ableX healthcare

ableX is a subscription-based digital healthcare solution for major neurological conditions such as stroke and dementia.

Minimum investment: $1,000.10

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Min target: $600,000 (9.10% equity) Max target: $1,200,000 (16.70% equity)
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$820,593 Offer live
$600,000 Min target (9.10% equity)
$1,200,000 Max target (16.70% equity)
$379,407 Still available for investment
1 day Time left
(unless fully subscribed prior)

Further detailed information is contained in the Information Memorandum (IM)

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Investment Highlights

  • Global digital health market (wireless/mobile) growing at CAGR 23.1% p.a.
  • Australasian target population 450,000, 96 specialist stroke hospitals, 5,000 nursing/home care providers.
  • 70% of stroke patients leave hospital with upper limb disability.
  • Volume of stroke patients will increase by 50% over next 15 years.
  • The cloud-based ableX solution provides 12-16 times as much upper limb rehabilitation per health dollar as current 1:1 therapy.
  • Currently rolling out to hundreds of patients in Perth and Melbourne.
  • Strategic target to achieve Australia wide public health funding in the near term.


ableX healthcare develops and markets a novel cloud based “plug and play” rehabilitation system to accelerate recovery from stroke and other neurological disabilities. The solution incorporates two wireless handheld devices to play a set of therapy-focussed games which provide intensive upper limb rehabilitation. This allows patients to recover physical and cognitive function much quicker than conventional therapies, with less supervision from therapists, thereby dramatically improving independence and quality of life for patients.

The ableX system is an end to end software-as-a-service (Saas) solution for continuous use from acute hospital care through to long term recovery in the home. Within the wider context of digital health solutions, this delivery model is referred to as “tele-rehabilitation”. The subscription-based platform gives patients access to the daily intensive therapy needed for fast recovery, allowing clinicians to monitor and personalise training programmes remotely. This is provided for a monthly cost equivalent to that of one conventional therapy session, and a hardware cost well below any equivalent technology. The solution is well differentiated and has the potential to reinvent the way neurological rehabilitation can be delivered.

The company has sold over 700 standalone device systems to hospitals, clinics and private patients. Royal Melbourne Hospital and the Perron Institute in Perth are the first major institutions to contract ableX to implement its cloud based platform, marking an important milestone in the company’s journey. Having evolved its solution considerably in its 7-year history, ableX has proven efficacy and is ready to be deployed at greater scale. These two contracts and the current capital raise will provide ableX with a solid platform to achieve significant growth in Australasia, and begin expansion to the United States and around the world.

The initial market for ableX is the providers of healthcare services to stroke and other neurological patients, from inpatient services to community health and homecare. Hospitals in NZ and Australia discharge over 50,000 stroke survivors each year. Based on overseas data, two-thirds of discharged patients are dependent on care services for basic daily activities. The affordability and accessibility of ableX mean that many of these patients will continue their therapy as a private subscription after discharge. A programme of ableX therapy provides 12-16 times more therapy hours per dollar than today’s health system can deliver; a clear value proposition for health services and individuals.

Once these current clinical partners are established on the cloud platform, all relevant hospitals and care service providers in the Australasian market will be approached. These clients will be used as a base to acquire larger health system customers in the USA.

Direct medical costs of stroke in the USA are predicted to reach US$184.13bn by 2030, 2.6 times the equivalent costs in 2012 (Ovbiagele, B. et al. Forecasting the Future of Stroke in the United States. Stroke 2013;44:2361-2375). If 1% of the US stroke population became ableX subscribers as a result of US insurers and health services adopting our solution it would generate $84m per year in recurring revenue for the company. Stroke is the first global opportunity for ableX. There is also potential for the same technology solution to address other conditions for which we have already shown efficacy, particularly later stage dementia, traumatic brain injury and multiple sclerosis.

In FY17 revenue of c.$95k generated an EBITDA loss of -$305k. With increasing adoption of the ableX solution in clinical sites across Australasia, we are forecasting positive EBITDA in FY20 and growth to EBITDA of c.$3.6m in FY22, on revenue of c.$6.2m.

In the current financial year the company will transition to a Saas business model to generate long term recurring revenue from the cloud platform. Forecast financial performance is driven by increasing hospital and clinic sales, with revenue being a function of: patients x (device revenue + (subscription revenue x treatment period)). The main dynamics driving the number of patients are the number and scale of client healthcare providers using ableX, and the conversion rate of patients continuing private subscriptions after discharge.

In order to execute this plan, we’re raising $600k to $1.2m through Snowball Effect on a pre-money valuation of $6m. This capital will fund operating costs over 2 years to ensure the success of the contracted rollouts at Royal Melbourne Hospital and the Perron Institute. A key deliverable from these rollouts will be to qualify the ableX solution for public health funding. The ableX system is funded for stroke patients by ACC in New Zealand. Funded procurement for the larger population of public health stroke patients is the next step. Over the same period ableX will transfer its existing customers onto the subscription platform, and target all relevant hospitals and health services in the Australasian market. In turn this client base will enable us to attract much larger health services clients in overseas markets. Some capital will be invested into product development and to validate clinical expansion into adjacent conditions.

We believe we’ve created a differentiated solution that benefits both neurological patients and clinicians along the recovery journey. Not only have we developed devices that accelerate recovery for patients, we are also improving clinical productivity, and there is clear potential to become part of best practice for stroke upper limb rehabilitation, in Australasia and eventually throughout the world.

This is your opportunity to help bring the future forward, by investing in a digital healthcare company that has the potential to transform health services and health outcomes for millions of neurological patients worldwide.


Photo of Elliott Kernohan

Elliott Kernohan CEO

Elliott has led the transition of ableX from a medical device product to a cloud solution which can become the new standard of care in neurological rehabilitation. Elliott’s experience as a leader in transformational businesses includes 7 years as General Counsel at technology startup Betfair, during its period of rapid global growth culminating in a £1.4bn IPO into the UK FTSE-250. Elliott is employed full time in the business.
Photo of Anne Recordon

Anne Recordon Principal Clinician

Anne is an internationally recognised specialist in neuro-rehabilitation, and has built a consulting, teaching and practising career by empowering, enthusing and challenging her patients. With Anne’s expertise, we continuously iterate our clinical methodology and our understanding of what patients and therapists actually need. Anne consults to ableX as required.
Photo of Carey Stevens

Carey Stevens CTO

A technology entrepreneur and Bioengineering PhD with over 20 years at the cutting edge of new research, development and implementation in public and private healthcare. Carey has wide experience of designing advanced software solutions, including some of the most forward-thinking technologies in NZ. At ableX he ensures our cloud platform is fit for purpose: scalable, resilient and low maintenance. Carey is a shareholder and is retained on a part time basis.
Photo of Paul Weatherly

Paul Weatherly Chairman

Paul owns Titanium Solutions, an Australasian enterprise health management software business. Paul’s first health software business was Software of Excellence, founded with his brother and listed on the NZX, and later sold to Henry Schein Corporation in a public takeover.
Photo of Kate Reid

Kate Reid Non-Executive Director

Kate is the General Manager for Orion Health in New Zealand, with responsibility for NZ strategy and operations and strong networks overseas. She has been a pioneer of personalised healthcare education and adherence in the UK and NZ, as Managing Director at Atlantis Healthcare. Kate will join the board on closing of this round.
Photo of Maxine Simmons

Maxine Simmons Non-Executive Director

A NZ biotech pioneer, adviser to government and professional director. Maxine represents CureKids Ventures and NZ Venture Investment Fund on the ableX board. Maxine has held numerous other health technology company directorships.
Photo of Sunil Vather

Sunil Vather Founder and Director

Sunil founded ableX healthcare in 2009 in response to his experience of the challenges of stroke recovery in family and friends. Early sales of the first handlebar devices were achieved in more than a dozen countries. Sunil now consults to government and industry on R&D commercialisation.
Photo of Operational Team

Operational Team

In addition to the leadership group, the company employs a small, fit-for-purpose operational team:

  • Full time Operations Manager with extensive experience of science-led startup businesses.
  • Contracted graphic designer who also provides junior platform development capability. This role may become part time employed from closing.
  • Contracted financial controller
  • Specialist game developer (part time, has agreed to join from closing).
  • Intermediate physiotherapist/client support role (part time) is yet to be filled.

