UCM into 2018

Hi guys,

As 2017 draws to a close I thought I would share my thoughts into 2018, all in my opinion and not advice.

Approvals pending: Uscom BP+ and SpiroSonic devices are under review for approval from the CFDA and FDA. These are the last two pieces of the puzzle to get all products available for retail sale in all target jurisdictions: US, Australia, Europe and China. Previous announcements have expected for this to be something to expect in 2H2018 calendar year.

The impact of Xianhui Meng: Like GC8, I expect Meng to join to board early in 2018. You don’t take a 10% strategic holding in a company to sit on the sidelines. Perhaps another hint was this line of the announcement “Mr Meng will bring both his international corporate and management skills to Uscom”. So assuming that’s the case he will be our key man on the ground in China. Tick! If all reports stack up its huge. His SOE govt relation positions and Sihuan, sales and marketing, relationships open up 3,000 distributors [Uscom currently has approximately 50 distributors worldwide] who sell into 10,000 hospitals in China. There are a total of 29,140 hospitals in China and this number grows each year. The scope is huge if Mr Meng can get this channel moving.

My view is they begin ramping the USCOM 1A sales into these channels quickly to setup established relationships for when BP+ and Spiro get approved. From research an USCOM 1A costs around 13,000 USD gross. I am being conservative here and just assuming the target market is just hospitals, not GPs, home care facilitators. Now lets discount Mengs hospital reach by 80% = 2,000 potential hospital, assume they each purchase just one device, unlikely given how big these hospitals are, but sensible when trying to comprise the value of the relationship with Meng.

2000 hopsitals x 13,000 USD p.u = 26,000,000 USD / 0.7780AUD = 33.4m AUD gross revenue.

This is one device, one country, and I consider a conservative approach. Assuming not a single device gets sold in the US, Europe or Australia they are still very impressive revenue numbers for a 22m MC company.

Ill continue to flesh out more on other regions and scope for continued growth.

Best of luck, DYOR