Microsaic Systems - Operational Update
26/11/2024 07:00
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RNS Number : 5905N Microsaic Systems plc 26 November 2024
26 November 2024
Microsaic Systems plc
("Microsaic", "Microsaic Systems" or the "Company")
Operational Update
Microsaic Systems plc (AIM: MSYS), an international developer and provider of
testing solutions for unique and underserved public health and environmental
markets, is pleased to present an operational update.
As recently presented in the interim update issued on 12 November 2024 ("H1 24
Interims"), the Company is focused on developing a strong business in the
water and environmental testing markets. Given the unique position of its
small-scale technologies the Company believes it can become a leading mobile
and point-of-use water testing technology provider. The Company's technologies
are versatile and can provide testing results in minutes rather than hours and
can be summed up as a "lab in a box."
The Company is working on the following operational and product development
projects in the water and environmental testing markets, focused on generating
early revenues and improvements in gross margins.
Qatar project update
Further to its announcement of 27 March 2024, the Company is pleased to
confirm that all 27 Continuous Toxic Monitoring systems (CTMs) have now been
installed in Doha. Commissioning is underway with the Company's regional
partner, Avanceon, which is a leading installer of industrial solutions,
including for the water industry, with a wide presence in Asia and Middle East
countries.
The Company's CTM network in Doha will constantly monitor the region's potable
water and is an early warning system for the presence of any toxic chemicals
present enabling fast network shutdown if needed. Over 2,700 potential toxins
have been scientifically identified that can be detected by the MicroTox®
reagents used in the CTMs and is therefore one of the most comprehensive
systems on the market. All related consumables are expected to be shipped by
the end of the year for project completion.
The end user, Kahramaa (Qatar General Electricity and Water Corporation), is
currently undergoing training to operate the CTMs and final acceptance is
expected soon after. The total value of this contract to the Company is
€571k and the Company has invoiced 80% of the total amount in two tranches
for work completed. A second phase of the project is already under discussion
for 2025, which could mean the purchase of more CTMs for new sites in Qatar.
MicroTox® Instrumentation upgrades
The Company has significantly invested in upgrading the design and operation
of its MicroTox® driven devices. This brings them up to date with the latest
electronics to meet customer requirements, including improved user interfaces.
The Company believes the upgrades are expected to result in an increase in
sales of instruments all of which use various forms of our MicroTox®
reagents.
MicroTox® LX
Production has just started of our newly upgraded laboratory based MicroTox®
LX device having received initial firm orders of eight units, with five to be
shipped in December to international customers. The MicroTox® LX is an
industry standard laboratory device for early screening of toxins in water.
Showcased initially at Weftec (largest North America water industry
exhibition) in October the upgraded MicroTox® LX is attracting considerable
industry interest turning into firm orders and sales.
MicroTox® FX
The Company is evaluating wider market interest in its small handheld
instrument which can be used for screening potable water in real-time, in the
field, called MicroTox® FX. For possible military use the MicroTox® FX is
being showcased in Q1 2025 at the permanent UK Defence and Security Exports
exhibition site at Larkhill, England, where allied overseas armed forces can
examine and try new products suitable for military use.
Tethys Purity® Initiative
'Tethys Purity®' is a system of multi-instruments and MicroTox® reagents
solutions for online/automated water safety testing. Instruments from Modern
Water, Microsaic Systems, and other selected partners are being networked to
deliver bespoke solutions to customers that require constant live and online
data monitoring capability.
The networking of the Tethys Purity® devices for continuous centralised
dashboard data monitoring and analysis using machine learning software (AI) is
currently under review. The Company, in collaboration with Siemens and their
technical support provider CAD-IT, is starting trials of their specialist
software for the digital transformation and centralised data recording of the
Company's instruments. The Company is planning to launch the Tethys Purity®
system in early 2025. The Company is working with regional offices of the
British Department for Business and Trade (DBT) to promote the Tethys Purity®
solution in GCC countries and elsewhere.
Pathogen Detector Development & Consortium
The Company's new Pathogen Detector system, initially designed by Microsaic
Systems as a Covid-19 detector in water, is being repurposed to detect
Cryptosporidium (found in sewage polluted water) initially and later multiple
(possibly up to nine) water-borne pathogens at the same time. As previously
announced, the Company will be working with Aptamer Group plc (in York,
England) supported by other specialist contractors to develop the detector
system.
The system will be portable and easily transportable therefore offering a
significant step forward for in-line real-time detection and identification of
multiple pathogens including viruses. The Company believes this system will be
unique and allow customers to detect pathogens in water tailored to their
needs for fast response analysis in minutes.
