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Mackie Research: Small Cap a World Leader in Health and Safety Wearables
Contributed Opinion

Source:

Bill Newman Mackie Research believes Blockchain Holdings' TraceSafe tracking platform could tap into the "exceptionally large market" for contact tracing during the Covid-19 pandemic.

Note: This article is not research and any companies mentioned are not rated.

TraceSafe Technologies Inc. is a wholly owned subsidiary of Blockchain Holdings Ltd. (BCX:CSE), and owns 100% of the rights and interests in the real-time location tracking technology known as TraceSafe. TraceSafe includes original hardware such as wearable products, like a bracelet band or an access card, which has an embedded chip that can track the wearer's location.

Also, over a 10-year period, TraceSafe has developed a robust and secure cloud-to-device platform that is designed to be highly flexible. This allows the technology to be tailored to many different applications, including contact tracing, quarantine management and real-time location services for company employees.

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The TraceSafe technology has been proven effective for tracking purposes in maternity wards and monitoring senior citizens in care facilities. With the outbreak of the Covid-19 (C-19) pandemic, the TraceSafe technology is now being used to assist governments and health agencies to temporarily track international travelers who are required to self-quarantine. TraceSafe bracelets have already been deployed in Hong Kong, and the company recently announced an expansion into Kuwait.

The potential revenue growth from the government sector is large, but the potential of the corporate/enterprise sector could be even larger. TraceSafe is in discussions with multiple companies who need real-time contact-tracing technology to aid in social distancing in the workplace. This provides workers with a level of safety while allowing companies to reopen.

Given the urgent need for companies to resume operations, we believe the emerging category of health and safety wearable technology could be an exceptionally large market, providing TraceSafe the opportunity to continue its rapid expansion.

Key Catalysts/Opportunities

  • TraceSafe Self-Quarantine Monitoring System: TraceSafe technology is ideal for monitoring international travelers who are required to quarantine after travel. The self- monitoring management system registers a user through an identification bracelet. The bracelet tracks the time and location of the user and the logs are sent to a central monitoring system. TraceSafe allows a user to declare once they have entered quarantine, and subsequently prompts periodic check-ins. The tag is inexpensive to produce and is disposable, which provides a level of privacy to the user after the quarantine period has ended.

  • Government Market: Already Deployed in Hong Kong; Rapidly Expanding into Other Countries: The Hong Kong government is already using TraceSafe disposable bracelets to manage and enforce its quarantine program for foreign visitors. Over 100,000 bracelets have already been sold in Hong Kong. Based on the success of this program, TraceSafe expects to expand into multiple countries in the coming weeks and months.

    On May 21, 2020, the company announced a pilot program with the government of Kuwait to utilize TraceSafe for a safety and contact-tracing program across the country's food delivery workforce. The company also announced a pilot project with a Southeast Asian country (confidential at this time) to use TraceSafe for self-quarantine management.

    TraceSafe is in talks with over 20 other governments located around the world that are considering the deployment of a tracking pilot project.

  • Corporate Market: Real-Time Tracing Allows Businesses to Reopen: Corporations are proactively seeking real-time contact tracing technology to allow for the continuation of business during the C-19 pandemic. The system will alert those who may have been near a coworker who tested positive for C-19, allowing unexposed workers, and the corporation, to continue operating. Potential clients include manufacturers, schools and shopping centers.

  • TraceSafe Announces Contract with the Toronto Wolfpack: On June 1, 2020, TraceSafe announced it has executed a contract with the Toronto Wolfpack Rugby League Football Club to supply wearable tracking products and services to staff and fans for the 20202021 season. This should allow Lamport Stadium to safety reopen for training and future games. TraceSafe does not require the use of the fans' mobile phones, thereby eliminating privacy concerns.

  • New Chief Revenue Officer: Gordon Zeilstra has been appointed CRO. Gordon has over 20 year of experience and was previously with SAP, Taleo and Monster.com.

Details

  • TraceSafe Bracelet/Tag Are Low Cost and Disposable: TraceSafe offers a complete cloud-to-device solution with real-time location tracking that gives instant alerts and notifications to administrators and users. The bracelet is tamper-proof and paired to a user's mobile app, which regularly sends location data to the cloud. The tags are inexpensive to manufacture and are designed to be disposed of after use, ensuring privacy for the user. The bracelets are hospital-grade, hypoallergenic, waterproof and utilize the Bluetooth low-energy platform, with a battery life that typically lasts about 20 days.

  • Hardware and Software Revenue Streams: TraceSafe manufactures and sells its propriety hardware, including the disposable bracelet bands. The company will also receive revenue from SaaS (software as a service) licensing.

  • Airbeam Wireless Technologies: Blockchain owns a 13% equity stake in Airbeam Wireless Technologies. Airbeam is a private, Canada-based company that is a manufacturer of 5G semiconductors and a small-cell network innovator. Airbeam recently completed an equity financing at a price of US$1.00 per share (~CA$1.38/sh), which values Blockchain's equity interest at ~CA$13.5 million. Blockchain sees large upside from its passive investment in Airbeam.

Note: As Newman points out, the size of the government market is large but the potential size of the corporate sector is much, much larger, as shown in the slide below taken from a recent presentation from TraceSafe. With the Toronto Wolfpack contract, TraceSafe has only just begun to tap into the enterprise/corporate market.

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Disclosure:
1) Bill Newman: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. Mackie Research does not have a banking relationship with any company mentioned in this article. I determined which companies would be included in this article based on my research and understanding of the sector.
2) Mackie Research: This article is not research and any companies mentioned are not rated.
3) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Blockchain Holdings. Please click here for more information. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Blockchain Holdings.
4) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
5) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Blockchain Holdings, a company mentioned in this article.




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