lattice - may 2016 · 2016. 5. 18. · siddharth rajeev, b.tech, mba, cfa analyst may 10, 2016 2016...

Siddharth Rajeev, B.Tech, MBA, CFA Analyst

May 10, 2016

2016 Fundamental Research Corp. “10+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com

PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT

Lattice Biologics Ltd. (TSXV: LBL / OTCBB: BLVKF): - Emerging Player in Regenerative Medicine -

Initiating Coverage

Sector/Industry: Biotechnology www.latticebiologics.com

Market Data (as of May 10, 2016)

Current Price C$0.25

Fair Value C$1.00

Rating* BUY

Risk* 4 (Speculative)

52 Week Range N/A

Shares O/S 58,637,346

Market Cap C$14.66 mm

Current Yield N/A

P/E (forward) N/A

P/B N/A

YoY Return N/A

YoY TSXV -4.9% *See back of report for rating and risk definitions

*All the figures are in US$ unless otherwise specified.

Investment Highlights

� Lattice Biologics Ltd. (“Lattice”, “company”), based out of Scottsdale, Arizona, is an emerging player in the field of natural and regenerative tissue engineering for bone, skin, and cartilage, as well as novel products related to cancer diagnostics.

� Lattice’s predecessor company was formed in 2007. The current management team, headed by CEO Guy Cook, acquired the predecessor company in 2013 (which was generating $5 - $6 million in revenues), recognizing strong potential in the space to grow organically and through product innovations. The new management team has since then made significant changes to the company’s product mix.

� The company went public through a reverse takeover in late 2015. � Current management has invested $2.4 million in the company to date. � Lattice recently developed a patent-pending technology that has the potential to

significantly improve the surgical outcomes for allograft (transplant) recipients and drastically improve post-surgical healing and reduce recovery time. The company is currently conducting clinical studies across multiple indications. Three new products, using the new technology, are expected to be launched in the coming quarters.

� On March 30, 2016, Lattice announced it has entered into an agreement with Sunnybrook Research Institute ("SRI") in Toronto, Ontario, to develop products related to precision cancer diagnostics and the efficacy of anti-cancer agents.

� We are initiating coverage on the company with a BUY rating and a fair value estimate of $1.00 per share.

Risks

� The company’s ability to innovate and develop new products will play a vital role in its long-term success.

� Lattice is a relatively new company and does not have a track record of profitability.

� Lattice’s lead products are relatively new and have a short track record of sales. � There is no guarantee that the upcoming products will receive U.S. Food and

Drug Administration (“FDA”) approval. � The newly developed technology has yet to be commercially adopted. � Negative publicity concerning methods of human tissue recovery may reduce

demand for allografts.

Key Financial Data Dec-31 Sep-30 Dec-31 Sep-30 Sep-30

(in US$); YE - Sept 30 2014 (12M) 2015 (9M) Q1-2016 2016E (12M) 2017E (12M)

Revenues 6,113,792 3,017,516 1,065,654 5,704,716 9,240,943

Gross Margin 22.5% 21.0% 29.2% 30.0% 34.9%

EBITDA (823,829) (1,626,466) (646,154) (2,416,289) (1,293,579)

Net Income (1,498,630) (3,190,511) (3,743,167) (5,174,831) (199,853)

Total Debt 4,579,901 6,915,013 6,678,682 5,419,483 5,419,483

Assets 6,964,201 6,002,810 5,566,857 5,567,297 7,479,958



Regenerative

Medicine

Allografts

Regenerative medicine is an emerging field of medical science associated with replacing, engineering, and regenerating human cells, tissues, and organs affected due to injury, disease or due to the natural aging process. The immense potential of such medicines / treatments to repair and regenerate affected tissues and organs, which were previously considered irreparable, makes this field one of the most promising fields of medical science. According to Allied Market Research, the global regenerative medicine market is

estimated to hit $67.6 billion by 2020, reflecting a compound annual growth rate (CAGR) of 23.2% from $16.4 billion in 2013. North America is expected to account for $33.5 billion by 2020. The regenerative medicine market is primarily driven by technological advancements in stem cell therapy and tissue engineering therapy. Stem cells are undifferentiated cells that can take the form of specialized cells / differentiated cells (such as skin, blood, muscles, nerves, and others). Stem cells are regenerative, meaning they have the ability to multiply themselves to produce more stem cells, which can eventually become differentiated cells. The following chart shows the expected growth in the global tissue engineering and cell therapy market.

Source: Mediligence

Technological advancement, along with increasing geriatric populations, increasing incidences of chronic diseases and trauma injuries, and government funding, are expected to drive the market over the next decade. Grafting refers to the procedure of moving tissues and cells from one site to another on the same body, or to another person, typically done at surgical reconstruction procedures to replace damaged skin, bone, blood vessels, neurons, ligament, fat, and cornea.

Autograft is the process of transplanting cells and tissues from one site to another



within the same individual, while allograft involves the transplantation of tissues and

cells from one individual to another of the same species. Allograft is typically used when there is an insufficient amount of autograft on the patient’s own body. Also, there is no need for a second operative site on the patient’s body to recover an autograft. A second operative site exposes the patient to potential for complications, such as infection, pain, scarring, loss of function, and longer aftercare. Allograft has been experiencing growing demand, as it

reduces surgical time, postoperative discomfort, and enhances faster healing. Another factor that has been driving the demand for allograft products is the ready availability of allografts in various shapes and sizes that can be processed in various forms such as chips and others as per requirement. Synthetic grafts are also used, but the downside to such grafts is that in certain cases, implantation may not be compatible and prompt a foreign body reaction, which can lead to the grafts being rejected by the patient’s body. There are also potential for injuries from the erosion of synthetic products in the patient’s body. Synthetic grafts tend to be cheaper than allografts. Allograft tissues are typically obtained from tissue banks, who primarily receive donated tissues from deceased people. Such tissues are referred to as cadaver tissues. Various sources indicate that allografts have been used successfully in various medical procedures for over 150 years. Tissue banks, accredited by the American Association of

Tissue Banks (“AATB”) and regulated by the U.S. Food and Drug Administration

(“FDA”), are estimated to distribute approximately 1.5 million bone and tissue

allografts every year in the U.S. According to Transparency Market Research, the global bone grafts and substitutes market was valued at $2.36 billion in 2014. The market is estimated to grow at a CAGR of 4.5% from 2015 to 2023, to reach $3.48 billion in 2023. The allografts market alone is estimated to hit $1.15 billion by 2023, reflecting a CAGR of 3.9% from 2015 to 2023. It is estimated

that approximately a third of all bone graft procedures in the U.S. use allografts.

