The Medical Robotics Company Extension Log Reported this week that it is terminating an agreement with its sole distributor in Europe, the Aesculap company from the B.Braun Group. This decision comes against the backdrop of a sharp dip in diary revenue and a jump in Ma lossesIt was issued on the stock exchange about a year and a half ago.
The disappointing results have led to the fall of the Extension Diary share since its issuance of no less than 95%, giving it the dubious title of the worst IPO of the 2020-2021 cycle. The company, which is traded at a value of less than NIS 40 million, has cash in the amount of NIS 90 million as of the end of the first quarter.Sean of 2022, making her a candidate for takeover attempts.
Extension Log has developed robotic systems that allow for minimally invasive surgeries (i.e. surgeries performed without opening a large incision in the patient’s body). In addition to the increase in the need for surgeries that save hospitalizations, certainly after the outbreak of the corona, investors seemed fascinated by the fact that the company’s product already has marketing approvals abroad and a distribution agreement with the giant medical device company B. Brown, which generated NIS 19 million in revenue. In the first half of 2020. On the basis of these revenues, the company made its offering in November of that year, in which it raised about NIS 160 million at a company value of about NIS 600 million.
In view of the success of the offering, ECEO and founder of Extension Diary, Dr. Tamar Frenkel, because “this is a growth company but one that thinks very far … I do not know what will come first – an IPO or a sale”.
Immediately after the IPO in Tel Aviv, there was a significant turnaround in the company’s business. The first half of 2021 ended in a diary with revenues of only NIS 1 million – a decrease of 94% compared to the same period, and the entire past year ended with a huge loss of about 54 million NIS (almost double from 2020).
The weakness continued in the first quarter of 2022, when journal revenues amounted to only NIS 400,000, and the loss to NIS 13 million. The diary was blamed, among other things, on the distribution company that holds the right to market its products in Europe, which it claimed was delayed in the execution of the product marketing plan, and in its orders for additional products.
In the coming days, a new CEO, Ronen Castro, formerly CEO of the medical device company Alium Medical, which is also not really up as a listed company, is expected to join the company. he Will replace Frenkel, who founded the company and has run it for the past decade. Frenkel holds 7% of Diary shares, and an additional 6.5% is held by founding physician Amir Szold.
CEO Frenkel now explains, “We do not know exactly why Aesculap failed to sell the product well. There were of course the challenges of the Corona period, but in general it is very difficult to introduce new technology. We waited a while to see if the circumstances changed, but we realized that it was impossible to wait any longer. “
The leading shareholders in the company are Atalia Schmelzer (the controlling owner of the car, insurance and real estate group Shlomo) and her son Assi with 18%, the Reik brothers through Flying Cargo and directly – about 10%, Altshuler Shaham – 7%, the Chinese investor Ever Dilligent and Zi Zenghun (6.8% and 6.5% respectively) and Moore Investments (about 6%) None of these entities are specifically committed to the company’s business.