The Problem

Patients have untapped recovery potential

Neurological patients, such as individuals that have suffered a stroke, are poorly served by the existing rehabilitation model of care. Even if a full recovery is unlikely, it’s well established that these patients become more independent and achieve a better quality of life when given access to intensive and personalised rehabilitation over a long period.

With healthcare systems around the world under pressure from escalating costs of care and ageing populations, health services are increasingly unable to help these patients reach their recovery potential. The recovery of arm and hand function is particularly neglected, despite its impact on a patient’s independence.

The key limitation is the health system’s inability to provide enough therapy over an extended period. The consequence of poor neurological recovery outcomes is a greater incidence of related medical conditions, higher dependency on long term care services, and the resulting impacts on households, community services and public finances.

The Solution

Use technology to help patients help themselves

Most stroke patients are thought to have a recovery ceiling, however those who spend longer doing more intensive rehabilitation recover faster and to a greater degree. The question of optimal dosage has not yet been answered by medical science: the adage which therapists recite to patients is “use it or lose it”.

At ableX we see an opportunity to provide patients with greater independence, and health services with more flexibility, using an effective and robust technology. Our solution is mobile and autonomous for both patient and therapist: it makes use of clinical expertise to prescribe, monitor and coach only when needed, and it otherwise frees the patient to pursue their recovery journey as best suits them.

ableX system

ableX is a “plug and play” software solution that innovates and augments usual care for neurological patients. The underlying clinical intervention is the patient’s use of two specially adapted wireless mouse devices to play a set of therapy games. Versatility and ease of use are standout features. Our initial focus is on recovery of upper limb and cognitive function in individuals impaired by stroke. A person’s ability to use both arms and hands, and to complete basic daily tasks safely and without assistance has a critical impact on a patient’s care needs and quality of life.

In therapeutic terms, the gameplay is designed to optimise physical movement patterns that accelerate functional recovery. The requirement to repetitively manipulate the devices to play the games means the patient necessarily uses their disabled arm and hand. The functional neural pathways so created carry over into daily activities. Gameplay is set at a level where the patient experiences success easily, which in turn stimulates more use of the affected arm and hand.

Cognitively the same applies. As the patient experiences success, the complexity in each game increases, resulting in longer attention span and higher levels of concentration and decision making. This carries over into daily life.


There are two handheld controllers which are used to play therapy games. Depending on the patient’s needs, they can use both or either as part of a comprehensive training routine. These devices incorporate the patient’s arms and hands to a degree and with an intensity not achieved in standard rehabilitation practice.

ableX armskate:

  • Designed for initiating early movement recovery in shoulder and elbow.
  • Pre-cursor to ableX handlebar.
  • At a later recovery stage also addresses wrist and individual finger activation.

ableX handlebar:

  • Designed for those beginning to recover some arm movement and grip.
  • Progressively increases range of movement, strength and control.
  • Assists balance and core body stability, also trains fine control movements.


On the patient side, the platform comprises a number of games that are controlled using the handlebar and armskate. These games are specifically designed to activate motor and cognitive skills, and can be configured to the patient’s abilities and goals.

Our approach to the user experience is to make gameplay clearly a game. As a therapy, patients find the games non-threatening, which reduces performance pressure and instead reinforces the neurological feedback of seeing their own limbs working so effectively.

Games are served over any mobile or wifi data network, using an Amazon Web Services cloud platform to a low-cost console that can be plugged into any digital TV.

Users can also use a standard PC. This architecture offers our users anytime/anywhere access, remote prescription and data analysis. Importantly from a healthcare procurement perspective, cloud delivery and low device cost enables subscription charging. This model benefits all stakeholders by rewarding successful patient outcomes and enabling cost control on a per patient basis.

The clinician portal includes tools which enable the care team to prescribe and refresh a personalised training routine of recovery-specific games, and to monitor and analyse the patient’s progress remotely. Our methodology focuses the therapist on prescribing a ‘Just Right Challenge’ for each patient. This frees the patient to do their rehabilitation training when it suits them, and it saves significant resources for the clinical team.

For the Perron rollout the company is producing an online training capability in several modules. Initially this will support and standardise the transfer of ableX system expertise into the health provider workforce, and it reduces the cost of in-person training in remote locations. The same material will be reconfigured as an online user manual.


The ableX system captures key metrics in a healthcare field that is currently data-poor:

  • The amount of time the patient spends performing active therapy - current clinical practice doesn’t capture whether services actually deliver the mandated amount of therapy.
  • The actual activities performed and at what level of frequency, difficulty and intensity – a clinician can assess progress and confirm adherence against a prescribed training programme.
  • Therapy-specific data – infers quality and range of movement, task initiation and completion, cognitive and physical complexity, visual perception, language recognition and attention span. This level of detail is novel to routine care and carries implications for future rehabilitation practice.
  • Clinical productivity – Therapist and administrator logins can be correlated to patient activity and outcomes.

Over time data analytics will offer insight into a host of factors affecting recovery, leading to better healthcare delivery. Valuable data sets like this currently exist for other chronic conditions, such as diabetes and heart disease, but not for stroke and related conditions.

Clinical Efficacy

To date there are 11 peer-reviewed papers, 2 book chapters and 1 published PhD thesis reporting the results of several clinical studies of the ableX devices and software in 3 countries. All have shown that the ableX system is effective to address neurological impairment. A full list of clinical publications is available on the company’s website.

Hand Hub Study

The leading independent research paper, known as the “Hand Hub” study, incorporated the ableX handlebar and the armskate, and ableX’s installed software app in a hospital-based programme for 92 outpatients at Royal Melbourne Hospital. Of these, 86 had long term stroke disability and 6 suffered from multiple sclerosis. This is a relatively large study in this field. The programme also included a third party device, the Saebo ReJoyce. Groups of patients visited the clinic for 2 or 3 sessions per week for 6 weeks. Each session was administered by just one qualified occupational therapist and an unqualified assistant.

The study showed clinically significant and very significant benefits for patients using a diverse suite of tests which included arm and hand function, mobility, cognition, quality of life and overall health.

The Hand Hub still continues as part of usual care for neurological patients at Royal Melbourne Hospital: the hospital has collected data now from over 300 patients. ableX has been contracted to provide its cloud-based solution for a follow up study at Royal Melbourne Hospital. This rollout has already recruited its first participants. The cloud platform is enabling the ableX treatment to take place in patients’ homes, with the research team monitoring patients remotely. This randomised controlled trial by a world leading clinical team is one of the two key opportunities for ableX, and will prospectively provide gold standard clinical evidence to support its widespread adoption in clinical care for stroke in Australia and internationally.

