The merger process between the company has been delayed for more than two years Next Jen The stock exchange for St.-Tech Medical, which has developed a device for diagnosing infectious diseases by exhalation. The party responsible for the delay in the transaction is the Securities Authority, which refused until Today to approve the merger prospectus, and now another factor of uncertainty is added: what may turn out to be a control struggle between two groups of investors who each hold more than 5% of the company’s shares (whichIn which there are no other stakeholders).
In early July, a group of investors including Avi Ben Tal, former CEO of Network 13, and Moshe Birman, submitted a request to terminate the tenure of Next Jen’s board of directors (excluding foreign ministers) and appoint candidates on its behalf, some of whom are connected to Ashdod’s municipal politics: Haim Toledano , Rahamim Cohen Gevura, Ronen Nissim Tzadik, Daniel Benlulu and Adv. Shmuel Mishok.
The Group also demanded that Next Jen not make any disposition of the Company’s assets, the composition of the Board of Directors and / or the Company’s capital, until the convening of the General Meeting. Ben Tal and Birman are also investing in the private Saint-Tech, which is supposed to merge with Next Jen.
Ben Tal told Globes that “our move is not intended to harm the merger process or the company, but to achieve involvement in the process and transparency regarding it. For example, we do not currently know what is holding back the company’s prospectus with the Securities Authority. “Since we sent the request, there have been talks between the parties and we are talking about finding a solution with the consent of our higher involvement, perhaps through representation on the board or in other ways.”
At the same time, Harel Hershtik, the entrepreneur and technology inventor of Saint-Tech and a substantial shareholder in this company, announced that he is offering himself as a director at NextGen and wants to appoint another director on his behalf. Hershtik owns about 4% of the company, and a few weeks ago signed a voting agreement with investor Drew Morris (his partner at St. Tech), and together they hold 6.3%.
Amidror will remain as chairman and be rewarded
Herstik’s technology was developed by Hershtik while serving a prison sentence for the murder of the snake catcher Yaakov Sela in 1996, from which he was released about a year ago as a licensed prisoner. A previous report by Next Jen states that “Hershtik has previously served a 25-year prison sentence … The establishment of the company, which aims to help improve medical diagnostics and combat epidemics, reflects his desire to continue contributing to Israeli society, and is a key part of his integration. It is essential for the success of the merged Next Jen, now and in the future. ”
According to Next Jen chairman Yaakov Amidror (former head of the National Security Staff), “The company is currently in a struggle for control, but from what I was told, both parties are interested in completing the merger deal, and both are interested in me as chairman.”
By the way, the group led by Ben Tal initially asked to replace Amidror as well, but about a week ago announced that it was removing the issue from the agenda. On August 24, a special meeting will be held to discuss the terms of employment of Amidror – which to date has not received any actual salary from the company, and will now receive retroactive compensation in shares. Later, his remuneration will be NIS 13,000 a month, and he will receive a bonus of about NIS 300,000, from the merger of the companies and the raising of ancillary capital.
Against the background of the impending struggle for control of the company, Hershtik recently signed an agreement with the listed value-based company, which held about 5% of St. Tech’s shares and sold some of them (less than one percent) to Hershtik for NIS 250,000, at a price 5 times higher. almost From the market price. This, along with a promise that you will vote for a Saint-Tech merger if and when it goes to the polls.
Hershtik said in response that “the two groups are working for the same goal, for the purpose of promoting the merger. Things are being done in a good spirit and with mutual respect. What is before our eyes is only the good of the company.”
Next Jen lent about NIS 4 million to St. Tech
Next Jen, headed by CEO Yaniv Hebron, is a low-activity company with the exception of rights in the product for the treatment of diabetes. Saint-Tech is developing a rapid diagnostic device using a corona exhalation, which may, if proven accurate and effective, also be suitable for other diseases.
The company is traded in Tel Aviv at a value of less than NIS 50 million, after its share fell more than 80% from the peak of the beginning of February 2021. This value reflects the company after the merger with Saint-Tech a value of about NIS 200 million, but as stated the merger – Under which Next Jen is supposed to allocate about 75% of its shares to the owners of St. Tech – stuck, after it was announced about two years ago.
In the meantime, Next Jen provided NIS 4 million in loans to St. Tech. The company submitted an updated prospectus for the merger in April, but it has not yet been approved by the Securities Authority, so there is currently no deadline for completing the merger. Saint-Tech has no revenue today, and is in clinical trials. , But since then no significant progress has been made in clinical trials.
Apart from the founder Hershtik, two other prominent figures in St.-Tech are Prof. Shmuel Shapira, former director of the Biological Institute, and Zeev Rothstein, former CEO of Hadassah, head of the Scientific Advisory Committee of St.-Tech.