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Current Opinion:

Date Posted: 09/12/11

Imaging3, Inc. (OTC BB: IMGG)

Comment

One of my readers suggested that I investigate IMGG. I did so, and I am extremely intrigued about its technology & primary products. It produces & sells medical diagnostic imaging equipment & parts, as well as offers services to hospitals, surgery centers, research labs, physician offices, & veterinarians in the United States. The global market is awaiting its new equipment now. This is exactly what WallStreetCorner strives to find for its clients!

The company was formerly known as Imaging Services, Inc. & changed its name to Imaging3, Inc. in August 2002 to position it for its future direction, away from service & towards providing proprietary medical imaging products. It was founded in 1993 & is based in Burbank, CA.

I intend to closely follow this new imaging equipment technology company with current “penny stock price” so my forthcoming additional editorials are of value to my clients. This issue is really only to introduce you to a situation that I believe has the capacity to move ahead with great vigor.

What IMGG Is & Does

IMGG is a developer & marketer of its revolutionary device called “the DViS,” which acquires & displays 3D imaging in real time. It's a circular gantry system that scans around the body in 360 degrees every second, takes the images it acquires & instantly puts them into a 3D construct. It updates the 3D construct every second thereafter, thus providing real-time 3D imaging.
Most of the following description is used on the first page of the company’s website at http://www.imaging3.com:

The Dominion Volumetric Imaging Scanner, the DViS, is a patented breakthrough mobile fluoroscopy technology that produces high quality 3D images in real-time. It is the only product in existence that can produce a combination of high quality 2D, 3D real-time, & CT imagery in a single device. The unique engineering design accomplishes these capabilities while dramatically reducing patient exposure to damaging radiation, & providing a small, mobile footprint for easy transport, all at a cost of about one third of existing CT devices. This company has a substantial number of patents in place for this special technology.

IMGG’s Innovative Advantages

1. Its technology has resulted in a product that is far more useful during surgical & diagnostic procedures than other products. As an example, the DViS produces & displays a 3-D CT scan slice/construct time in less than a second. Compare that with Toshiba Device Division’s product that has a scan slice time of 3 to 4 seconds & its construct takes more than couple of minutes. Incidentally, CEO Dean Janes already has Non-Disclosure Agreements with both Toshiba & GE.

CEO Janes said: ”To have guidance in 3D instead of in a single dimension, means that you can see depth & direction simultaneously. It gives the surgeon, for example, the potential to increase not only the accuracy of his or her procedure, but increases throughput as well. That’s because it gives the surgeon anatomical landmarks. The surgeon is thus able to view those landmarks as they are moving into the body. That includes such simple things such as doing an injection run, or a needle placement, or a catheter placement. That allows the surgeon to see in real-time the depth & direction in 3D, & in real time.”

2. A big advantage is that the DViS is mobile. It's not a fixed system. It doesn’t have to always be in the same room, which can result in specific procedures being done, such as diagnostic ones, as well as not being limited to the number that can be handled per day. The fact that it is mobile makes it possible to do several diagnostic procedures in one part of the day in one location, & be used in other areas in other parts of the day. In addition, since the unit is not only mobile, but can be used with the simplest electrical source, & is easy to move around an operating room, units can be permanently located in one or more of the operating rooms of a facility to provide great help to the surgeons. Every hospital & clinic in the U.S. & then in the world can afford to own & will benefit from the use of one or many of these DViS units.

3. The introduction of this new DViS has been developing during the last five years through RSNA conferences, & Dean Janes has already received verbal indications of hundreds of unit orders. CEO Janes has not accepted offers of letters of intent to buy because he insists on waiting for FDA approval, which is the company’s number one priority at this time. I like his position on this, because it reflects his goal of doing what is in the best interests of shareholders.

