It’s incredibly tough currently being an early-stage, fast-growing entrepreneurial business at the moment. Higher interest rates have crushed valuations and access to fresh capital has tightened considerably, even for best-in-class firms.

For investors, the key is to not to lose sight of the longer term strategy. Take Belluscura (BELL), for example, a developer of next generation, Portable Oxygen Concentrators (POCs). In February it successfully raised $5.8m of 3 year convertible debt paying 10% a year to partly fund the US launch of its eagerly awaited DISCOV-R model, which helps treat COPD & other chronic respiratory conditions. 

This patented device weighs 40% less than comparable dual flow POCs, whilst producing nearly 3 times the oxygen by weight. It won the prestigious Silver Award in the Best New Product category at the Medtrade 2023 conference last week, another major endorsement of this cutting-edge technology.

And patient investors who recognise this engineering excellence can now expect to be rewarded. Today came news that trading so far in 2023 was “in line with expectations”, as new distributors including GoodRx have been appointed with good traction being made with its European and UK product authorisations to obtain CE & CA marks.

Elsewhere, Belluscura's Shenzhen based contract manufacturer InnoMax has begun production of the X-PLOR, with regulatory approval in China expected over the summer. Ultimately this facility will be used to drive expansion right across Asia, where 100m people in China alone have COPD - 4 times levels in the US - on top of a further 50m in India and 5m in Japan.

That all leaves the stock looking materially undervalued, with the shares currently trading at 34p against Dowgate’s 150p a share target price. Dowgate predicts unit sales of 12,000 and 30,000 respectively over the next 2 years, up from 1,226 last year. That would generate FY23 and  FY24 revenues of $15.4m and $48.7m, from $1.5m last year. That would see the company turn cashflow positive in 2024, after closing 2023 with net debt of $7.5m.

CEO Bob Rauker commented: "We continue to make good progress with manufacturing in China, increased orders for X-PLOR and the tremendous reception of DISCOV-R by the industry at Medtrade."