Beacon MedX Health (MDX - V) Netherlands Provides Investors a Blueprint for Understanding Significant Recurring Revenue Potential December 15, 2020 Doug Cooper, MBA (416) 643 - 3863 dcooper@beaconsecurities.ca • MedX announced that it has begun the rollout of its technology package (hardware and software) in the Netherlands. • Through its Dutch partner, IVPG (www.ivpg.nl), MedX has installed its SIAScope hardware and DermSecure software platform in 2 clinics and expects to be installed in 3 more by the end of the year. • Even after only a month, the company has provided real-time data as per the patient uptake. In particular, over 800 assessments on 500 patients have been performed. This equates to ~20 assessments per day per clinic. As a reminder, MDX receives ~$10 per assessment, which creates a very profitable recurring revenue stream. • We believe there are some very important investment considerations from today’s announcement: a) The Netherlands is ranked 5th in the world in terms of melanoma skin cancer. In fact, over 50% of all reported cancers in the country are skin cancer; b) The Dutch government has deemed that the current standard of care for skin cancer prevention is not working; c) The choice of MedX’s skin cancer assessment technology shows its efficacy. • With the early success in just its initial 2 clinics, IVPG has indicated it plans to roll-out the technology platform to 41 clinics over the next 12-18 months. • We believe investors should understand the recurring, high margin, revenue juggernaut that is in the midst of being created. Given the metrics already apparent after just one month at the 2 installed clinics, 41 clinics would represent ~$3 million of recurring revenue (ie. 41 x 312 days x 20 scans x $10). • The Netherlands represents but the first of many country roll-outs that includes Brazil, Mexico, Canada and the United States. Today’s announcement provides investors a blueprint to understand the substantial operating leverage and earnings power inherent in MDX’s recurring revenue model. • Note that all countries face similar skin cancer prevention issues (ie. difficulty in early detection and long wait times to see a dermatologist). MedX’s platform has proven to be very effective at early detection, which is a win-win for patients and payors. As such, we anticipate future announcements could include clinic partnerships (ie. pharmacies, health clinics, etc) in countries around the world. With a population of 17 million and $3 million of recurring revenue from only 41 clinics, we believe the Netherlands’ announcement is very important but may ultimately represent a relatively small revenue contributor. • From a valuation perspective, with a market cap of ~$20 million and a model that is starting to demonstrate significant traction, MedX trades at a fraction of other tele-health/recurring revenue technology companies. • We maintain our Buy recommendation and $0.45 target price.