How it works

The ableX system aims to stimulate neuroplasticity, which is the brain’s enduring capacity to develop and strengthen new neural pathways. Research indicates that neuroplasticity is optimised when 5 factors are present:

  • Highly repetitive, to ‘groove’ a consistent motor control sequence.
  • Meaningful to the patient to ensure they are motivated to train.
  • Intensive, to create high frequency synaptic activity.
  • Complex, to engage multiple centres of synaptic activity within the brain: develops activity into a skill.
  • Specific, to focus the training activity on one or more elements of task performance such as strength, endurance, accuracy, function, range.

ableX also incorporates an additional element, that of autonomy - the patient’s own volition and choice in performing each task.


Subscription pricing

In the current financial year the company will transition to a Saas business model to build long term recurring revenue. Monthly subscriptions are charged at $100/month, and with a subscription contract the handheld devices cost $250 (handlebar) and $550 (armskate) respectively. Every patient needs at least one device, and roughly one in four will benefit from the use of both during a therapy programme.

The value proposition is significant. A one hour session of conventional therapy costs the health system $104. For $100 a typical ableX user completes 12 to 16 sessions of active therapy in a month, self-administered. Only around 50% of hospital stroke units manage to deliver an equivalent amount of active therapy during a typical 27-day inpatient stay. After discharge a stroke outpatient only receives between 4 and 9 hours of active therapy over 3 months.

Hospital clinics currently use one or both devices at a workstation, with multiple patients scheduled onto a given workstation through the course of a day. The cloud deployment model involves one or both devices going home with the patient. When partnered with clinical sites (such as Perron) as a customer channel we anticipate sharing 25 % of subscription revenue with the clinical partner.

Once the online learning modules are completed (January 2018), access to online training and therapist accreditation is a supplementary revenue opportunity, at $100-$250 per therapist per year.

Differentiated pricing according to customer type and service level will become an option as the customer base matures.

Standalone pricing

Historically the company has sold the complete ableX system for unlimited use on a single workstation (2 devices and installed software) for $2,000. We also offered the same systems on a rental basis to individual patients priced from $60-$140/month as a test of the Saas business model. We will continue to offer standalone units to some customers as a low risk entry to our sales cycle.


  • Engineers Australia Better Technology Awards 2010 – First Prize, prototype category
  • Grow Wellington Bright Ideas Challenge 2010 – Health Technology Winner and Overall Winner
  • Wellington Gold Awards 2012 – Emerging Gold Winner
  • ANZ Flying Start Winner 2012
  • Deloitte Fast 50 Rising Star Award 2012

The Market

The market for digital health solutions is on a persistent upward trend, driven by a need for high-quality, cost effective and efficient solutions to real healthcare challenges. The size of the global digital healthcare market is predicted to exceed US$379bn by 2024 according to research by Global Market Insights (November 2016).

US market data highlights this powerful trend: in the first half of 2017, US$3.5bn was invested in 188 digital health companies in the US, a record for number of companies funded and total amount invested. The investment case for health funders is an expected US$300bn annual saving in US national health expenditure due to the adoption of digital health solutions (Forbes, 2017).

Especially notable is the rise in mobile or wireless health technologies which put health management tools directly into the hands of end users. Uptake is being driven by the increasingly mainstream use of cloud platforms by health services providers to resolve longstanding barriers relating to scalability, cost and access, and by the focus on personalising care for patients. The ableX solution ticks all of these boxes. Analysts report that the wireless health market is currently enjoying growth of 23.1% CAGR, and will reach US$110bn globally in 2020 (MarketsandMarkets, March 2016).

Within this overall acceleration in digital health, ableX targets healthcare services for stroke, from inpatient to community health and homecare. Hospitals in NZ and Australia discharge over 50,000 stroke survivors each year, and 70% of these are dependent on care for basic daily activities. This has created a population of more than 450,000 Australians and New Zealanders living with chronic stroke disability, a group which incurs $1.3bn in direct healthcare costs each year (National Stroke Foundation (AU) / Health Research Council of New Zealand). This is the immediate addressable market for ableX.

In the higher-spending US market the number of stroke disabled is 7m, and forecast to grow by over 50% over the next 15 years due to demographics, lifestyle factors and improvements in life saving medicines.

The American Stroke Association projects spending on the direct medical costs of stroke will increase from US$71.55bn in 2012 to US$184.13bn in 2030 (Ovbiagele, B. et al. Forecasting the Future of Stroke in the United States. Stroke 2013;44:2361-2375). Nursing home care (i.e. long term costs) make up more than half of this amount. Also, while strokes are typically regarded as age-related, the incidence of stroke is getting younger.

NZ Treasury data shows that stroke in working age people has a greater and longer lasting economic impact on public finances than other major health conditions, including diabetes, heart disease and the main forms of cancer (Dixon, S., The Employment and Income Effects of Eight Chronic and Acute Health Conditions, NZ Treasury Working Paper 15/15, December 2015).

The health system response to these pressures is to discharge patients sooner to control costs and reduce strain on hospital resources. Rehabilitation services are highly bed and labour intensive, making them especially exposed. ableX addresses that pressure by increasing the intensity and quantity of therapy that a given care team can deliver to many patients at once, and it delivers that expert input continuously from the hospital and into the home.

Target customers

The most common patient experience is for public health to support a stroke patient through a hospital stay to living with disability at home. ableX targets customers at four points on this pathway:

  1. Hospital patient flow: the continuous admission and discharge of patients through institutional inpatient rehabilitation services. The typical stroke length of stay is 27 days: it is here that patients make early recovery progress and establish the habits that influence their longer term recovery. Australia has 91 specialist stroke inpatient hospitals which each discharge at least 75 such patients every year, either to home or to residential care. Royal Melbourne Hospital (a client) discharges several hundred. These patients go on to receive outpatient rehabilitation for 3-6 months.
  2. Residential care: long term hospital or in-home patients who are in the publicly funded or insurance-funded care of a service provider such as MSWA (an ableX partner in Perth). Depending on age and degree of disability, these patients have tiered and often elective funding with which they purchase services to meet their needs.
  3. Community rehabilitation: independent community-based practices provide outpatient rehabilitation during the 3-6 month funded period, and also privately. For these practices ableX acts as an extension of their existing services.
  4. Home subscription: a proportion of outpatients will continue self-funded ableX therapy as a subscription after discharge as an outpatient. ableX is one of very few activities for stroke that is affordable and suitable for continuous home use.


Royal Melbourne Hospital / University of Melbourne: A research team led by Prof Mary Galea has commissioned the ableX tele-rehabilitation platform to facilitate a randomised controlled trial which will enrol 200 outpatients to use one of two digital health interventions in their homes, remotely prescribed and monitored by research staff. The project purchases ableX devices, consoles and cloud accounts for the study and ableX provides technical support. Prof Galea and her colleagues are recognised internationally for their research. This is a collaborative relationship with a clinical team that shares our strategic vision.

