Increases Biometric Focus
Published 08-APR-2015 00:00 A.M.
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2 minute read
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Overview: Nemex Resources Ltd ("Nemex", "the Company") is an Australian company focused on biometric security through a strategic investment in Wavefront Biometrics Technologies Pty Ltd ("WBT"). WBT has developed a single sensor multi-biometric system built around a patented cornea-based technology and incorporating other unique aspects of the eye ("the technology"). Patents have been granted in the US, Japan, and Australia. The market for biometric recognition technologies is estimated to be worth US$7billion. Nemex has secured earn in rights for up to 51 percent of WBT.
Catalysts: Internal validation of the biometric technology within a mobile setting has concluded on schedule, illustrating comparable performance to industry-leading iris technologies and advantages including universal application and proof of liveness. Results have prompted Nemex to increase its WBT interest to 40 percent, proceeds from which are expected to fund independent testing and initial marketing to licensing candidates during H2 2015.
Hurdles: WBT’s technology has yet to be independently appraised and there is no guarantee lab performance can be replicated in a commercial setting. Further development and commercialisation of the technology require additional capital. The partial nature of Nemex’s equity in the technology may impede its capacity to attract fair value in its share price.
Investment View: Nemex offers speculative exposure to global biometric security markets. Independent appraisal of the technology over the coming months is a major value determinant, providing an impetus for subsequent industry engagement. We retain our valuation of $0.09/share.
THE BULLS AND THE BEARS
THE BULLS SAY
- Application of biometric technologies is broadening, particularly at the consumer device level
- Laboratory testing indicates WBT technology could deliver superior performances to existing commercial benchmarks
- Completion of internal performance appraisals in early 2015 provides a platform to commence licensing discussions
- Staged investment schedule with WBT provides a lower risk acquisition for Nemex shareholders
- Our valuation represents a significant premium to recent trading in Nemex’s shares
THE BEARS SAY
- Many competing biometric technologies are already commercially available or vying for development funds
- Laboratory performance of WBT’s technology may not be replicated in a commercial setting
- Technology and hardware associated with prototypes currently under development have yet to be independently validated
- Partial nature of current holding in WBT may impede valuations attracted by Nemex shares
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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
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