Cannabis-based pharmaceutical company Epm announced today that the Securities and Exchange Commission has frozen the company’s issuance for 14 days.
Epm was founded by the entrepreneur Reshef Suissa together with Prof. Rafael Meshulam from the Hebrew University, pioneers in the field of researching molecules from the source of cannabis. Prior to the IPO, Prof. Zeev Rubinstein, until recently CEO of Hadassah Hospital, was recruited to the company as president and chairman of the company’s advisory committee.
The company is interested in raising NIS 44 million at a value of NIS 381 million before the money in an innovative mechanism of issuance through crowdfunding through the Pandait website, while also appealing to investors who do not have a securities account. In recent weeks, the company has advertised a lot on television, as part of an agreement with the Keshet and Keshet channels, in the framework of which they were also issued shares in the amount of NIS 13 million. These publications appear to have included information that was not in the prospectus and it also appears that the Authority was under the impression that they were not worded with the required degree of care. Therefore, the Authority sought to republish the prospectus and include the additional details, or to refrain from disclosing it to investors in the offering.
In addition, as early as Thursday evening, the videos were removed from the company’s page on the Pandait website, and additional details were removed from the page, such as a phone number where you can contact and talk directly with the CEO. Application by the Authority.
On Thursday night, the company uploaded a new video in which it said “We are epm, yes, these are from the drug revolution and the time machine. We wanted to sharpen a few points ahead of the IPO.” Subsequently, several disclaimers appeared, according to which the video does not constitute an offer for securities and a feeling that the investment involves risk. Investors were also invited to review the company’s prospectus on the stock exchange website. This is a significant difference from the company’s original advertisement, which did include disclaimers in the subtitles, but the offering was presented as a replacement for those who had not previously had time to invest in a “company that invented the smartphone.”
According to the Pandait website, before the authority’s intervention, an order of NIS 18 million had already been made, which could actually be enough for the company to register for trading according to the terms of the stock exchange, although most crowdfunding terms state that he arrived unemployed if not summed.
The issue of epm is open as stated through an unlimited crowdfunding platform even for investors who do not have a securities account. The company has previously confirmed in a conversation with Globes that it is not at the right stage for institutional investors. Its products are expected to hit the market as early as 2025. The company has a live business note and a $ 1.9 million capital deficit.
In an earlier conversation, Hani Sheetrit Bach, senior vice president and director of the TASE’s economics department, told us that the TASE wants to be as open to the public as possible, and that this offer method is not particularly dangerous because the public can still be impressed by the prospect.
Last week, the Globes newspaper turned to the Securities Authority, following a conversation with Shahar Saidon, chairman and owner of Sable Investments, which also offers distribution and underwriting services. Saidon wondered about the restrictions placed on underwriters who market issues, as opposed to the free way the company was allowed to reach the public, including people who do not even have a securities account, and in this issue can invest at the click of a button through a crowdfunding platform.
The absurdity is that investors who have never invested in stocks or understand how the trading in the capital market works are offered to invest in the company without already giving it the same vital details as what is the company’s value in the IPO, what is the company’s income and expenses or rather how much it loses and burns each month To balance in a few years, the structure of shareholders, the structure of capital, assets and liabilities and more. “
“Mass fundraising is a welcome field that makes accessible to the general public investments that in some cases are also an interesting business opportunity but throw them straight into the stock market without knowing the rules of trading. “The stock exchange and both the authority and the company itself will be calmer, because before selling the issue to the public, there is a body that has done due diligence (due diligence) for the company.”