Perron Institute and MSWA, Perth: ableX will be the basis of a new rehabilitation service offered by Perron and distributed through MSWA, a leading care provider in Western Australia, to initially 20 stroke and multiple sclerosis patients, and subject to achieving milestones, a further 400 patients by the end of FY19. The initial phase is funded by LotteryWest and MSWA, and the overall programme carries a detailed business plan targeted at gaining Australia-wide health funding for the service. MSWA has a record of rapid expansion, having grown its provision of health services to the neurologically disabled from AU$8m in 2010/11 to AU$26m in 2015/16. Perron has positioned itself as a growth partner for ableX across Australia, a market which changed in 2016 to incentivise increased patient choice through the National Disability Insurance Scheme.

Healthvision: Under a 2015 relationship agreement Healthvision has rented ableX standalone systems to enable a number of its long term high needs patients. Claudia Wys, Healthvision’s CEO shares our goal of incorporating new digital health solutions into existing funded services in NZ, starting with ACC (which already funds ableX for applicable patients). Healthvision NZ has a sister operation in the UK.

Callaghan Innovation: ableX has partnered with Callaghan Innovation (formerly IRL) since inception. The prototype ableX handlebar and armskate were an invention of the IRL Assistive Devices team. The intellectual property for these and two other devices is licensed on favourable terms from Callaghan Innovation. Separately we have received targeted R&D project funding and a doctoral research grant through the relationship. We anticipate Callaghan’s continued involvement on a project by project basis.

Shamrock Industries: Shamrock is a Christchurch engineering firm with particular expertise in small volume medical device manufacture, with whom we have established a strong relationship through the development and manufacture of the armskate. We see potential for future ableX designs to be manufactured cost effectively to a high standard in New Zealand by engaging Shamrock and its local partners.

Other: We maintain relationships with several organisations who offer capabilities and networks in support of our core mission. These include NZTE, the Consortium for Medical Device Technologies, MTAANZ, HINZ, and the Stroke Association of Victoria. We also test clinical and technology ideas within clinics with whom we have close ties including ABI Rehabilitation (NZ), Prince of Wales Hospital (Sydney), and Advance Rehab Centre (Sydney).

Competitive Advantage

The ableX solution stands apart from its competitors. Foremost in the context of rising healthcare costs is its affordability relative to comparable device competitors, and also relative to equivalent therapy costs. Uniquely, ableX also reduces the patient’s dependency on the therapist because the equipment can be used at the patient’s home, across a range of impairment, and with a clinical level of efficacy. Addressing this reliance on 1:1 contact by empowering patients and carers is the key to achieving better outcomes within the current health system. These points of difference are a consequence of several factors: ease of use and accessibility, price, design and methodology.

That original concept of the ableX devices in long term in-home use also means the subscription model extends our value proposition beyond a one-time sale transaction, as is the case for other device options. We have sector-leading partners who endorse and want to harness these unique differences.

To maintain our competitive position, ableX is focused on retaining the simplicity and patient-centric focus of the solution. Clinical customers with experience of using other technologies distinguish the ableX devices for making a game-based therapy pathway accessible for many patients, whose more severe disability excludes them from those competing solutions. This means ableX is both differentiated from and complementary to its rivals. Over time, the data collected in the platform will also allow us extend our leadership in a continuous cycle of competitive renewal. From a certain point of critical mass, the body of therapist, patient and caregiver users will become an ableX community with network effects.

Competitive Landscape

Upper Limb Therapy



Patient Upper Limb function Required

Therapist Dependency

Care setting

Published efficacy





AUD 16k+ service cost





Good, non-RCT*

Complemented by ableX (Hand Hub study)

Tyrosolution (Tyromotion)

Handheld/ assisted

AUD 10k-200k+

+ service cost





Small RCT

ableX a partial substitute



Force sensors

GBP 25k

+ service cost





Small non-RCT

Measurement rather than therapy

Armeo (Hocoma)

Assisted robot

USD 80-120k




Small RCT

ableX a substitute

MIT Manus (InMotion)

Assisted robot

AUD 135k





multiple RCTs

Complex to use


Free motion camera

AUD 25k

+ per user cost






ableX complements

MindMotionPRO (MindMaze)

Free motion camera

USD 85k

+ USD 2500/mo





ableX complements


Free motion camera

USD 280 console + USD 50/mo



Clinic/ home


ableX complements



AUD 800 device + AUD 100/mo




Multiple, non-RCT

Most versatile,

best value

The journey so far

ableX introduced the handlebar device in 2010. If stroke survivors could get back some use of their arms and hands then they could be more independent, healthier and life would become easier. The prototype handlebar and the first ableX games were developed at IRL, a crown research institute, in 2008-9. The early clinical studies produced promising results, and commercialisation began.

Validation came quickly through sales in 12 countries to patients living at home, typically several years after their stroke. We observed ableX having a benefit not only for patients’ physical function, but also for their concentration, their self-confidence and overall well-being. Having the patient play ableX games also revived tired spouses and caregivers. We learned to tailor the challenge to accelerate a patient’s recovery, and this was the origin of the ‘Just Right Challenge’ methodology we now train therapists to apply. In 2015 the armskate was launched to cater to patients with no arm movement early in the recovery process, and also to enable hand and finger rehabilitation for more capable patients. ACC began funding ableX for its stroke patients in 2015.

Increasingly from 2013 hospitals adopted ableX as an intensive therapy option, and in 2016 the publication of the Hand Hub study at Royal Melbourne Hospital comprehensively validated ableX as a clinical intervention.

The next step was to package the devices and games within a cloud based service, where the therapist or clinical team has insight into the patient’s progress and the ability to adapt the therapy programme remotely. The cloud service allows for access in any healthcare setting, as well as more accurate, personalised delivery.

This cloud solution is now implemented to enable daily home-based therapy for a major clinical trial at Royal Melbourne Hospital. Its first participants are recruited, and we are preparing a similar rollout of an ableX rehabilitation service led by Perron Institute and MSWA in Perth, Australia before promoting it more actively to our wider client base.


ableX is a pioneer in its field. This requires the ability to drive change in an opaque clinical and commercial environment.

Seek Credible Healthcare Partners: The healthcare sector is risk averse and prefers change to be led from within its own. We’ve established key, credible healthcare partners who share our clinical and strategic objectives. These are mutually beneficial relationships which in turn influence other health services, add essential credibility in the eyes of patients, and open established networks, funding and distribution channels.

Clinical Acceptance Requires More Than Efficacy: Unless it becomes part of routine care, a device technology will remain on the shelf. We develop clinical workflows, share our methodology and provide training all as a package, aimed at establishing ableX as repeatable best practice. Clinical traction comes from addressing the real world needs of the therapy team.

Health Funding Requires More Than Clinical Acceptance: Delivery of manual 1:1 therapy is the main KPI by which neurological rehabilitation is currently organised and funded in Australasia. As such the idea that technology can increase the quantity of therapy delivered at a reduced cost per patient is an unexpected challenge for funders. Fortunately digital health is developing a momentum that is changing healthcare delivery across a host of chronic diseases and conditions.

Design Simple: Competitors’ devices appear to be designed towards the expertise of clinical specialists rather than for the patient or the ordinary health worker. At the coal face rehabilitation is a volume game, and real clinical results come from technologies that are easily set up, robust and used often and instinctively.

Access to Elderly Disabled Patients is Difficult: Neurological patients become isolated and sceptical after discharge: individual customer acquisition cost is high. Health services set low expectations for future recovery. By focusing first on building a recurring flow of users from leading hospitals and health services we will gain access to the much larger community of stroke disabled.

