Deltex Medical-Optimal Growth Stock

THE COUNT--->FEBRUARY 30TH

I just want to respond to your post above and then I will try to respond as best I can to address some of the points and issues that Kasman has raised as well.

Obviously, I agree with you about the 10 bagger potential of the stock, and in this case, it really is a case of wondering when this will really start to soldier forward. That's investment I'm afraid, and so far, it has been disappointing waiting for this to happen, and even though progress has been slower than many of us expected, progress is being made and this progress cannot remain unnoticed forever.

You say....'Now, I wouldn't recommend that anyone buys this share. Although I hold a fair amount, I've written the money off, because the situation seems hopeless. And currently I would be very happy if someone would take the company over for 25p. There hasn't been contract news for well over a year, Deltex have been banging on about their technology for years and years with little success, and worst of all their main customer is the NHS. '

Well, if it has the potential for such growth, as you have also pointed out, then I cannot see why it shouldn't be recommended to anybody who is not a short term trader. I strongly disagree that the situation is 'hopeless'. We have a company, which organically alone, taken as a base case scenario, is growing at 20% - 30% pa. That should ultimately limit any downside and because of this, the company is not an all or nothing case. The existing turnover alone (and future base case growth alone), when viewed against the fact that the bulk lies with the NHS which is notoriously difficult to get into (as we well know), is worth a good deal of money to any company buying this out. Medical device companies are usually sold on multiples of 4 - 6 times turnover on a more mature business than that of DEMG's. So there is already value there anyway.

But the clinical supportive evidence continues to mount, along with ever stronger clinical support (along with growing sales, albeit not as much as most of would wish, but, hey, that's just the way much investment goes otherwise we would all be millionaires). So despite the much publicised problems of the NHS, the relevant authorities cannot turn their backs forever, especially with ever growing calls for cost savings. And even if the NHS continues to merely grow by say a lowly figure of 20% pa, what then of Europe, the USA and the ROW?

And then, what about the extra massive kick in potential that the SupraQ could give us?

Yes, this has been frustrating, but the potential is all there. Unfortunately, it may take something that we all have ever diminishing supplies of with the passing of every day.....a bit of TIME!!

On that note, I certainly would not be in this stock if I thought it was only worth 25p. The risk/reward is still awesome. We forget that all the time, because we are inthat period when nothing much has been happening except for ever growing frustration.

Unless there is a material turnaround in the ordering policy of the NHS and their financing problems, we are unlikely to be rewarded with regular announcements of large contract wins. Growing at the organic rate above, most of the sales will be for a couple or more monitors, and this is not announceable via RNS. We may well start to get larger orders from outside of the UK which could be announced via an RNS, but most of these territories are still at a relatively early stage in implementing the CardioQ.

Yes, DEMG have been banging on about their product for what seems like 'years and years with little success', but such is the nature of establishing a new medical technology. Unless something has the potential for an immediate and noticeable impact on the health of people, usually by saving many, many lives, rather than a more subtle (but still massive) advantage such as that of the CardioQ, then progress is invariably painfully slow, especially when dealing with cash strapped and incompetent decisionmaking bodies. But I stress again, DEMG are most definitely making progress, but not quick enough to turn us into multimillionaires overnight. And that's the crux of the matter....it is not that they are going nowhere....they just are not getting there as fast as many of us expected.

But the main hurdle to overcome, in the greater scheme of things, to getting the technology implemented as our much desired standard of care, has in the main been overcome....namely the support of the clinical community. This of course does not mean that each and every doctor will be convinced (hence the comments from Kasman), but an actual clinical demand in the hundreds of thousands of units more than demonstrates that a more than substantial strata of the clinical professional community is supportive of our technology and wants it implemented but they are fighting financing wars with their own purse string holders to release the required funds.

DEMG have adopted a very prudent (and to us very frustraing) approach to this, but they have stressed that if they were to turn more agressive in their approach, they risk alienating those doctors, and that is something they will not do.

Even though I fully understand some of your pessimism, I certainly don't even remotely think it is all doom and gloom. The potential is all there, and if anything, has strengthened in the time we have all been involved. But unfortunately, the SP hasn't and this is the real issue here. But the stock, even going along at the present pace of development simply cannot stay still for ever.

I'll come back with a response to Kasman as well.

Regards,

THE COUNT!