Control Bionics board member who is incidentally also Chairman of Phoenix Development Fund and Nightingale Partners, Lindsay Phillips has upped his holding in the company. Phillips has been investing in Control Bionics since 2005 and with this addition now holds almost 18M shares valued at around $6.5M or over 20% of the script.

This is the first time I’ve looked at the company. While it is early stage, and they have a small market cap of only $20M, I wanted to look at what has happened to the share price and why, for someone who obviously has a close understanding of the company, is a good time to be buying.

The company produces devices that assist people with disabilities which hinder verbal communication such as cerebral palsy, spinal injuries, and motor-neurone disease to communicate. This is called augmented communication.

The primary product is a wireless, wearable solution called NeuroNode. The devices are being used in conjunction with eye tracking technology to provide faster communication and less fatigue for the user.

The company has been looking at international expansion, both in the US and Japan. The company has approval from the US Food and Drug Administration (FDA) and locally the Therapeutic Goods Administration (TGA). Funding for the devices is via insurance in the US and via the NDIS in Australia. Its position is there are more than 55,000 people annually (worth $1.2B) are diagnosed with conditions that fall into its key target user base.

The devices sell for approximately $20k and sales to date they have sold several hundred. The sales price is competitive with competitors' technology but provides additional benefits as opposed to eye sight technology as articulated earlier.

The company has begun building sales capability both in US and Japan.

CEO Rob Wong appears hands on. Probably not unsurprising given the team is still only about 40 employees. Wong has been in the business for over 5 years and came in to commercialise the solutions that were originally developed by founder Peter Ford who remains in the business.

The summary is the company is providing solutions that genuinely change people's lives. The hard thing here is how they get the devices to people who need them. Medical funding is a fickle place to live.

While they are a loss proposition and currently burning cash, they are making some progress, but a capital raise seems inevitable. For now, I will be looking on from the sidelines, especially to see if they can execute on their sales aspirations. Not saying he knows more, but Phillips position on the pipeline must be more favourable than mine.