Westeffer – extracting from published data, Dr. Zoutman has done a credible job of comparing the scientific efficacy of the relevant competing technologies. MZEI can point to better kill rates, on more surfaces, etc. The cost of the AS machine and application times are but two of the components impacting economics. ‘Ease of use’ or lack thereof has a definable cost. It’s likely that the AS application time can be reduced by accelerating the time to get the ambient atmosphere to operational status and return it to pre-application standards. This has more to do with mechanical engineering {larger humidifiers/dehumidifiers, higher capacity air handling equipment, etc.} than bio-chemistry (the trioxidane dwell time would seem to be relatively fixed based upon the bacteria to be killed).
We have been told that the AS process is anywhere from 1 to 1.5 hours, start to finish. If serially sequenced, this would mean that the AS unit could clean 16-24 rooms per day, compared to Xenex’s claim of 51 rooms [the inference being that you may need 2x+ the AS units compared to Xenex to clean the same number of rooms]. We have heard the cost of the AS machine ranging from $75K (FIME price) - $125K (I believe the latter figure was in Canadian dollars) and the article states that the Xenex equipment is about $40K.
So the economic question is whether the AS unit’s better efficacy will result in sufficiently lower HAI incidence and cost so as to offset or improve upon its higher capital and operational cost. MZEI has had production AS units since the Spring of 2012 and has yet to start the needed economic testing. Presumably, more than the three machines held by MZEI are needed. In the October shareholder update, Ed wrote about the test protocols being about done for a 6-8 month test. As yet, I don’t think we’ve been told the test has begun. We don’t know if MZEI has the AS units to even start the testing. In the Spring 2013 PR announcing the relationship with SMWW, Ed stated that the company had begun the production of 10 units. Otherwise, he had raised PPL funds primarily therefore (note the past tense). Yet, these units never appeared as income on the income statement or inventory on the balance sheet in Q2 or Q3 (note a $30K deposit notation on the balance sheet). Perhaps the units were never in production or production was halted to deal with the ‘communications’ problems that should have by now been resolved per Ed’s October update (6-8 weeks). It would be interesting to know if the economic tests will also be administered in tandem with the protocols of the competing technologies (which I believe are available via SMWW). It remains to be seen whether the self-ascribed ‘gold standard’ of technology will economically perform materially better than silver, bronze and copper products offered by the competition.
JT, I don’t think Xenex’s prospective sale of 625 units means that we’ve lost access to 625 hospitals. The article stated that the company had placed its equipment in 100 hospitals since 2009 [inferring multiple units per facility sold]. The projected 2013 sales of 625 Xenex units does suggest: a) some relative scope of the market and number of potential unit sales {if it turns out that AS is both efficaciously and economically superior, and the process time averages about 1 hour, then the 625 Xenex units represents a 1250 unit market for AS by comparison}; b) the sales by the competition may represent lost opportunity or it may represent your 1st target market for AS as the competition has done the “heavy lifting” in terms of facility education and these facilities have a demonstrated predisposition to be early adopters. A good management team at a suitor or distributor would know how to attract the requisite marketing personnel, if you know what I mean.
Ben, Round Rock can be silenced by good test data and MZEI managerial execution.
I hope for better results in 2014; emphasis on hope.
AI
