Why the Singular Health (ASX:SHG) share price is shooting 10% higher

The Singular Health Group Ltd (ASX:SHG) share price is shooting higher on Monday following an announcement. Here's what it announced…

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The Singular Health Group Ord Shs (ASX: SHG) share price has been a positive performer on Monday.

In morning trade the 3D medical imaging company's shares were up as much as 10% to 45 cents.

The Singular Health share price has since pulled back a touch but is still up 3.5% to 42.5 cents currently.

Why is the Singular Health share price shooting higher?

Investors have been buying Singular Health shares today after it announced a new purchase order.

According to the release, the company has received a $170,000 purchase order and payment schedule from FlowCentric Technologies. The purchase order will allow FlowCentric Technologies to conduct a pilot program using Singular Health's GeoVR software.

The pilot program aims to develop a prototype, commercially viable product, with an integrated special database that utilises imaging and predictive technologies for mining and exploration. It will leverage the company's proprietary Volumetric Rendering Platform (VRP).

FlowCentric Technologies is a software development company delivering Business Process Management software to over 350,000 users. It services a number of Tier 1 resources companies globally.

Joint venture

In addition to the purchase order, the two companies are currently finalising the terms for a joint venture in which they will each hold 50% of the issued shares.

This joint venture will aim to develop and utilise advanced imaging and predictive technologies into a software application, GeoVR, that can be used in mining and exploration activities.

The release explains that upon the receipt of the $170,000, Singular Health will be obligated to transfer all title and intellectual property relating to the GeoVR software into the new joint venture company.

Management commentary

Singular Health's CEO, Thomas Hanly, commented: "Whilst we remain focused on our core vision of Developing Better Health Literacy, this pilot program with FlowCentric Technologies presents a great opportunity to deploy our proprietary Volumetric Rendering Platform for use in the mineral resources sector."

"FlowCentric is a logical partner for Singular Health with their large number of existing business relationships in South Africa and Australia with leading geological software providers and resource companies."

"Furthermore, forming joint ventures with established businesses to build new verticals is critical to ensuring that we remain focused on our medical applications whilst also providing access to domain specific expertise and established client bases. The revenue earned from this pilot program also reinforces the Company's objective of advancing the commercialisation of its technology," he concluded.

The Singular Health share price has more than doubled since its IPO earlier this month.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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