Growth Plan

Reimbursement is a key milestone for every new health technology or service. It means that the intervention becomes funded as a part of routine care for a population of applicable patients, rather than paid for directly by the patient or the health system on a case by case basis. The primary objective of the Perron collaboration is gaining Australia-wide reimbursement for ableX.

For the next 2 years ableX is laying a foundation with client health services in Australia and NZ that will prove our capability to service larger health networks in the northern hemisphere. The short term goal is to achieve sustainable patient flow from 8 health services in FY19, and then to grow this to 22 providers in NZ and Australia by FY22. This growth will be stimulated by migrating many of our existing hospital customers onto the cloud platform.

Now that we have secured two key client sites (Royal Melbourne Hospital and Perth’s Perron Institute), the immediate focus is on sustainable implementation of the full ableX system (both cloud platform and devices) for these programmes.

Subsequent customers will be clinical clients or home subscribers. Interest has been shown by a pipeline of clinics who already use the devices and games on a stand-alone basis. Private therapists and independent eldercare services will likely adopt the model being pursued in Perth, to generate new revenue streams for themselves. Public hospitals will be focused on improving productivity and cost-benefit KPIs in the pursuit of better patient outcomes.

Following their discharge from the health service we aim to convert patients onto individual subscriptions. For people with neurological disability ableX is the only proven and affordable technology for long term home-based recovery. We have sold and rented ableX devices to several hundred individual users at home, but the key to unlocking the scale of this market is the clinical exposure gained within the hospital context.

There is scope to broaden the market for ableX in several ways. We have plans to enhance the device portfolio and the games in order to fit more easily into current clinical priorities (including lower limb mobility) and offer a longer recovery pathway for more patients. We also have strong early indications of efficacy in late stage dementia, multiple sclerosis, and traumatic brain injury, and will quickly develop and test business cases for those market segments.

US Expansion

The competitive market for patients and health spending in the United States creates an emphasis on improved outcomes, patient retention and reducing cost of care, that doesn’t exist in single payer health systems like Australia and NZ. Those incentives drive a culture of investment in emerging health technologies: in the first half of 2017, US$3.5bn was invested into 188 digital health companies in the US.

The US is therefore our priority for expansion beyond Australia and NZ. We will identify entry points using our existing networks once ableX is implemented at the two key Australian sites. ableX is also a validated member of the HealthXL innovation community which exists to engage smaller companies and investors in solving the top of mind challenges faced by clinical opinion leaders and major pharmaceutical and device manufacturers.

Two factors that loom large for US entry are regulation and local market efficacy. The ableX handlebar device and its software are already cleared for sale by the US FDA. Later in this investment cycle we aim to extend that clearance to the armskate and the cloud platform. ableX intends to establish up to 5 independently-funded research programmes within leading US clinics by FY22, as a springboard for US expansion.

The timing of entering the US market appears favourable. ableX’s competitors are investing to create a US tele-rehabilitation market segment. We can benefit from their investment by entering the market with a differentiated, more effective and lower cost intervention.

Melbourne rollout timeline

The rehabilitation service at Royal Melbourne Hospital has an international reputation for its work in stroke and many other neurological conditions.

In late 2016 the Hand Hub clinical team commissioned a randomised controlled trial of a full ableX tele-rehabilitation service in the cloud, involving 200 patients from Royal Melbourne Hospital over 2 years.

This study is an opportunity to establish ableX as part of best practice with an internationally recognised clinical group:

  • December 2016: Platform initial implementation and supply/testing of equipment.
  • February 2017: Initial patients active on platform.
  • May-July 2017 and ongoing: Establish patient workflows, user instructions, respond to user feedback, establish technical support.
  • September 2017: First fully active cohort filled (8 week programme).
  • November 2017: Completion of first full cohort.
  • Until December 2018 (est.): Ongoing rotation of active study participants, cohorts of up to 10.
  • July 2019 (est.): Dissemination/publication of results.

Perron Institute rollout timeline

ableX has signed a commercial collaboration agreement with Perron to pilot and launch a subscription-based rehabilitation service to 420 stroke and multiple sclerosis patients in the first 18 months, across greater Perth.

A specific objective of the collaborators is to qualify the service for national health services funding in 2018, and this outcome is to be promoted by an independent health policy expert as part of the programme.

  • October 2016: Phase 1 supply and evaluation of standalone ableX systems in initial pilot of 6 patients – completed.
  • February 2017: Phase 2 grant application to LotteryWest sponsored by MSWA and Perron Institute.
  • July 2017: Grant approved.
  • October/November 2017: Phase 2 roll out of platform access, training and prescription to 20 pilot MSWA patients. 12 week intervention.
  • April 2018: Phase 2 completion and independent reviewer report due.
  • Apr 2018 – Mar 2019 (est.): Phase 3: expansion of pilot on commercial revenue model to 33 further MSWA patients each month for 12 months (400 patients total).
  • Mid-2018 (est.): Confirmation of eligibility for public health funding (NDIS targeted).
  • June 2019: Phase 3 pilot completion, services continue on commercial model.
  • June-Sept 2019: Independent review.

Key performance indicators







AU clinics






NZ clinics






US clinics






Active clinics/health services (total)*






Active clinical patients






Av. clinical period (mo.)






Active individual subscribers






Av. subscription period (mo.)






* Cumulative as at end of year.

Intellectual Property

There are 5 elements to ableX’s IP strategy. The combination of IP elements as a whole supports key business objectives.

Patents: ableX has four families of device patents. Two are in market (armskate and handlebar) and two are yet to be commercialised. These have broad claims in several key markets: New Zealand, Australia, United States, Europe, and China.

The patents and the related devices are licensed from Callaghan Innovation under a worldwide and exclusive royalty agreement. The royalty is 3% on all device sales subject to an annual minimum, against which ableX may offset contracted R&D (if any). Callaghan and ableX also share equally the cost of IP registration and protection. The licence terminates upon insolvency. ableX has a right to buy these patents at an independently appraised market value.

Copyright: The devices alone are ineffective without our therapy game software and platform, which is computer source code owned by ableX, protected by copyright and served behind a paywall and the cloud delivery mechanism. Equally the software is ineffective as rehabilitation without incorporating the devices. We also sell an older version of the games as an installed application, licensed for use on a single computer.

Trade secrets: We have built up repeatable knowhow (trade secrets) in several methods and techniques which underpin key characteristics of the ableX solution, such as the system’s efficacy, versatility, range of application, ease of use, engagement, and utility to clinical teams. These trade secrets are engineered into the solution components.

We accrue new knowhow through ongoing operations which will enable us to grow the ableX solution and its value proposition for some years to come. Necessary but limited disclosure occurs as a result of training and use of the system, which we protect through the use of user licences, confidentiality agreements and adherence to prepared training materials. The progressive transition of all customers onto the cloud platform and e-learning will provide additional protection behind a paywall.

Data and platform: The platform collects, analyses and acts on a volume of user data. As the data set grows it will offer detailed analysis of patient recoveries, health service and workforce performance and epidemiological trends. Data insights will also generate new know how in the form of methodologies, training programs, and user behaviours that we will use to enhance the solution for our customer groups. The growth of a community of users on the platform could cause a network effect that will perpetuate a market leadership position.

Brand: In 2017 the company adopted the name of its core product, the ableX, following a series of customers recommending us to clinical colleagues as “the ableX company”. Presenting a single brand to represent a single integrated solution, the uniqueness of that solution, and the brand recognition given by clinical recommendations binds together the total IP package and adds momentum to our strategy.