• Allografts are classified as Demineralized Bone Matrix and other allografts (freeze-dried bone and fresh frozen bone).



The following chart from GlobalData shows that the U.S. dominates the bone grafts and substitutes market. The chart also shows their strong growth projections.

The allograft products’ market is highly competitive and several multi-national

companies are active in the space. The table below shows a few of the key players in the global market. LifeCell Corporation, a privately held corporation owned by medical technology company, Kinetic Concepts, Inc., is a leading player.

Key Players Ticker Revenues ($, bn) Gross MarginEBITDA

MarginNet Margin

Debt to

Capital

LifeCell Corporation (US)

Organogenesis (US)

CR Bard Inc. (US) NYSE:BCR $3.61 62.6% 30.2% 3.2% 53.7%

Johnson & Johnson (US) NYSE: JNJ $70.18 69.4% 31.7% 21.9% 21.8%

Arthrex Inc. (US)

Smith & Nephew plc (U.K) NYSE: SNN $4.82 75.3% 25.6% 8.8% 27.2%

Integra Lifesciences Corporation (US) NasdaqGS:IART $0.99 65.4% 22.3% 0.0% 48.5%

Wright Medical (US) NasdaqGS:WMGI $0.70 75.0% -3.1% -57.3% 35.9%

Stryker Corporation (US) NYSE: SYK $10.06 67.1% 25.1% 16.1% 45.9%

Average (excl. outliers) 69.1% 27.0% 10.0% 38.8% Source: FRC and S&P Capital IQ



Lattice’s

Background

Lattice Biologics’ predecessor company was formed in 2007 in Scottsdale, Arizona,

U.S. as International Biologics (“IB”). In the fall of 2013, Guy Cook (the current CEO of Lattice) acquired IB through a newly formed company, Lattice Biologics Inc. Mr. Cook has a solid track record in the space. He founded and led Bacterin International Inc. (AMEX: BONE) from a small contract R&D start-up to a publicly traded multinational organization with sales in over 15 countries and more than 150 employees. Under his tenure, Bacterin’s revenues grew from $7.8 million in 2009 to $30.1 million by 2012. IB originally operated as a tissue bank focused on the manufacture and development of allograft products for the spine, orthopedic, trauma, dental industries, and others.

Source: Company

IB was acquired for $2.40 million, and the assumption of $3.80 million in liabilities and obligations of IB, the payment of $15,000 per month to a principal of IB from October 2013 to October 2016, and the issuance of 200 common shares of Lattice Biologics Inc. (which eventually translated into 430,533 shares of Lattice Biologics Ltd) to a principal of IB. The total acquisition price is estimated to have been $6.20 million. Although details of the historical financial performance of IB were not disclosed, management indicated to us that IB’s annual revenues were in the $5 - $6 million range.

In late December 2015, the company went public through a reverse takeover of a

TSXV listed company Blackstone Ventures Inc. Subsequent to the acquisition of IB, management made significant changes to the company’s product mix, capitalization, and senior management team. In addition to developing and marketing its legacy products, Lattice is now an emerging player in the field of natural and regenerative tissue engineering for bone, skin, and cartilage, that has the potential to enhance patients’ surgical outcomes.



Legacy

Products

Source: Company

Lattice’s legacy allograft products (200+) primarily target the following applications:

• Enhancing fusion in spine surgery

• Enhancing breast reconstruction post mastectomy for breast cancer patients

• Sports medicine indications, including ACL (Anterior Cruciate Ligament) repair

• Promotion of bone regeneration in foot and ankle surgery

• Promotion of skull healing following neurosurgery

• Enhancing wound repair in burn victims

• Subchondral bone defect repair in knee and other joint surgeries

The company procures its donor tissues from federally licensed Organ Procurement Organizations (OPOs) and other AATB accredited donor sources. The following are a few examples of its products.

Anterior Lumbar Interbody Fusion

Source: Femur USED FOR Spinal reconstructions and applications

H-Genin Crush Mix

Source: Cortical and cancellous bone Common Applications: Spinal fusions, podiatric reconstructions, oral/maxillofacial reconstructions, and general orthopaedic reconstructions



Achilles Tendon

Source: Achilles and calcaneus

Common Applications: Reconstruction of rotator cuffs, knee ligaments, and Achilles tendon repair

Bicortical Dowel

Source: Ilium Common Applications: Spinal fusions and general orthopaedic reconstructions

AdMatrix

Source: Skin

Common Applications: Breast Reconstructions, Wound Care, Hernia Repair and Oral/Maxillofacial Reconstructions

Bone Pin

Source: Long bones Common Applications: Oral/maxillofacial reconstructions

Source: Company

Product prices range from $100 to $10,000. Among the products that came with the

acquisition of IB in 2013, the Demineralized Bone product is currently the primary

revenue generator, accounting for 90% of Lattice’s revenues. This is 100% human cortical bone demineralized through a proprietary process to make the graft flexible while maintaining quality of the allograft. It has various applications in orthopedic, neurological, trauma, oral/maxillofacial and reconstructive procedures. According to management, the company has historically sold approximately $20,000 to $40,000 worth of products from each donor, and each donor costs an average of approximately $5,000. After production / processing costs, Lattice typically averages 30% - 60% margins for this product line. Management indicated that Lattice had been processing only 10 donors a month since



Lead

Products

March 2015, due to insufficient funds (the company has to pre-pay tissue recovery agencies), but management intends to increase production levels to 30 donors a month this year with sufficient working capital infusion. Since the IB acquisition, in order to improve margins (gross margins prior to the acquisition were ≈20%), the company decided to shift its focus to two products (with gross margins of 80%+), which are currently their lead products. Management expects these two products to be the company’s major revenue driver in the near-term. Acellular Dermal Matrix (ADM) scaffold, made from human dermal tissues, has been used as a soft tissue replacement since the 1990s. ADMs are created by a process that results in decellularization, which isolates the extracellular matrix (ECM) of a tissue from its inhabiting cells. ECM refers to the surrounding environment of cells. The process results in an ECM scaffold of the original tissue, which can be used in tissue regeneration. Within the scaffold, the patient’s own cells can repopulate and revascularize (improve blood circulation) the implanted tissues. Common applications of this product include breast reconstruction, post mastectomy, diabetic foot ulcers, chronic wounds, and burns. Lattice soft launched the product in March 2014. This product currently accounts for approximately 5% of Lattice’s revenues. Competition comes from multi-national firms such as:

� human-derived FlexHD® (Ethicon, subsidiary of Johnson & Johnson; NYSE: JNJ); � freeze-dried AlloDerm® (LifeCell), � Neoform™ (Mentor), � DermaMatrix™ (Synthes), � porcine-derived (animal) Permacol™ (Covidien), � porcine-derived (animal) Strattice® (LifeCell)

According to management, the company currently sells approximately $20,000 worth of products from each donor, and each donor costs an average of approximately $2,500. After production / processing costs, Lattice averages 60% - 85% margins for this product. Management estimates the market potential of this product at $550 million in the U.S. alone. Demineralized Bone Matrix (“DBM”) Putty – tissue grafting solution – is an osteoinductive product (the ability of graft materials to induce stem cells to differentiate into mature bone cells) used by surgeons as a bone void filler in the extremities and pelvis. It is an allograft bone that has had the calcium mineral partially removed, leaving behind the organic collagen matrix and inherent growth factors. As a result of the demineralization process, DBM is more biologically active than non-demineralized bone grafts, and as a result, has higher ability to recruit host cells to the site of the graft and modulate their



Facilities and

Employees

Sales

Channels

conversion into bone forming cells. Common applications include spinal fusions, podiatric reconstructions, oral / maxillofacial reconstructions, and orthopaedic reconstructions. The company had been selling this product since the acquisition of IB. In 2014, Lattice made a strategic decision to cease outsourcing the production of this product to improve margins. The company states that they were able to increase gross margins from less than 30% to 80% - 85%, by insourcing production. This product currently accounts for approximately 3% - 5% of Lattice’s revenues. The product has a list price of $100 per cc. Lattice’s most commonly sold product is the 10cc unit. Since insourcing production, Lattice has been able to generate approximately 25x 10cc units per donor, or $25,000 per donor. According to ResearchMoz, the orthobiology market, which is a branch of science that develops bone and tissue replacement materials for skeletal and tissue healing, is expected to grow from $3.75 billion in 2012 to $5.52 billion by 2019 in the U.S. DBM products

roughly account for 10% of the entire market, or approximately $400 - $500 million. Lattice’s 13,480 sq. ft. headquarters, laboratory and manufacturing facilities are located in Scottsdale, Arizona. The facility is registered with the FDA for screening, testing, storing, and distributing biological tissues. The company also has an office in Toronto, Ontario. All of the company’s 200+ products are manufactured in-house. In addition to the officers of the company, Lattice has 25 full-time employees, including two in product development, two in sales and marketing, six in administrative services, and 15 involved in processing and quality assurance roles. Lattice used to primarily rely on marketing its products through third-party distributors. However, the company has been recently shifting their sales strategy and primarily markets its products directly to physicians, surgeons and hospitals instead of using distributors / middlemen. According to management, a typical surgeon has the potential to purchase $2 - $3 million of products from Lattice every year. Therefore, Lattice believes direct selling is a more efficient strategy.

The company has assembled a Scientific Advisory Board (SAB) to support its sales. SAB consists of doctors (Key Opinion Leaders – KOLs) who assist Lattice in gaining hospital approvals as well as using and recommending the product to fellow colleagues. The company currently has 15 members who provide consulting services relating to training presentations regarding the use of Lattice’s products to medical professionals. There are laws in place in the U.S. that limits physician referrals, specifically the Stark Laws that prohibit physician referrals of designated health services for Medicare and Medicaid patients if the physician has a financial relationship with the entity that sells the referred products / services. According to Lattice, the arrangements with its member physicians are



Accreditations

and

Registrations

in compliance with all regulations.

Allograft procedures are extremely sensitive and one of the key risks is the potential for donor-to-recipient disease transmission. The United States Food and Drug Administration (FDA) have regulated this field very closely since 1993 to ensure safety. According to management, Lattice maintains high standards from donor acceptance to the final packaging and distribution of finished allografts to ensure patient safety. A few noteworthy points are listed below:

� A potential donor is thoroughly evaluated by both a recovery agency and Lattice.

Screening includes a medical and family history interview, a physical assessment,

communicable disease testing and an extensive review of all relevant medical records to

ensure suitability for processing and distribution of donated tissue.

� All donor recovery agencies engaged by Lattice comply with applicable local, state, and

federal laws, regulations, and standards.

� Screening procedures are performed in compliance with the AATB, the U.S. FDA, State

Licensing Agencies, the European Union, and Health Canada.

� All tissues are tracked from recovery through testing, processing, packaging, and

distribution

� Pre-processing and post-processing quality assurance and quality control reviews are

performed on all donated tissues.

� Tissues are processed in certified ISO Class 1000 and Class 100 clean rooms.

Lattice maintains registrations with the U.S. FDA, accreditations with the American Association of Tissue Banks (AATB), five U.S. state licensures, and registration in Canada. The company also has certificates from the U.S. FDA, which allow them to export their products to 29 countries. Currently, over 90% of the company’s sales are in the U.S., with the remainder coming from various countries listed below:



Next

generation

ECM based

allograft

technology

International Accreditations: U.S. and Canada Registrations and Accreditations:

1. Argentina Accredited by the American Association of T issue Banks

2. Australia Registered with the United States Food and Drug Administration

3. Austria Licensed by the State of Florida Agency for Health Care Administrat ion

4. Belgium Licensed by the State of New York Department of Health

5. Brazil Licensed by the State of California Department of Public Health

6. Canada Licensed by the State of Oregon Health Authority

7. Chile Licensed by the State of Maryland Department of Health and Mental Hygiene

8. Czech Republic Registered with Health Canada

9. Denmark

10. Germany

11. Greece

12. Iceland

13. Israel

14. Italy

15. Japan

16. Korea, Republic of

17. Mexico

18. Netherland

19. New Zealand

20. Norway

21. Poland

22. Portugal

23. Russian Federation

24. South Africa

25. Spain

26. Sweden

27. Switzerland

28. T urkey

29. United Kingdom Recognizing that the current modes of allograft transplantation do not actively promote regeneration, and depend solely on the quality of the patients’ own stem cells for healing, management believes that there is room for significant opportunity for product improvement in the marketplace. Management recognizes two primary drawbacks of traditional allograft products:

1. Reliance on undirected scaffolds that lack the ability to regenerate properly - such

scaffolds serve only as a temporary void filler and may not properly heal. They are

considered undirected as they do not make a distinction between patients’ cell types, and

therefore, do not engage the cells at the niche and provide direction for them to

regenerate.