The Company expects to move the project to proof-of-concept shortly and
commercialisation could be planned, subject to resources, by the end of 2025.
PFAS & Acrylamide Systems
Polyfluoroalkyl (PFAS) substances are a group of manmade chemicals designed
to be non-stick, waterproof, and flame-resistant that have been linked to
various health problems, including certain cancers which are of major concern
in key markets like the US. The Company's Microsaic mass-spectrometer
technology is well positioned to address this market due to its portability
and accuracy of testing (parts per trillion) and aims to be the leading 'point
of use' system for PFAS detection and measuring systems. The Company believes
this embryonic but rapidly developing market provides another example where
its unique and proprietary technology can service a current unmet need for
very small minimum detection systems.
Despite the testing challenges posed by PFAS, the Board believes this testing
market could be a significant opportunity for its system. Companies that can
offer innovative, cost-effective solutions will find themselves in high demand
in a market that is already growing rapidly. The global PFAS testing market
(https://www.marketresearch.com/BIS-Research-v4011/PFAS-Testing-Global-Regional-Focus-38073387/)
was valued at $336 million in 2023, and it is expected to grow at a CAGR of
9.33% and reach $893 million by 2034 (Source: Market Research.Com 8 October
2024).
A wide range of PFAS chemicals, including the most common ones found in the
environment, can be detected by the Company's system and the Company is
working with Swansea University to identify and analyse the broadest range of
PFAS chemicals possible. The Company can also confirm it is in early-stage
partnership discussions with multiple companies also interested in this
important environmental market.
The Company continues to monitor the market for detection of potentially
carcinogenic acrylamide in heat treated foods. Customer trials of our
detection equipment based on the MiD4500 mass spectrometer are expected to
begin in H1 2025 collaborating with a specialist partner in combination with
their automated sample preparation method for testing for acrylamide in crisp
products.
MiD4500 Manufacturing
The Company has decided to reduce manufacturing costs and improve the
profitability of the Company's mass spectrometer MiD4500 by ceasing
subcontract manufacturing and bring manufacturing in-house. The Company will
open a smaller in-house manufacturing facility in Woking, England, which will
be considerably lower-cost, more adaptable and capable of building the new
PFAS Detector as market demand develops.
The Company has also recently appointed a new European distributor, Avantor,
which is now trained on the system for new customers in Europe. Avantor is a
leading life science tools company and global provider of mission critical
products and services to the life sciences and advanced technology industries.
Sulphate Reducing Bacteria Kits
The Company has seen growing demand in the Middle East Gulf region and
elsewhere for Sulphate-Reducing Bacteria test kits (SRB kits), which were
previously sold under the QuickChek® brand. The Company has therefore
acquired the design and rights to manufacture and supply QuickChek® through
the acquisition of its Modern Water business in January 2024. Production is
expected to start in 2025.
Board Composition
The Company recognises that good corporate governance is important both for
the interests of shareholders and to support the future growth of the
business. The Board is committed to strengthening the Board through the
addition of at least one reputable, skilled and sector experienced independent
non-executive director to the board in early 2025.
Cash
The Company confirms that there has been no material change to
its current cash position and cash flow forecasts remain as presented in
its H1 24 Interim update on 12 November 2024."
Comment
Bob Moore, Microsaic Systems' Acting Executive Chairman, commented: "We are
cognisant and appreciative that shareholders have had to be very patient with
us over the past year. With a small but highly skilled team we have been busy
stabilising the business and unlocking the substantial potential of our
Company demonstrated by how contracts, such as the one in Qatar, are
developing. We have been through a period of considerable restructuring and
required capital investment in our comprehensive and new product range, and we
are very encouraged by the nature of enquiries and rewards that are coming our
way. We look forward to providing further updates to the market in due
course."
Microsaic Systems plc +44 (0) 20 3657 0050
Bob Moore, Acting Executive Chairman via Turner Pope
Singer Capital Markets (Nominated Adviser & Joint Broker) +44 (0)20 7496 3000
Alex Bond / Oliver Platts
Turner Pope Investments (TPI) Limited (Joint Broker) +44 (0) 20 3657 0050
Andy Thacker / James Pope
About Microsaic Systems Group
Microsaic is highly experienced in the development, manufacture and supply of
microelectronics instrumentation for markets requiring analytical testing in
public and environmental health markets. The Company has recently acquired and
integrated the assets of Modern Water with Microsaic Systems' technologies
resulting in comprehensive water testing and other toxic testing capabilities.
Microsaic's products and solutions are commercially available through global
markets via a network of regional and country specific distributors and
partners.
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