Exit strategy

The preferred medium or long term exit for shareholders will likely be in the form of a trade sale. Potential buyers are:

  • Health services providers for whom ableX offers improved service quality and a new revenue stream (such as BUPA).
  • Equipment suppliers to the health sector (such as Philips Healthcare or Medtronics).
  • Device or tele-rehabilitation competitor (such as Saebo).
  • Health insurers or health maintenance organisations (such as Kaiser Permanente).
  • IT companies looking to establish or build their homecare or digital health range (such as Microsoft or Samsung).
  • New aggregator of digital health technologies and apps, as yet unknown.

The point of interest will come when the ableX solution is accepted for reimbursement and can demonstrate stable repeatable deployment into existing patient populations. In the last 3 years, five stroke tele-rehabilitation players have raised seed and early stage capital of at least US$135m from US and European investors. The only known comparable exit so far is in the rehabilitation robotics field. InMotion Technologies was acquired by Bionik Laboratories (June 2016) for US$23m on estimated revenue of US$2m. A multiple of 10x revenue at breakeven is consistent with medical device transactions in other fields.

Dividend Policy

The ableX board intends to declare a dividend from after-tax profit subject to the requirements of the company’s business plan to deliver growth. The current forecasts anticipate a positive trading result for the 2020 financial year. The board will review its options regarding dividend policy options on a periodic basis.

Risks and Mitigations

Market Risks: Securing reimbursement or repeatable funding (whether public or private) for patients’ use of ableX is a critical milestone to enable the business to achieve scale with healthcare providers. ACC in NZ has agreed to fund ableX for its stroke patients. There is a risk that other healthcare funders and providers decline to pay for ableX as part of usual care for target patients, and it is therefore integral to the company’s strategy that we create a sufficiently compelling value proposition that fits acceptable criteria. ableX is not aware of any general funding category for tele-rehabilitation at present. The healthcare sector has clinical, regulatory and funding barriers which slow the adoption of innovation compared to other industries. Our mitigation against all these health market risks is to work with influential healthcare providers and best practice clinical leaders, targeting a best fit with clinical priorities and reimbursement criteria.

Customer Conversion Risk: A key part of the business case is the conversion of clinical patients into privately paying longer term customers. This is dependent in the first instance on a level of patient flow from the clinical sites, and is likely to be encouraged by the progressive release of further game and platform improvements to drive product usage. Our mitigation will be to encourage a community to grow by offering incentives to past ableX private customers to become platform subscribers, low level relationship building with community-based informal stroke networks, and by continiously developing the ableX solution to have increasing utility for a wider group of neurological patients.

Clinical Efficacy Risks: To date efficacy data for ableX has been strong. However, there’s a risk that future research data will undermine the efficacy evidence published to date, although we have no specific concern in this respect currently. Efficacy data is a function of good implementation, patient coaching, appropriate prescription, access, patient usage and support. It may also be affected by the degree of patients’ impairments. ableX has little or no influence over these factors in day-to-day practice. We mitigate this risk by providing training and support, including increasingly an online training programme promoting an ableX “method” and by collecting feedback from clinical users.

People Risks: Key know-how, operational and management responsibility rests on certain individuals. Key amongst these are the CEO and the CTO. The company has taken out key man insurance for the CEO. Platform architecture, clinical expertise and other know how is progressively shared amongst the entire team, and we have prioritised post-raise to document all IT systems and clinical processes in order to mitigate the risk of losing key people (and their knowledge).We may not have enough people in the business plan to adequately support the implementations we have anticipated, at the time that support capability is needed.

IP Risks: The company has taken steps to protect its IP as described above. Before rollout to third parties, we will also implement a contractual limited use licence for all end users. Despite these measures, there remains a risk that a third party could copy or imitate ableX’s games, devices and/or other IP, and we therefore carefully monitor the competitive landscape and take care to limit disclosure. If a breach of our IP rights is discovered, the company’s limited resources may constrain its ability to enforce its rights against a third party.

Inventory Risks: We have inventory in stock and detailed plans to meet forecast demand for the armskate and handlebar devices. If stock is lost through theft or accident, our manufacturing plans fail or cost more than budgeted, or if demand for inventory is higher or sooner than forecast then there may be delays in supply to end users. To help prevent this, there is careful monitoring of inventory, costs and timescales by the operations manager and CEO.

Development Risks: We have a backlog of known improvements to the existing devices, platform and therapy game portfolio which are yet to be pursued. Two third party devices have been identified with the potential to be adapted to extend ableX into lower limb rehabilitation. There are two further devices that are patented and developed to a validated pre-manufacturing stage. There is a risk that capital will not be sufficient to complete all R&D opportunities. This is mitigated by only pursuing design changes that are permissible within proposed budget, and carefully balancing allocation of developer time between operational priorities and strategic backlog.

Competitive risks: ableX is competing with rivals of varying sizes and capabilities in an emerging tele-rehabilitation market segment. The pace of technological advancement in the field is rapid. It is possible that one or more of these or a new player could develop technology and a market position with which ableX cannot effectively compete.

Regulatory Risks: The handlebar and armskate are registered as Class I medical devices in Europe, Australia and NZ. The handlebar is cleared by the FDA for sale in the USA. The armskate has not yet been submitted for FDA clearance. The software is positioned for regulators as augmenting the underlying efficacy of the devices, rather than being independent of the devices. The company follows ongoing compliance and record-keeping procedures using a compliance management plan that is appropriate for the stage and resources of the company. Following closing of the current offer we have budgeted for a domain expert to refresh and manage all regulatory compliance matters and processes, including patient data standards.There is a risk that the processes we implement now or in the future are found not to meet the relevant standard in a key jurisdiction, or that achieving compliance costs more or takes longer than anticipated.

Profit & loss summary

31 March ($)













Standalone sales







Hospital/clinic solution sales







Personal subscriptions







Development upsales







Total Sales







Less Cost of Sales







Gross Profit














Total Other Income







Net Revenue







Total Expenses














Cashflow summary







Cashflow from operations













Net cashflow from financing






Internal capital investment












Opening Bank Balance






Closing Bank Balance






Summary balance sheet




Cash & cash equivalents



Im-Able Limited (UK)






Payment in Advance



Rental Bond






Trade and other receivables



Total Current Assets




Fixed Assets as per Schedule



Loan (Share Scheme)



Im-Able Limited UK Shares



Patent Costs



Research & Development



Total Non-Current Assets







Trade and other payables



Shareholders' Current Accounts



Total Current Liabilities










Share Capital (paid up)



Share Capital (Share Scheme)



Retained Earnings






Balance sheet notes:

  • Stock is owned outright and held at cost.
  • Taxation includes losses available to carry forward $2,142,902 (FY16: $1,828,980).
  • Patent costs are amortised over 20 years.
  • Loan (share scheme) was provided as part of an employee equity incentive scheme (see Disclosures for more information).

Revenue assumptions

1. Revenue forecast is built from:

a. projected revenue from current contracted Melbourne and Perth relationships,

b. projected revenue from a series of 24 new health services clients through to FY22,

c. individual subscribers paying privately from early 2018,

d. modest (~50 units p.a.) continuing flow of standalone unit sales.