4. The FDA is difficult to work with, so CEO Janes stated: ”What we've done is gone out & sought an expensive but perhaps more sensible route. We are getting such consultants as an FDA law firm to help us negotiate with the FDA, technical writer groups, & a new radiology group to do image review for us & set up protocols. We've stepped it up so we can get this product through the FDA to be able to move it to the market.”

5. Assuming that the new approach works with the speed anticipated, CEO Janes has targeted first year sales (following FDA approval) at under a couple of hundred units, although he expects more than 1,000 units after his fifth year following FDA approval.

6. I like the company’s efforts to keep shareholders & prospective investors fully & promptly informed of all aspects of the company’s activities with the FDA, & other important developments. One example of such efforts is a weekly video update for shareholders.

7. The market potential is rather extensive. It evidently is a $20 billion industry. The company hopes to capture at least 5% of the market within the first two years following FDA approval, & about 10% within four years. Once FDA approval is in hand, management plans to go after EMEA (European Authorisation) ASAP thereafter. The European market is roughly about 70% of the U.S. market. In the U.S. there are a total of about 15,000 major/medium range, university affiliated hospitals. Each of them can use a minimum of four & up to as many as 12 units. This does not include small healthcare/hospitals.

8. There are other markets as well, including military, aerospace, airport screening, research, electronics, etc. The eventual buyer of this company will control the very valuable patents.

9. The DViS is less expensive than other products that serve the medical imaging market-the projected approximate price of the DViS is about $500,000 (about a third of the cost of a CT scanner, which is about $1.5 million for a brand new system). CEO Janes said: ”Our device at about $500,000 is a competitive price, & it also has the advantages of being quite mobile, being able to use regular wall power as opposed to exotic power like three phase, & it provides one with state-of-the-art imagery in 3D real time.”

10. The size & weight of the DViS is much less that that of other imaging units. If you have ever, as I have, had tests conducted by one of those units where you closely fit into a very loud (& hot) tunnel, you know what I mean. His idea of having three-dimension views of a portion of the body available within a second during a surgical procedure is a fantastic advantage to the surgeon & his or her participants during a surgical procedure.

11. The DViS has a low dosage of radiation, another super valuable advantage. Current medical imaging equipment advocates are expressing increased concerns about human exposure to the current CT & X-ray equipment radiation outputs. The DViS will quickly capture their support.

12. From the vantage point of the shareholder or the investor, the fact that the DViS has what has been described as a very attractive gross profit margin of close to 50% is quite an advantage.

My Opinion

I like what I have seen so far, & have already decided to continue investigating the progress of this emerging growth situation. It frankly looks like one of those finds that seldom come along. I suggest that you do some homework on it yourself.

I recognize that if one looks only at the information contained in the SEC submissions, one would see some aspects that if one did not follow & understand the rather outstanding potential of this situation, one might stay away. I always like to look ahead of the required SEC submissions. I certainly agree that in the case of more mundane companies, one should pay attention to the SEC submissions, but I assure you that this is one that has an entirely different set of facts, including many that have the potential to develop unusual revenue & profit growth.

IMGG at 3:49 p.m. on 9/12/2011 was 0.086 on a volume of 324,950 shares. The average volume (3m) was 502,442 shares, & the market cap was stated as $33.48 million.

I suggest that you look at the company’s web site at: http://www.imaging3.com – the photos of the equipment are well worth looking at, & you can view the company’s ARM products – I did nor cover them because the potential of the DViS equipment is where the big potential lies in my opinion.

Contact

IMGG is located at 3200 West Valhalla Drive, Burbank, CA 91505
call 818-260-0930 or Fax: 818-260-0445

My comments in this column are strictly my personal opinion. At times, I will include forward-looking information as that term is defined in the Private Security Reform Act of 1995. Such information & the related company are subject to many risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, local & foreign factors, & other matters will not differ materially from those suggested in any of my forward-looking statements. Such differences are the result of all sorts of factors (some examples: market conditions, competition, advances in technology, acquisitions, mergers, potential litigation, personnel changes, market changes, capital availability, etc., etc.).

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