After its stock was almost completely wiped out, and it was already announced as the worst IPO in the wave of IPOs that swept the Tel Aviv Stock Exchange in 2020-2021, in recent days the medical device company has discovered Extension log Buds of recovery.
Since last Thursday, there has been a jump of more than 100% in the company’s stock, after Yoman announced a non-binding investment offer from a Chinese investment fund, at a considerable premium over the market price. Even after the jump in the stock, the market value of Yoman Extensions stands at NIS 100 million – still about 90% lower than the value at which it was traded at the height of the hype surrounding the small technology IPOs in Tel Aviv last February, and 83% lower than the price at which it was issued to the public a few months earlier.
Last Thursday, Yoman announced that it had received a letter from a Chinese investment fund called Shanghai RunYoung Capital Management, in which a non-binding offer to make a capital investment in the amount of at least 30 million dollars, against the allocation of 40% of the company’s capital, according to the value A $50 million company.
This value was 3.5 times higher than the value at which Yoman Extension was traded at the time of the report, which led to the rise of the stock. If the offer letter is indeed translated into an investment, an agreement will be signed with the Chinese fund to grant an exclusive license that will buy the fund marketing and distribution rights for the company’s products in the Asia-Pacific region.
Moore Investment House realized part of the position
It seems that the sharp jump in the share price was one of the factors that led the last institutional body that had an interest in it (holding more than 5%), the investment house Mor , to cut losses and exercise part of his position. Mor sold shares in the amount of NIS 736,000 and decreased to a 4.4% holding rate in Yoman Extensions. About a month ago, another institutional body took a similar step, when Altshuler Shaham sold shares for NIS 256,000 and ceased to act as an interested party with a 4.9% holding in the company.
A Globes investigation shows that this is not the first time that the Chinese fund is considering an investment in Yoman Extensions, and already did so on the eve of the IPO at the end of 2020. However, at that time the examination did not translate into an actual investment, after Yoman Extensions finally decided to carry out its IPO on the Tel Aviv Stock Exchange.
The Chinese fund (Raniang) is relatively unknown. It was founded in 2020 and is managed by Roger Lu, a financial investor with connections in Israel and North America. The fund specializes in investments in the field of life sciences and has an Israeli partner, Dr. Benny Zavi. Zavi, formerly the director of the catheterization unit at Schneider Children’s Hospital, has a background in investments in the life sciences, and was previously appointed as a partner in the venture capital fund of the Tamir Fishman investment house. Among the factors advising the foundation is the chemist, Prof. Aharon Chachanover, winner of the Nobel Prize, and the winner of the Israel Prize in Life Sciences Research, Prof. Eli Keshet.
In June, it lost 95% of its value since the issue
Yoman Extensions has developed robotic systems that enable minimally invasive surgeries (that is, surgeries performed without opening a large incision in the patient’s body). In addition to an increase in the need for surgeries that save hospital admissions, certainly after the outbreak of the Corona virus, it seemed that investors in Tel Aviv at the time were fascinated by the fact that the company’s product already had marketing approvals abroad and a distribution agreement with the European medical device company B. Brown, which yielded adequate revenues of 20.7 million shekels in 2020.
Yoman Extensions product / Photo: Courtesy of the company
Based on these revenues, the company made its IPO in November of that year, where it raised about NIS 160 million based on a company value of about NIS 600 million. In view of the success of the IPO, CEO and founder Dr. Tamar Frankel claimed at the time that “this is a growth company, but one that thinks very far ahead… I don’t know what will come first – an IPO on Nasdaq or a sale.”
However, immediately after the IPO, Yoman stopped supplying the goods and its revenues last year fell by 86% to only NIS 2.8 million, while the loss in 2021 was put at NIS 53.6 million, almost double that of 2020. The disappointment continued even into the first quarter of 2022: the revenues were only NIS 400,000, i.e. an annual rate of less than NIS 2 million, and the loss was NIS 12.8 million. The continuous deterioration in the company’s business performance crushed the stock and led to the fact that towards the end of last June it lost 95% of its value since the issue.
Reorganization – replacement of CEO and chairman
Yoman has been in the process of reorganization in recent months, after terminating the contract with the European distribution company B. Brown. In addition, a new CEO, Ronan Castro, took over the position last month, replacing the founder Frankel.
The shareholders of Yoman Extensions include the Shemelzer family, the controlling owner of the Shlomo Group whose extensive businesses span the fields of automobiles, real estate, insurance, tourism, projects and technology. The mother of the family, Atlia Shemelzer, owns 13.2% of Yoman’s share capital, while her son Assi Schmelzer held the position of chairman of the company until last week, when he was replaced by Zvi ben Ami Slovin. The shareholders also include investors from China and the Flying Cargo company of the brothers Daniel and Avi Rake.