2. The underlying pricing model is that each user will be funded or will self-fund to buy one or more ableX device and a monthly subscription. Forecast revenue is therefore a function of:

patients x (device revenue + (subscription revenue x treatment period))

3. The main dynamics driving the number of patients are the number and scale of client healthcare providers using ableX, and the conversion rate of patients continuing private subscriptions after discharge.

4. The business model developed with Perron includes a conversion rate of 25% of patients who will continue beyond the initial 3-month intervention on a private ableX subscription. 90 days is the current standard period of publicly funded outpatient rehabilitation. The nature of neurological disability means that most addressable patients will likely benefit from much longer use. Hence a key target of the Perron project is to attract a public health or insurance subsidy.

5. Subsequent health services clients are modelled using a template based on the Perron plan, as a proxy for the patient flow at a moderately large Australian hospital. In forecasting each site we have scaled the template to reflect the different patient flows of our existing customers, and our knowledge of the market.

6. Pricing in the template uses the same pricing assumptions agreed with Perron and Royal Melbourne Hospital.

7. We assume 27 clinical sites of different template sizes coming on stream over 54 months. We have not assumed any very large clients, such as a national residential care provider or a central city teaching hospital. Each site assumes we provide a 3-month funded intervention for each ableX user and then a 25% conversion rate onto privately funded use.

8. All new customers will be encouraged onto the cloud platform from 2018, however we anticipate a limited need for standalone unit sales where cloud deployment is not suitable (eg. institutional barriers, network constraints or a lack of suitable funding criteria for Saas). The relevance of standalone sales will diminish through the forecast period.

9. Certain R&D projects should attract grant funding from Callaghan Innovation or equivalent agencies. Historically the company has been successful in obtaining grant funding for 40-50% of project costs from Callaghan Innovation, and we anticipate ongoing access to this level of support.

Cost assumptions

1. We have budgeted using current actual costs and projected forward, making provision for new hires, additional marketing, modest premises, travel, compliance costs and manufacturing. Over 5+ years since raising seed capital we have shown an ability to conserve funds and extend operations beyond budgeted timeframes.

2. Costs assume that planned staff levels and remote technologies are adequate to implement, train and support one new clinical client (and its patient flow) at a time before shifting attention to the next new client.

3. Salary levels are based on current staff costs plus contractual and inflation-related increases. Salaries for new hires assume current market rates.

4. Directors are paid $12,000 each per annum. We have budgeted for an additional independent director to join the board during the forecast period.

Sensitivity of forecasts

1. A key accelerator of clinical uptake and corresponding revenue will be qualifying the ableX service for public health or insurance reimbursement. Perron and MSWA (a leading provider of care services in Western Australia) have committed financial, operational and reputational capital to achieving this goal, in a funding environment which changed in 2016 to incentivise competition and patient choice (National Disability Insurance Scheme). If reimbursement is delayed or unavailable then revenue growth may be delayed, and the company may need to shift its selling proposition to attract more self-funding patients.

2. We haven’t modelled for churn or retention costs amongst long term users, because the subscription model is new. The key goal for the growth model at this stage is to establish the customer acquisition and conversion dynamic by acquiring hospital patient flows, and we have modelled that 75% of these patients will not subscribe beyond their publicly funded care. Many private ableX users do use their system regularly even after several years: retention of these users will be encouraged with the release of budgeted new platform content and features, and device improvements. With our forecast based on an active userbase of 0.8% of the prevalent stroke population in AU and NZ by FY22, there is also room in the market for a new patient to replace each one that stops.

3. No account is made in the model for revenue available by addressing dementia and other neurological conditions beyond stroke. We have good early efficacy but have not tested price or the healthcare model for these diseases yet. The diagnosed dementia population is as large as the stroke population.

4. Although we anticipate a few trial US sites starting in FY21 and FY22, in the forecast period we have not budgeted for rapid entry into very large overseas markets. Once ableX has established a base of clinical clients in Australasia we will be in a stronger position to pursue such opportunities.

5. We expect the release of new R&D to give a revenue uplift per site of up to 17% above the underlying template. Modest enhancements to the device portfolio and games will make our solution more effective in addressing lower limb mobility (the current focus of inpatient therapy) and grasp/release. The resulting increase in the number of addressable patients and duration of use should have a compounding benefit for user numbers, ARPU and retention.

6. Headcount is NZ-based and budgeted to a bare minimum. If funding were to allow, establishing a low cost Australian physical presence and investing more in client support would reduce execution and revenue risk and increase market momentum from FY20.

Further funding

Current round: The forecast assumes the full raise of $1.2m is completed. Closing on a smaller raise will require the company to focus its activities exclusively on the minimum spend needed to achieve the execution milestones at the Perth and Melbourne sites. Success in these reference sites maximises the likelihood of reimbursement and reduces the perception of risk for migrating existing health services clients onto the cloud platform and onboarding new clients. With a smaller raise the rollout and revenue from new sites will be delayed, and the company would return to investors during FY19 to seek the remainder of the capital needed to execute the business plan.

Future funding: Future rounds may be undertaken depending on the amount raised in the current round and the investment case for further or faster growth in Australasia. The board also considers that several overseas markets (such as USA, China and UK) have significant growth potential and ableX may wish to seek additional capital at an appropriate time in order to accelerate entry into those markets. With further progress, we may seek investment from strategic partners with the ability to accelerate international growth. On the basis the company is performing well against its targets, we will also consider debt funding in the future to potentially reduce the need for dilutive equity capital.

Supporting documents

Offer details

  • Company valuation

    Valuation of the company before funds are invested

    $6,000,000 NZD
  • Minimum target

    Amount required for the offer to be deemed successful

    $600,000 NZD
  • Maximum target

    The maximum amount the company is looking to raise

    $1,200,000 NZD
  • Minimum equity offered

    Percentage of the company offered at the minimum target

    9.10 %
  • Maximum equity offered

    Percentage of the company offered at the maximum target

    16.70 %
  • Share price

    The cost of each share

    $1.46 NZD
  • Minimum investment

    The minimum investment amount for this offer

    $1,000.10 NZD
  • Type of share offered

    See the Subscription Agreement for details

    Preferred Shares
  • Offer period

    The company may have rights to shorten or extend this period

    30 days
  • Offer end date

    The company may have rights to shorten or extend this end date

    Fri, 24 November 2017 9:00am

Types of shares on offer

Existing Share Types and New Shares

Following adoption of the proposed new constitution by ableX shareholders, the capital of ableX will comprise two types of economic shares, preferred shares and ordinary shares. The shares to be issued under this Offer will be preferred shares, which will have the same economic rights as the existing preferred shares. The preferred shares have two types of preference over ordinary shares:

• anti-dilution protection; and
• a liquidation preference.

The anti-dilution protection applies if any shares (or securities which can convert to shares) are issued in the future at an effective price less than the relevant preferred shares. In that circumstance additional shares will be issued to each holder of preferred shares for nominal consideration, so that the effective price of the preferred shares is reduced to the lower price of the new issue.

The liquidation preference applies if the company is liquidated or a ‘substantial sale’ occurs (being either a sale of the majority of the company’s assets or of a controlling share stake). In that circumstance, all holders of preferred shares will receive the effective price they paid for their shares (or a proportionate amount if there is a shortfall) before any distribution to ordinary shareholders. Ordinary shareholders will then receive $1.20 per share as second priority (being the lowest preference amount payable on any preferred shares). Any balance will then be distributed to all shareholders, pro rata to the number of shares held.

