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Re: nsomniyak post# 4045

Thursday, 12/01/2022 10:32:56 PM

Thursday, December 01, 2022 10:32:56 PM

Post# of 5925
nsomniyak...HLTT's Q4 revenue......

What HLTT did not say was whether the revenue would be recurring or not. THey indicated that for the to acquire a company already generating revenue wa not be be expected.



The way I am reading/interpreting the second sentence in the paragraph below is just management noting that investors should not expect HLTT's other businesses (Medi-Scan, RevHeart, and future acquisitions) to generate revenue as quickly as the wound care business has. This particular acquisition was just somewhat unique in that they were able to acquire a product/technology/business in an advanced stage of development and get the product approved/marketed in a more compressed timeline than we should normally expect. An "exception to the norm".......

We expect HWC’s wound care business to become profitable during the fourth quarter of 2022, which will alleviate some of the cash flow burden of that business. That revenue, occurring shortly after our acquisition of the wound care business, will likely be the exception to the norm for our portfolio companies. Our business plan contemplates that, to attract exciting additions to our portfolio, we will offer most the several million dollars of financing that is necessary to bring a medical technology to a stage where its sponsor can function independently. Since our ambition is to sustain a portfolio of such enterprises, our near term capital requirements (near term being the two to three years before we can anticipate initial returns on most of our investments) will be tens of millions of dollars.



I would be somewhat surprised if HLTT's Q4 revenue was not fairly decent/sizable. The wound care business showed about a $351K loss in Q3, which means operating expenses for that business were about $1.075M in the third quarter. It is very possible those operating expenses can be reduced in Q4, but I think the revenue number will still need to be reasonably high for the business to reach profitability.

Twice in the Q3 report, the company mentions an expectation of the wound care business reaching a profitable status in the near-term......

We expect that the manufacture and sale of allografts by HWC will become profitable in the foreseeable future. Our business plan, however, contemplates a breadth of operations in addition to wound care treatments. For that reason, our research and development expenses will rise significantly if we obtain the capital resources necessary to fully implement our business plan. In particular, expansion of the operations of HWC to include additional product lines and the effort to bring MediScan’s and RevHeart’s technology to market will require several million dollars of capital expense. For that reason, we cannot predict when we will achieve company-wide profitability.



We expect HWC’s wound care business to become profitable during the fourth quarter of 2022, which will alleviate some of the cash flow burden of that business.



The Q3 was filed in the last week of November, with almost 2 months of Q4 completed. I would assume management would not have provided that kind of guidance and timeline unless the numbers/projections they were seeing looked favorable.

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