2. Limited by the patient’s own stem cells’ ability to regenerate - stem cells play an

important role in tissue regeneration and wound healing, and therefore, the biological

aging of stem cells may affect a patient’s ability to heal.



Extracellular Matrix (“ECM”), as mentioned earlier in this report, refers to the surrounding environment of cells of tissues, which has both structural and functional roles. ECM is generally composed of collagen, proteins and growth factors. Not only does the ECM support cells’ orientation, it also provides the architectural structure and the environment necessary for tissue repair. Without a functional ECM, the ECM will no longer be able to support the normal cellular processes, and any repair will be stalled.

By creating a conducive and natural environment that mimics the functionality of damaged

tissues, Lattice’s next generation allograft technology, through the use of decellularized

human ECM (which, as mentioned earlier, is a biological scaffold / substrate for allografts)

has the potential to harness the potential of a patient's native cells to fully repair damaged

tissues. Lattice’s modified ECM is secreted by Human Mesenchymal Stem Cells (HMSC).

HMSCs possess strong potential to differentiate into any type of tissue. The ECM directs

HMSCs to differentiate and regenerate as the intended bone, skin, or cartilage cells. This

creates optimized growth conditions to promote propagation, vascularization, and

intentional differentiation for ideal healing.

Source: Company

Lattice believes their process, known as “Matrix Assisted Regeneration” or MAR, can

significantly improve the surgical outcomes for allograft recipients and drastically improve

post-surgical healing and reduce recovery time.

Lattice is currently conducting clinical studies across multiple indications adopting their

ECM technology.



Upcoming

Products

Lattice has the following provisional patents on its technology in the U.S.:

� Compositions of matter technology

� Pharmaceutical use of the technology

� Combination therapy of the technology

� Methods for manufacturing

A key advantage of Lattice’s ECM-based technology is that management believes that it may qualify for the U.S. FDA’s 510(k) Premarket Notification process. The 510(k) regulatory process is much faster, simpler and cheaper than the Premarket Approval (PMA) process which is the most stringent type of device marketing application required by FDA.

Entry into the diagnostics market: Another major market opportunity for this technology

is its potential for use in diagnostics by using a patients’ own cancer / tumor cells,

amplifying them within a human ECM, and utilizing proprietary viability markers to test the

efficacy of anti-cancer agents. This will help in identifying the most effective treatment

plans for individuals on a completely personalized basis. The concept here is that Lattice’s

ECM technology will be able to accurately recreate complex tumor microenvironments

because it allows them to grow biopsies from patients' own cancer tumors in the laboratory,

subject the tumors to multiple anti-cancer agents, and observe the resulting behaviors.

On March 30, 2016, the company announced it has entered into an agreement

with Sunnybrook Research Institute ("SRI") in Toronto, Ontario. As per the agreement, SRI will conduct a study to develop new research methods, including the creation of new instruments to make cellular measurements, and the validation of methods to determine resistance and drug sensitivity. If successful, we believe the study may lead to a major

breakthrough in the diagnostics space. The study will be conducted at SRI’s facilities in Toronto and is expected to be completed in two years. Lattice will contribute $100,000 per year in funds for the initiative. On April 18, 2016, the company announced its plan to launch three new products utilizing its patent pending MAR platform. All three products are expected to be launched in the coming quarters.

1. MarBrane is Lattice’s first amniotic tissue membrane product harvested from placental

tissue. Placental tissues are a good source of nutrients, proteins, carbohydrates that are

essential for growth and development. This biologic (genetically-engineered proteins

derived from human genes) is processed using the company’s MAR technology which

protects cells during the recovery process, allowing for greater cell viability. MarBrane has

been developed for use in a broad range of markets and applications, including: advanced

wound, plastic surgery, pain management, spinal, orthopedic, and ocular indications.

Placental tissue allograft is considered to be a safe, non-immunologic alternative to



Management

synthetic, cadaveric, and animal-derived regenerative products.

This product is expected to be launched in Q3-2016.

2. MarGraft is a new demineralized cortical fiber product which adopts the MAR process

to maximize the allografts’ osteoconductivity (physical property of the graft to serve as a

scaffold for viable bone healing) and osteoinductive (explained earlier) potential. MarGraft

can be molded into various sizes and shapes. Specialized shapes and sizes receive premium

pricing compared to traditional allograft tissues or DBM putty.


3. MarCell is a next generation bone allograft with viable cells, which combines multiple

proprietary technologies to produce a fully moldable viable cell allograft. Also processed

using the MAR technology, Marcell supplies the three physiologic components essential for

robust bone formation: osteoconductivity, osteoinductivity, and reliable number of cells

retained within the bone matrix.


The following chart shows the company’s product pipeline.

Source: Company

Items #1 to #3 in the table were discussed, and items #4 to #6 are contingent on FDA approvals.

Management of Lattice has invested $2.4 million in the company to date. Management and the board currently own 80% of the outstanding shares. The high equity ownership, we

believe, is a very encouraging sign as it indicates management’s strong conviction in

the company’s prospects, and aligns management and investors’ interests.

The following table shows the shares held by senior management and board members.



Common Shares

Guy Cook 29,262,553

Cheryl Farmer 8,374,959

Mario Stifano 1,312,648

Cathy Thomas 3,174,603

Donald McInnes 1,152,222

Total 43,276,985

% of Total Shares Outstanding 74%

Brief biographies of the management team, as provided by the company, follows:

Guy Cook, Chief Executive Officer

Mr. Cook brings more than 25 years of experience organizing, managing, and running all aspects of start-up and mid-size businesses. Prior to leading the asset purchase of International Biologics (renamed Lattice Biologics Inc.) in September of 2013, Guy founded and led Bacterin International Inc. (AMEX: BONE) from a small contract R&D start-up to a publicly traded multinational organization with sales in over 15 countries, multi-million dollar revenue, and more than 180 employees. Under his tenure, Bacterin

revenues increased from USD $7.8mm in 2009 to USD $15.4mm in 2010 and USD

$30.1mm in 2012, achieving record sales. Guy’s expertise includes over 18 years of experience in the tissue engineering field. He began his career as a confocal microscopist scientist, utilizing novel biomarkers at Montana State University’s Center for Biofilm Engineering, a National Science Foundation center of excellence.