The liquidation preference ceases to apply if the proceeds of the liquidation or sale are sufficient to return the effective price paid per preferred share (or more) to all shareholders sharing equally. The application of the anti-dilution protection or liquidation preference can each be waived for a particular transaction or application by the holders of 66% of the preferred shares.

Voting and Non-Voting Preferred Shares

Two types of preferred shares will be issued in this offer:
• voting preferred shares for investments of $75,000 or more;
• non-voting preferred shares for investments less than $75,000.

The reason for offering non-voting shares for smaller investments is to prevent the company becoming a Code Company for the purposes of the Takeovers Code (which is triggered if the company has more than 50 voting shareholders and share parcels). Becoming a Code Company will place a potential compliance burden and costs on the company in respect of transfers and issues of shares in the future. The board has determined that this is not in the best interests of the company due to its current size.

The non-voting preferred shares will have the same economic rights as the other preferred shares and the same rights which are not of a voting nature (such as pre-emptive rights and tag along rights), but will not have the right to vote on any resolution of ableX, other than a proposal or resolution which affects the rights attaching to preferred shares (including any resolution to waive preference rights as described above).

The non-voting shares will automatically convert to voting shares upon any initial public offering (share market listing) of the company, or at the discretion of the board if such conversion can occur without the company becoming a Code Company.

Existing shareholders who subscribe in the Offer will be issued voting preferred shares regardless of their investment amount on the basis that they already hold voting shares and their subscription will not create a new share parcel for the purposes of the Code Company definition.

Existing shareholder rights in the Offer

If the Offer is oversubscribed shares will be allocated to existing shareholders as first priority before new investors (to comply with pre-emptive rights provisions in the Company’s constitution). Applications from new investors may be scaled or declined at the sole discretion of the directors.

Restrictions on Share Transfers

Certain restrictions apply on share transfers including pre-emptive rights. Please refer to the New Constitution for further detail.

Constitution and Condition

The rights attaching to the Shares, including the preference rights described above, are set out in the company’s New Constitution, which was adopted at the Company’s AGM on 18 September 2017. A copy of this document is available for review and you should read it before subscribing for shares in this Offer.


The pre-money valuation of $6m represents a 36% uplift against the previous post-money valuation of $4.4m. This reflects the strategic and partner value of the confirmed Melbourne and Perth clients for the ableX cloud platform, and the platform itself being open for business. The previous price of $1.20 per share was first paid in December 2013 and most recently paid in October 2016.

The directors have reviewed New Zealand investment data published by NZVIF for 2016 and prior years relating to startup and seed stage companies in the healthcare and medical devices sectors. The pre-money valuation is in the upper half of the comparable peer group, and the uplift since the last investment round is in the lower half of the comparable peer group.

The directors also had regard to the $8m pre-money valuation for Veriphi, the most directly comparable medical device technology to raise capital on SBE (in 2016), at an earlier stage in its path to market.

There is little directly comparable transaction data. In 2016 InMotion Technologies, a manufacturer of an upper limb rehabilitation robot developed at Massachussetts Institute of Technology, was acquired by Bionik Laboratories for an US$23m in new shares, on unverified revenue of US$2m. Transaction data in other segments suggest single product medical device businesses with reimbursement are acquired at 8x-10x revenue at breakeven. This would indicate an implied EV for ableX at 3 years post-investment of between $26m and $36m (FY21).

At post-money EV of $7.2m:















Shareholdings pre-closing and post-closing



Min. close

Max. close

Mede Family Trust (Founder)




E Kernohan




CureKids Ventures




NZ Venture Investment Fund




GLT Trust (Co-founder)




J Kernohan




Okareka Investments (Chair)




Existing shareholders < 5%




New shares








Note: No account is taken in this table for existing shareholders taking up new shares as part of the offer.

Previous investment



Amount raised

December 2009 - February 11



August 2011



December 2013



September 2014

Follow on


September 2015

Follow on


September 2016

Follow on




Cornerstone shareholders are CureKids Ventures and NZ Venture Investment Fund.



There are no shareholder loans and no debt other than current accounts payable.


Elliott Kernohan is paid an annual salary of $150,000 as CEO. All other employees are paid at standard market rates. Directors are paid $12,000 each per annum.

Employee equity incentives

The company’s constitution authorises equity incentives for up to 20% of the fully diluted capital of the company. The company has awarded the following equity incentives:




Issue date

Expiry date

Incentive type

Sunil Vather



25 Sept 2015

31 March 2020


Geoff Todd



25 Sept 2015

31 March 2020


Rajendra Jadeja



25 Sept 2015

31 March 2020


Elliott Kernohan



25 Sept 2015

31 March 2020


Elliott Kernohan



31 March 2017

31 March 2022


Elliott Kernohan



31 March 2017


Share subscription

Standard option rules apply to the issue and exercise of options. The CEO’s share subscription in March 2017 followed the completion of performance conditions during the period 6 December 2013 to 31 December 2016. This was funded by a loan from the company on terms which give recourse to the shares.

As at 31 July 2017 a further 249,426 shares or 5.3% of the fully diluted share capital remained unallocated under the equity incentives cap. Following closing the directors will consider a limited number of further equity-based incentives to retain and attract staff.

Related Party Transactions

  • Titanium Solutions (owned by our Chairman and shareholder, Paul Weatherly) periodically procures electronic components for ableX, which it supplies at cost.
  • Shareholder and CTO Carey Stevens provides ongoing technology development services to ableX which are supplied at an arms length contract rate through his company, Prodroids Ltd.
  • Shareholder Robyn Wickenden provides accounting services to ableX at an arm’s length contract rate.


The ableX healthcare board meets at least 10 times per year. The composition of the Board is:

  • Paul Weatherly (Chairman)
  • Kate Reid (independent non-executive director) - will join the Board upon closing of the funding round.
  • Maxine Simmons (non-executive director)
  • Sunil Vather (Founder)

Shareholder Communication

We intend to keep investors updated through:

  1. A quarterly business summary update (more frequently if circumstances warrant).
  2. An annual update of the outlook of ableX, including financial statements and commentary approved by the board.
  3. Participation in an Annual Shareholders Meeting.

Professional Services

  • Accounting: Robyn Wickenden BMS CA
  • Legal: Andrew Lewis Law
  • Media: Joyce & Howse
  • Intellectual Property: Potter IP and AJ Park
  • Banking: ANZ
  • Share registry: Snowball Effect

Snowball Effect Fees

Snowball Effect charges an initial fee of $5,000 and a fee if a company successfully reaches its funding target. The latter fee is the larger of $25,000 or 7.5% of funds raised. Snowball Effect may amend this fee in discussions with the company before an offer is listed on Snowball Effect.

International investors

The distribution of this offer outside of New Zealand may be restricted by law. This is not intended to, and does not, constitute an offer of securities in any place which, or to any person to whom, the making of such offer would not be lawful under the laws of any jurisdiction outside New Zealand. This includes, but is not in any way limited to, Australia and the United States. It is the responsibility of any Snowball Investor to ensure compliance with all laws of any country outside New Zealand relevant to their subscription, and any such Snowball Investor should consult their professional advisers as to whether any governmental or other consents are required, or other formalities need to be observed to enable them to apply for securities pursuant to each offer. The failure to comply with any applicable restrictions may constitute a violation of securities law in those jurisdictions. The securities in each offer have not been and will not be registered under the US Securities Act or the securities laws of any state of the United States.

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Warning statement

It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.

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