InsuLine Medical Ltd. (TASE: INSL) today announced that it had agreed to accept a NIS 450,000 grant from new controlling shareholder Kfir Zilberman, who holds 10.6% of the company (according to yesterday's reports). The company said it had agreed to convene a general shareholders' meeting to discuss the replacement of the board of directors, as demanded by Zilberman. Insuline has developed a medical device for improving the administering of insulin, but the company's marketing efforts failed.
Insuline currently has no parties at interest other than Zilberman; its ownership is widely dispersed amount the public. Insuline's chairman is Doron Birger, and its CEO is Eyal Lewin. Zilberman is known in the capital market for putting new activity into stock exchange shells. After his effective takeover of Insuline, the company share price leaped yesterday by no less than 250%, pushing its market cap up to NIS 6.6 million.
Today, with the announcement that the company had agreed to the measures demanded by Zilberman, the company's share price rose moderately. Up until Zilberman's announcement, the company's share had lost 99% of its value over the past year.
A question of value
Insuline's product has been kept on the backburner for many months, after the company's controlling shareholders and senior officeholders left. In a letter sent to the company yesterday, Zilberman demanded that the company halt its capital raising at "ridiculously low" company values.
Zilberman himself offered to provide the company with financing until it gets back on its feet, instead of more financing rounds, until the general shareholders' meeting he is demanding in order to replace the board of directors is convened. His proposal was accepted today. Zilberman often cooperates with Itschak Shrem, and is also proposing Shrem as a company director in this case, together with Vered Raz Avayo and Eli Cohen. According to Insuline's financial statements, the company had NIS 1.5 million in cash as of the end of 2016, and a gross loss and only NIS 83,000 in revenue in 2016. The company raised NIS 690,000 in May.
Insuline's product is designed to expedite the absorption of insulin in the bloodstream through heating the area of the injection. It has not been listed in the German physician's book, because the German physicians' organization, which is considering the matter, has announced that it is not a medical product. The product, however, has undergone a successful joint trial with German insurance company BARMER, which undertook to provide reimbursement for the product, based on the trial results, when the product reached the market. The promise was withdrawn when the product was not added to the German physicians' book. A Johnson & Johnson subsidiary in German also signed an agreement to market the product if it is approved in the physicians' book.
Although Zilberman's entry into the company marks it as a stock exchange shell, it may still be possible to derive some value from its products and intellectual property.
Published by Globes [online], Israel Business News - www.globes-online.com - on July 5, 2017
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