The explosion of AI-focused companies in the last two years can make it difficult to suss out opportunity. Although it’s hard to find a signal amidst all the noise, sometimes a potential Cinderella story emerges from the mist.
Datametrex AI stock (TSXV:DM) is down by 87.50% year-over-year. Ordinarily, that would be cause for alarm, although there are signs that the company is on the cusp of a turn-around to profitability.
Datametrex is engaged in technology solutions, artificial intelligence and healthcare. The company is specifically focused on developing tools and solutions that enhance operational efficiencies and business outcomes on a global scale.
Shares last traded at .002 CAD ($.0152). The company has a market cap of nearly $4.6 million and is trading at the lower end of its 52-week range (0.17-0.010) on average volume of 66,005 shares.
Announcements from the company last week include a detailed game plan for boosting revenues in core business lines as well as a private placement in play to raise up to $1 million.
Datametrex said it will undertake “a significant reorientation” to focus on the Healthcare and AI & Technology sectors, coupled with a robust financial restructuring aimed at streamlining operations and improving cash flow.
Expanding Healthcare Division
Datametrex has achieved success in its healthcare division, particularly with its clinics in Alberta, Canada. As a result, the company has decided not to spin-out this division. The Calgary and Edmonton clinics have consistently generated solid revenue. With new locations set to open in 2024, this growth is part of a deliberate strategy to leverage the division’s success and resilience in the current economic climate.
The ongoing development of wellness centers within the company’s existing clinics marks a strategic enhancement, with anticipated synergistic effects alongside the medical wing and pharmacy. The integration of services under one roof provides added convenience and value, appealing to patients and healthcare professionals.
Enhancing the Korea Technology Division
In Korea, the company’s AI & Technology division continues to strengthen its market presence and boost its profitability, achieving preferred vendor status with major multinational conglomerates, such as Lotte, as well as acquiring new clients in untapped sectors, including the energy and financial industries.
These achievements demonstrate the company’s capability to deliver quality services and adapt to diverse markets. The company’s Korean operations also reflect a strong international growth potential and ability to establish and maintain significant business relationships in competitive markets.
Strategic Shifts and Financial Management
As part of its comprehensive financial restructuring, the company said it will implement several key strategic shifts. This includes a strategic move away from Nexalogy’s erratic government contracts, “which have historically shown poor performance and negatively impacted the company’s financials with a substantial negative cash flow,” Datametrex said in a statement. “While the company has also paused development work on AnalyticsGPT, it still preserves Nexalogy’s patented core technology, and is actively seeking opportunities to repurpose the technology within the private sector, most notably the e-gaming industry.”
These decisions, the company said, are driven by a commitment to focus on sectors with higher growth potential and stability. Simultaneously, the company plans to replicate successful strategies, as demonstrated in the Korean market, replacing the vacated space from Nexalogy’s government work with more promising, stable, and profitable ventures.
Private Placement Financing
As part of its capital raising efforts, Datametrex also said it plans a non-brokered private placement financing of up to 50 million units at 2 cents per unit for proceeds up to $1 million.
Each unit consists of one share and a warrant to acquire an additional share at $0.05 for two years from the date of issuance. Gross proceeds from the private placement will be used for general working capital. The private placement is expected to close by Feb. 15, pending approval of the TSX Venture Exchange.
Securities issued in the private placement will be subject to a lockup of four months and a day.
Looking to the Future
“Our strategic refocus on Healthcare and AI & Technology, in line with our ‘deep and narrow’ strategy, is a decisive step towards creating a more streamlined and financially robust operation,” said CEO Charles Park. “By targeting sectors where we have strong potential and minimizing financial burn, we are setting the stage for sustainable growth and long-term profitability. Leveraging my extensive experience in the e-gaming space, we are also exploring various opportunities in this sector, which we believe will open new avenues for growth and innovation. We are dedicated to this path, confident that it will lead to enhanced value for our stakeholders.”
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