Cheryl Farmer, Chief Financial Officer

Ms. Farmer joined Lattice in September of 2014 with 20 years of experience as a CFO and business development specialist. She started her career with Big 6 accounting firms and soon began generating valuable and far-reaching professional relationships across a diverse network of industries. Prior to joining Lattice, Cheryl served as a Global Business Executive for the Greater Phoenix Economic Council (GPEC), Arizona’s premier economic development organization for public entities and private investors. In this role, she was responsible for identifying and building strategic relationships throughout Western Canada with individual businesses, government agencies, economic development organizations, and foreign trade associations to support expansion into America with great success. Cheryl’s trademark entrepreneurial spirit, determination to improve advanced stem cell technology outcomes, and expertise in finance, system/process implementation, efficiency management, business development, and growth strategy are critical assets for Lattice’s continued growth.

Gregory Davis, Chief Operating Officer

Mr. Davis joined Lattice as it Executive Director in August of 2014. Greg is a dynamic, results-focused leader with over 25 years of experience in the tissue banking industry. Throughout his career, Greg has worked with several organ procurement organizations and has also led eye and tissue banks. His emphasis has been on operations management, strategic planning, and the development of highly effective work teams to maximize



Board of

Directors

productivity, while maintaining continuous quality improvement and regulatory compliance. Greg also brings extensive experience in developing operational budgets and cost containment initiatives.

The company’s board consists of five members (listed below), of which, three are

independent.

Guy Cook, CEO and Director

Cheryl Farmer, CFO and Director

Mario Stifano, Director

Mr. Stifano, CPA, is currently President and CEO of Cordoba Minerals Corp. (TSX Venture: CDB), a Toronto-based junior resource exploration company focused on the exploration and acquisition of copper and gold projects in Colombia. He joins the team as a key Board Member. Mario is a seasoned executive who brings strong capital markets experience and will be invaluable to the development and implementation of a successful mergers and acquisitions strategy. Throughout his career, he has raised approximately $700mm in equity and debt for technology and resource companies, including raising funds for start-ups and an IPO. Mario’s extensive mergers and acquisitions experience, including a $400 million acquisition while CFO of Lake Shore Gold (TSX: LSG), will greatly assist Lattice and the pursuit of its growth strategies.

Cathy Thomas, Director

Ms. Thomas, CPA, is the Founder of Paraclae, LLC, a thriving finance and accounting consulting firm that recently merged with Sensiba San Filippo, one of the largest Northern California based CPA and business consulting firms. Cathy offers over 30 years of experience in business accounting services, including 15 years with Deloitte and Touche, five of which as a partner. Her major career accomplishments address the critical areas of complex public offerings, global corporate auditing, and Sarbanes Oxley Compliance. Most significantly, the latter of which encompasses compliance program development and implementation to protect shareholders and the general public from accounting errors and fraudulent enterprise practices and to improve the accuracy of corporate disclosures. In 2002, she started the consulting arm of Armanino Mc Kenna, LLP, as a member of the firm’s executive committee. Providing outsourced internal audit services specifically to address Sarbanes Oxley Compliance, outsourced finance, and accounting resources, the firm tripled in size across six years driven by the increase in revenue from the consulting practice. In 2008, Cathy founded Paraclae and was profitable year one.

Donald McInnes, Director

Mr. McInnes comes to Lattice as a natural resources entrepreneur who began funding ideas through Canadian capital markets in 1993. Donald is the founder and former CEO of Plutonic Power Corporation (TSX: PCC), a British Columbia-based renewable power development company with a broad portfolio of clean energy projects. In 2011, Plutonic merged with Magma Energy Corp. (TSX: MXY) to create Alterra Power Corp. (TSX:



Financials

AXY), a diversified clean energy company with annual gross revenue in excess of $100mm. Mr. McInnes currently serves as Alterra’s Vice Chairman of the Board and Chair of the Health & Safety Committee. Donald is a frequent public speaker, passionate contributor to the debate on public policy, and involved member of the business community. He shares his talents with a variety of boards and associations, including serving as Past Chair of the Board of Prostate Cancer Canada, Past Chairman of the Clean Energy Association of British Columbia, and Past Governor of the British Columbia Business Council, among many others. In the past four years, he has been awarded an EY Entrepreneur of the Year Award in the Pacific Division Cleantech category, the Queen’s Diamond Jubilee Medal, and the Clean Energy Association of British Columbia’s Lifetime Achievement Award.

The following table shows a summary of the company’s operating performance.

STATEMENTS OF OPERATIONS Dec-31 Sep-30 Sep-30 Sep-30 Sep-30 Sep-30 Sep-30

(in US$) - YE Sept 30 2014 2015 (9M) 2016E 2017E 2018E 2019E 2020E

Net Revenues 6,113,792 3,017,516 5,704,716 9,240,943 13,352,358 18,454,716 26,409,433

COGS 4,737,234 2,384,954 3,993,302 6,012,283 8,205,707 9,713,679 12,602,358

Gross Profit 1,376,558 632,562 1,711,415 3,228,660 5,146,651 8,741,037 13,807,075

EXPENSES

G&A 787,396 521,613 1,296,437 1,361,258 1,429,321 1,500,787 1,575,827

Salaries & professional fees 1,121,157 1,329,306 1,690,324 1,774,840 1,863,582 1,956,761 2,054,599

Sales and marketing 291,834 408,109 1,140,943 1,386,141 2,002,854 3,690,943 5,281,887

EBITDA (823,829) (1,626,466) (2,416,289) (1,293,579) (149,106) 1,592,546 4,894,762

Amortization 452,266 353,880 220,082 198,222 188,400 179,560 171,604

EBIT (1,276,095) (1,980,346) (2,636,371) (1,491,802) (337,506) 1,412,986 4,723,158

Interest expense 444,093 658,966 691,501 541,948 541,948 541,948 541,948

EBT (1,720,188) (2,639,312) (1,944,869) (949,853) 204,442 1,954,934 5,265,107

Other income, gain (loss) of notes, assets, etc 221,558 (551,199) (3,229,962) 750,000 750,000 750,000 750,000

