insanity?”

HS- “OK Mike yes doing the same thing over and over again and expecting different results. The investors see what you are doing and our impressed but the stock is half from when you first made the offer. Can you adjust?”

Mike- “and we are a year closer to your patents expiring and you know the market fluctuations. We keep delivering and we believe in your products but we will have to move on if you don’t accept the offer”

Result- https://www.otcmarkets.com/stock/XCRT/news/Xcelerate-Inc-Expands-IP-with-Acquisition-of-Patent-Portfolio?id=355473

They agree to sell the patents to $XCRT for 10 million shares!!!!

I’m sorry this is so long. This started as an evaluation of the patents they acquired but morphed into a discussion about how Mike has built $XCRT and a little victory lap for all of the negative responses I received when I told everyone to have patience on the HS Pharma deal.

Also those conversations are just how I imagined them to be. I have no knowledge that is what happened but my guess. I’ve been on both sides of those negotiations in my lifetime and from the timing and how things played out it seems reasonable.

I’ve said it before and I’ll say it again- building a quality company takes time. Especially when you start with a hi-jacked shell that has no assets and behind on its filings for 5 years.

In two plus years Mike has

1. gotten everything current
2. built a stellar Board of Directors and Advisory Board that encompasses Fortune 500 people and Nobel -Prize winners
3. Got Worldwide rights for a patent for a metal alloy that fits perfectly with surgical instruments
4. Acquired majority ownership in a company Dr. Ellegala has been developing for 8 years and has Dr. Ellegala in Tansania building the foundation and has 4 hospitals doing pilots
5. Acquired a portfolio of patents in a silicate technology that is generating revenues as a topical cream but they believe has benefits to helping slow down or stop cancer.

All of this while increasing the outstanding shares only 100 million in 2 years. Yet people are complaining he is diluting the company. What a joke. You think people work for free?

The equity value for acquiring the patents was $500,000. HS Pharma spent $10 million on them. You think he got a bargain? You all that complained that it was taking so long- are you happy he waited instead of paying more so you can have a press release earlier? He’s a forensic accountant- he knows how to get value.

I had people messaging me that the AfiyaSasa Africa, LLC deal was horrible and what happened to HS Pharma? How can the first transaction be a company that hasn’t generated any revenue and you be excited about it?
Because did you look at the technology? Did you look at AdviNOW and how it is operating in the states? Did you know Dr. Ellegala was involved in this from the beginning? Do you see the technology is perfect for Africa?

Finally, do you think it showed HS Pharma that $XCRT can move deals forward and solidified the business model they developed and that Dr. Barry described in his interview (Why would a Nobel Prize Winner join a pink sheet company?).

The patents look promising. They will definitely have to raise some money in order to get the clinical trials underway. While I love what Mike has done; I will always keep evaluating the decisions and progress. I also will call things out like that stupid Definite MOU and always look at the stock issuance each quarter- this is after all stinkypinkland….but if Mike and his team keeps executing on the things they say I think it’s a matter of time for an uplist. The cast and quality of this Board smells of that uplisting smell.

As always this is only my humble opinion and I urge everyone to do their own DD and know what they own. Do not base your investment decisions on my opinion-but use it as a tool for you to explore your risk aversion and comfort. I just try and share where my DD leads (of course if I’m please with what Mike has done, I do load up before releasing my DD- full disclosure.)

My next DD is a discussion of the patents. Have an awesome day