Despite the continuing tough macro conditions for early-stage medical device and life science firms, Belluscura (BELL) , a developer of best-in-class portable oxygen concentrators (POCs) used to treat respiratory conditions like COPD, said today that its US subsidiary had secured a $4m working capital facility from Sallyport Commercial Finance of Houston, Texas.
The 3-year loan will be used to fund the launch of BELL's new DISCOV-R POC, covering accounts receivable, purchase orders, inventory and associated cash flow - which after being granted Medicare approval on 28th October means the business is well-placed to rapidly increase sales (est Q4'24 $1m-$1.5m) on the back of robust demand, once the device enters full production in early 2025.
CEO Bob Rauker commenting "Since releasing the DISCOV-R earlier this year in a limited direct-to-consumer launch, we have seen increasing month-on-month demand for the product. This new facility secured from Sallyport provides the company a platform to initiate a limited launch of the DISCOV-R into the important B2B market."
This is marvellous news - albeit it does seem likely that further capital will still be required in order to facilitate a full commercial launch.
Here, Medicare health insurance covers most Americans aged over 65, and for many with qualifying conditions under the age of 65. In fact, it is estimated 1.5m people already receive supplemental oxygen through the program for a variety of respiratory disorders to improve their quality of life and prolong survival.
Finally, in terms of the numbers, house broker Dowgate Capital has a 35p/share target price vs 9.5p currently (mrkcap £16m), based on turnover climbing from $4.5m in 2024 to $20.0m next year and generating FY25 EBITDA of $0.8m.
As at 25 Oct'24, Belluscura had cash reserves of $0.3m and $1.1m of receivables, excluding $9.6m of convertible loan notes.
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