Taxes - - 421,727 1,580,287

Net Profit (Loss) (1,498,630) (3,190,511) (5,174,831) (199,853) 954,442 2,283,207 4,434,819

EPS -96.90 -221.21 -0.09 -0.00 0.02 0.04 0.08

The company generated $6.11 million in revenues in 2014. Revenues dropped to $3.02

million in the first nine months of 2015 ($4.02 million annualized). Subsequent to the RTO,

the company changed its year-end to September 30th. In Q1-2016 (quarter ended December

31, 2015), the company reported revenues of $1.07 million, down by 9% YOY from Q1-

2015’s $1.17 million. The revenue drop in 2015 was primarily because the company was

restricted by working capital deficiencies in 2015, which resulted in a drop in production.

The company was also unable to continue outsourcing the production of the DBM putty

product line, which had accounted for $1.9 million in revenues in 2014. However, by the

end of Q1 2016, Lattice completed their in-house formulation, and are currently able to

generate revenues from this product, with significantly improved margins. Also, as

mentioned earlier, the company intends to increase production of their demineralized bone

product by increasing donor recovery to 30 donors a month compared to just 10 per month

in 2015.



Cash Flows

Our revenue forecast for FY2016 is $5.70 million and for FY2017 is $9.24 million.

Gross margins improved significantly to 29.2% in Q1-2016, up from 17.5% in Q1-2015, primarily due to the change in product mix and addition of higher margin products. Our discussions with management indicated that they expect gross margins to stabilize at 50% - 60% by 2017.

Margins 2014 2015 (9M) Q1-2015 Q1-2016 Industry

Gross 22.5% 21.0% 17.5% 29.2% 45%

EBITDA -13.5% -53.9% -46.3% -60.6% 19%

EBIT -20.9% -65.6% -55.6% -71.2%

Net -24.5% -105.7% -74.1% -351.3% 9%

Expense as a % of Revenues 2014 2015 (9M) Q1-2015 Q1-2016

G&A 12.9% 17.3% 27.1% 27.0%

Salaries & professional fees 18.3% 44.1% 27.5% 42.3%

Sales and marketing 4.8% 13.5% 9.3% 20.5%

Total 36.0% 74.9% 63.8% 89.8%

General and administrative (“G&A”) expenses were $0.29 million (27% of revenues), and salaries / professional fees were $0.45 million (42% of revenues) in Q1-2016. Management indicated to us that they expect G&A expenses and salaries / professional fees to be approximately $1.3 million and $1.7 million, respectively, in FY2016. Sales and marketing expenses were $0.22 million in Q1-2016, and were 21% of revenues, up from 9% in Q1-2015. Management expects sales and marketing expenses to be 20% of sales going forward. The company reported approximately $2.5 million in expenses related to listing and stock based compensation. Including these one-time expenses, Lattice reported a net loss of $3.74 million (EPS: -$1.00) in Q1-2016 versus net profit of $0.87 million in Q1-2015. Our forecast for FY2016 is a net loss of $5.17 million (EPS: -$0.09), and for FY2017, is a net loss of $0.20 million (EPS: -$0.00). As shown above, we expect

the company to achieve profitability in FY2018. The following table shows a summary of the company’s cash flows:



Balance

Sheet

Summary of Cash Flows

(US$, mm) 2014 2015 (9M) Q1-2015 Q1-2016

Operating -$1.65 -$1.51 -$0.33 -$0.88

Investing -$0.40 -$0.04 $0.00 $0.00

Financing $1.83 $1.34 -$0.32 $1.20

Effects of Exchange Rate $0.00 $0.00 $0.00 $0.00

Net -$0.22 -$0.22 -$0.64 $0.32

Free Cash Flows to Firm (FCF) -$2.05 -$1.55 -$0.33 -$0.88 Free cash flows (“FCF”) were -$0.88 million in Q1-2016 versus -$0.33 million in Q1-2015. Management expects CAPEX to be approximately $0.10 million per year in FY2016 and FY2017.

At the end of Q1-2016, the company had $0.37 million in cash. Working capital and the current ratio were -$1.96 million and 0.6x, respectively. The following table shows the company’s cash and liquidity position.

Liquidity & Capital Structure 2014 2015 Q1-2016

(US$)

Cash 268,098 50,293 367,742

Working Capital (266,194) (1,382,220) (1,955,479)

Current Ratio 0.9 0.7 0.6

LT Debt 2,286,612 4,695,453 4,139,353

Total Debt 4,579,901 6,915,013 6,678,682

LT Debt / Capital 51.1% 155.4% 155.2%

Total Debt / Capital 102.4% 228.8% 250.5% 25.6%

EBIT Interest Coverage (2.9) (3.0) (2.7)

Accounts Receivables Days 47.9 71.0 59.2

Inventory Days 257.7 361.6 254.9

Accounts Payable Days 181.3 286.2 89.0

Cash Cycle 124.2 146.3 225.2

Industry &

Comparables

As shown in the table below, the industry has a relatively long cash conversion cycle as companies in the space are typically required to maintain high inventory levels.



Stock Options

and Warrants

Valuation

and Rating

Key Players DSO DIO DPO Cash Cycle

CR Bard Inc. (US) 47.5 116 23.8 139.7

Johnson & Johnson (US) 57.5 140.4 124.4 73.5

Smith & Nephew plc (U.K) 75.1 382.9 250 208

Integra Lifesciences Corporation (US) 55.6 262.2 57.7 260.1

Wright Medical (US) 62.9 442.8 39.8 465.9

Stryker Corporation (US) 56.6 185.2 38.1 203.7

Average (excl. outliers) 59.2 254.9 89.0 225.2

Industry Classifications

Healthcare Equipment & Supplies 70 141.7 60.3 151.4

Biotechnology 68.5 160.8 120.7 108.6

Average 69.3 151.3 90.5 130.0 Lattice had $6.68 million in debt at the end of Q1-2016.

Current Long-Term Total

Notes Payable 2,008,079 537,611 2,545,690

Royalty Payable 531,250 2,342,543 2,873,793

Investor Loans 1259199 1,259,199

Total 2,539,329 4,139,353 6,678,682

Subsequent to the end of Q1-2016, the company announced that approximately $1.4 million of debt (interest – 20% p.a.) held by CEO and CFO will be converted to equity at C$0.21 per share for 8.8 million shares of Lattice. We consider this as a major vote of

confidence from management, and further indicates management’s strong conviction

in the company’s prospects.

Equity Financing – On March 18, 2016, the company announced a $0.50 million financing by issuing units at a price of C$0.30 per unit. Each unit consists of a common share and one half of a share purchase warrant (exercise price – C$0.30 per share for 36 months). According to management, on March 31, 2016, Lattice completed the first tranche of $0.30 million. Lattice currently has no options and 3.96 million warrants (weighted average exercise price – C$0.55) outstanding. None of the warrants are currently in the money. Discounted Cash Flow (“DCF”) Valuation: Our DCF valuation on Lattice’s shares is C$0.89 per share.



DCF Valuation

in C$

2016E (Jan -

Sept 30) 2017E 2018E 2019E 2020E Terminal

Funds flow from operations (adjusted) (387,133) 1,290,317 2,434,790 3,754,715 5,898,372

-increase in w/c 159,492 (305,833) (386,636) (714,738) (1,028,699)

Cash flow from operations (227,641) 984,484 2,048,154 3,039,977 4,869,673

-capex (100,000) (100,000) (100,000) (100,000) (100,000)

Free cash flows (327,641) 884,484 1,948,154 2,939,977 4,769,673 70,182,329

Present Values (305,037) 748,606 1,498,972 2,056,465 3,033,006 44,628,524

Discount Rate 10%

Terminal Growth 3%

Present Value (in $) $51,660,535

Cash - Debt ($) -$4,910,940

Fair Value ($) $51,424,555

Shares O/S 57,937,346

Value per share (C$) $0.89

* long-term C$/US$: 1.1 The average cost of capital of the Biotechnology industry and the Healthcare Equipment & Supplies industry is approximately 7%. Considering the company’s track record and that it is in growth mode, we believe a discount rate of 10% appropriately captures investors’ expected return.

The following table shows the comparables valuation based on our expected revenue and EBITDA estimates in 2020. The estimated values have been discounted back to the present using a 10% discount rate.

2020 Forecast (Gross Revenues) $26,409,433 2020 Forecast (EBITDA) 4,894,762

Average EV/ Revenue 4.15 Average EV/ EBITDA 15.06

Expected EV (US$) $109,599,146 Expected EV (US$) $73,715,121

Value per Share (C$) $1.26 Value per Share (C$) $0.83

Comparables Valuation



Risks

Key Players EV / Sales EV / EBITDAReturn on

Equity

Return on

Capital

CR Bard Inc. (US) 4.9 16.2

Johnson & Johnson (US) 4.2 13.3

Smith & Nephew plc (U.K) 3.5 14.0

Integra Lifesciences Corporation (US) 3.7 16.5

Wright Medical (US) 4.5 n/a

Stryker Corporation (US) 4.1 15.3

Average (excl. outliers) 4.2 15.1

Industry Classifications

Healthcare Equipment & Supplies 3.7 15.9 7.9% 5.8%

Biotechnology 6.4 12.7 14.0% 8.2%

Average 5.1 14.3 11.0% 7.0%

The average of our three fair value estimates is $0.97 per share. Based on our

valuation models, we are initiating coverage on Lattice with a BUY rating and a fair

value estimate of $1.00 per share.

The following risks may cause our estimates to differ from actual results (not exhaustive):

� The company’s ability to innovate and develop new products will play a vital role in its

long-term success.

� Lattice is a relatively new company and does not have a track record of profitability.

� Lattice’s lead products are relatively new and have a short track record of sales.

� There is no guarantee that the upcoming products will receive FDA approval.

� The new generation ECM technology has yet to be commercially adopted.

� Negative publicity concerning methods of human tissue recovery may reduce demand

for allografts.

� Lattice’s operations are highly dependent on the availability of human donors.

� Companies operating in the space are subject to extensive regulation by the FDA. They

are also subject to continuing regulatory compliances by the FDA and other authorities,

which may result in delays in the commercialization of products.

� Political and economic conditions, and government fundings have a large impact on the

regenerative medicine market.

� As management and board members own 80% of the outstanding shares, the daily

average trading volume is low at the moment.



Appendix STATEMENTS OF OPERATIONS Dec-31 Sep-30 Sep-30 Sep-30

(in US$) - YE Sept 30 2014 2015 (9M) 2016E 2017E

Net Revenues 6,113,792 3,017,516 5,704,716 9,240,943

COGS 4,737,234 2,384,954 3,993,302 6,012,283

Gross Profit 1,376,558 632,562 1,711,415 3,228,660

EXPENSES

G&A 787,396 521,613 1,296,437 1,361,258

Salaries & professional fees 1,121,157 1,329,306 1,690,324 1,774,840

Sales and marketing 291,834 408,109 1,140,943 1,386,141

EBITDA (823,829) (1,626,466) (2,416,289) (1,293,579)

Amortization 452,266 353,880 220,082 198,222

EBIT (1,276,095) (1,980,346) (2,636,371) (1,491,802)

Interest expense 444,093 658,966 691,501 541,948

EBT (1,720,188) (2,639,312) (1,944,869) (949,853)

Other income, gain (loss) of notes, assets, etc 221,558 (551,199) (3,229,962) 750,000

Taxes -

Net Profit (Loss) (1,498,630) (3,190,511) (5,174,831) (199,853)

EPS -96.90 -221.21 -0.09 -0.00



BALANCE SHEETS Dec-31 Sep-30 Sep-30 Sep-30

(in US$) - YE Sept 30 2014 2015 2016E 2017E

ASSETS

CURRENT

Cash and cash equiv. 268,098 50,293 52,789 145,325

A/R 801,582 762,694 1,108,994 1,796,434

Prepaid 37,089 33,361 49,946 80,906

Inventory 3,344,158 2,955,642 2,373,348 3,573,293

Total Current Assets 4,450,927 3,801,990 3,585,076 5,595,959

PPE 662,581 645,676 525,594 427,372

Intangible 1,244,265 948,716 850,199 850,199

Goodwill 606,428 606,428 606,428 606,428

Total Assets 6,964,201 6,002,810 5,567,297 7,479,958

LIABILITIES

CURRENT

A/P 2,353,097 2,633,314 3,130,916 4,713,882

Lease 70,735 62,722 62,722 62,722

Factoring advances 268,614 295,475 325,023

Investor loans 132,978

Notes payable 1,660,307 1,782,060 2,008,079 2,008,079

Royalty payable 500,004 437,500 437,500 437,500

Total Current Liabilities 4,717,121 5,184,210 5,934,693 7,547,206

Lease 66,657 15,908 15,908 15,908

Investor loans 912,798 1,032,219

Notes payable 238,841 537,611 537,611

Convertible notes 988,100

Royalty payable 1,373,814 2,436,293 2,436,293 2,436,293

SHAREHOLDERS EQUITY

Share capital 1,430,000 913,845 5,487,708 5,987,708

Accumulated deficit / comprehensive loss -1,536,189 -4,806,606 -8,844,915 -9,044,769

Total shareholders’ equity (deficiency) (106,189) (3,892,761) (3,357,207) (3,057,061)

Total Liabilities and Shareholders Equity 6,964,201 6,002,810 5,567,297 7,479,958



STATEMENTS OF CASH FLOWS Dec-31 Sep-30 Sep-30 Sep-30

(in US$) - YE Sept 30 2014 2015 (9M) 2016E 2017E

OPERATING ACTIVITIES

Net profit for the year -1,498,630 -3,190,511 -5,174,831 -199,853

Adjusted for items not involving cash:

Depreciation 452,265 353,880 220,082 198,222

Others 543,919 348,475 2,161,325

Deferred tax asset

Funds From Operations -502,446 -2,488,156 -2,793,424 -1,631

Change in working capital

A/R 472,407 35,152 -346,300 -687,441

Prepaid -23,370 3,728 -16,585 -30,960

Inventory -1,305,963 388,516 582,294 -1,199,946

A/P -294,315 280,217 497,602 1,582,966

Factoring 268,614 26,861 29,548

NET CASH USED IN OPERATING ACTIVITIES -1,653,687 -1,511,929 -2,049,551 -307,464

INVESTING ACTIVITIES

PP&E -399,193 -41,426 -100,000 -100,000

NET CASH USED IN INVESTING ACTIVITIES -399,193 -41,426 -100,000 -100,000

FINANCING ACTIVITIES

Equity 1,030,000 -635,613 2,155,472 500,000

Debt -1,188,858 971,188 -3,425

Royalty funding 1,988,036 999,975

NET CASH FROM FINANCING ACTIVITIES 1,829,178 1,335,550 2,152,047 500,000

Foreign Exchange / Others

INCREASE IN CASH FOR THE YEAR -223,702 -217,805 2,496 92,536

CASH, BEGINNING OF THE YEAR 491,800 268,098 50,293 52,789

CASH, END OF THE YEAR 268,098 50,293 52,789 145,325



Fundamental Research Corp. Equity Rating Scale:

Buy – Annual expected rate of return exceeds 12% or the expected return is commensurate with risk Hold – Annual expected rate of return is between 5% and 12% Sell – Annual expected rate of return is below 5% or the expected return is not commensurate with risk Suspended or Rating N/A— Coverage and ratings suspended until more information can be obtained from the company regarding recent events. Fundamental Research Corp. Risk Rating Scale:

1 (Low Risk) - The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt. 2 (Below Average Risk) - The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt. 3 (Average Risk) - The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient. 4 (Speculative) - The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative. 5 (Highly Speculative) - The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues, and may rely on external funding. These stocks are considered highly speculative.

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The opinions expressed in this report are the true opinions of the analyst about this company and industry. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp. “FRC” does not own any shares of the subject company, does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company. Fees were paid by LBL to FRC. The purpose of the fee is to subsidize the high costs of research and monitoring. FRC takes steps to ensure independence including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. To further ensure independence, LBL has agreed to a minimum coverage term including an initiating and three update reports. Coverage can not be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time. The distribution of FRC’s ratings are as follows: BUY (70%), HOLD (8%), SELL (5%), SUSPEND (17%). To subscribe for real-time access to research, visit http://www.researchfrc.com/subscription.htm for subscription options. This report contains "forward looking" statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products/services in the marketplace; acceptance in the marketplace of the Company's new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company's periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter. Fundamental Research Corp DOES NOT MAKE ANY WARRANTIES, EXPRESSED OR IMPLIED, AS TO RESULTS TO BE OBTAINED FROM USING THIS INFORMATION AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OR FITNESS FOR A PARTICULAR USE. ANYONE USING THIS REPORT ASSUMES FULL RESPONSIBILITY FOR WHATEVER RESULTS THEY OBTAIN FROM WHATEVER USE THE INFORMATION WAS PUT TO. ALWAYS TALK TO YOUR FINANCIAL ADVISOR BEFORE YOU INVEST. WHETHER A STOCK SHOULD BE INCLUDED IN A PORTFOLIO DEPENDS ON ONE’S RISK TOLERANCE, OBJECTIVES, SITUATION, RETURN ON OTHER ASSETS, ETC. ONLY YOUR INVESTMENT ADVISOR WHO KNOWS YOUR UNIQUE CIRCUMSTANCES CAN MAKE A PROPER RECOMMENDATION AS TO THE MERIT OF ANY PARTICULAR SECURITY FOR INCLUSION IN YOUR PORTFOLIO. This REPORT is solely for informative purposes and is not a solicitation or an offer to buy or sell any security. It is not intended as being a complete description of the company, industry, securities or developments referred to in the material. Any forecasts contained in this report were independently prepared unless otherwise stated, and HAVE NOT BEEN endorsed by the Management of the company which is the subject of this report. Additional information is available upon request. THIS REPORT IS COPYRIGHT. YOU MAY NOT REDISTRIBUTE THIS REPORT WITHOUT OUR PERMISSION. Please give proper credit, including citing Fundamental Research Corp and/or the analyst, when quoting information from this report. The information contained in this report is intended to be viewed only in jurisdictions where it may be legally viewed and is not intended for use by any person or entity in any jurisdiction where such use would be contrary to local regulations or which would require any registration requirement within such jurisdiction.

lattice - may 2016 · 2016. 5. 18. · siddharth rajeev, b.tech, mba, cfa analyst may 10, 2016 2016...

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