Israeli diagnostics co G Medical set for Nasdaq offering

Dr. Yacov Geva Photo: Tamar Matsafi
Dr. Yacov Geva Photo: Tamar Matsafi

The Israeli company has developed two products: a heart diagnostic device connected to a smartphone and a sticker for monitoring patients in hospital beds

Israeli medical diagnosis company G Medical Innovations Holdings Ltd. (ASX: GMV) has submitted a prospectus for a Nasdaq offering. 

G Medical is a public company already listed on the Australian Securities Exchange (ASX) since May 2017 and over-the-counter (OTC) in the US, which is now aiming to upgrade its listing there. Its current market cap in Australia is A$84 million (NIS 205 million). Late last year, after its share almost doubled in value following the company's IPO in Australia, G Medical announced that it had contracted an agreement with underwriters in New York to help it in the process of being listed for trading on Nasdaq. The share price has since receded, and is now back to where it was in its Australian IPO (although the company market cap is higher following its financing rounds).

G Medical offers medical monitoring solutions. It has developed two products: a heart diagnostic device connected to a smartphone and a sticker for monitoring patients in hospital beds and when the patient moves around the hospital. Dr. Yacov Geva has been president and CEO of G Medical since it was founded in 2014, He previously founded and managed Card Guard (LifeWatch), which held an IPO on the SIX Swiss Stock Exchange in Zurich.

Geva sold his stake in LifeWatch, which specialized in remote monitoring of cardiac patients and people with sleep disorders, in 2015 for over NIS 100 million, following a struggle for control of the company that culminated in his dismissal from management of the company he founded. Geva is the controlling shareholders in G Medical with a 55.7% holding with a current value of NIS 114 million.

Revenue growth and a reduced loss

G Medical plans to issue American Depositary Shares (ADS), securities that follow a share traded on a non-US stock exchange, in this case the ASX. The underwriting for the offering is HC Wainwright, which also received an option to buy more securities. The amount that G Medical wants to raise in the offering was not reported at this stage, but the company says that the proceeds will be used to enlarge its sales and marketing team; for continued development of next-generation products, including clinical trials and financing the regulatory procedure for obtaining marketing approval; and for working capital and general uses, which is likely to include future acquisitions.

Geva told "Globes" several weeks ago that the company used its connections in the Australian market in becoming listed in it because this stock market was open to companies of this type, "but it was clear to us that when the company became mature enough, we would have it listed on Nasdaq. This is the right market for the company, because the US market accounts for most of our revenue now and for the foreseeable future, and the comparable companies are also listed there."

A few months ago, G Medical, incorporated in the Cayman Islands, announced that it planned to hold an offering for its Chinese subsidiary, Guangzhou Innovative Medical Science and Technology, on the Hong Kong Stock Exchange. G Medical said that the time that the value of the subsidiary in the offering would reach 1.5 billion Hong Kong dollars, and that G Medical itself would hold 50% of the subsidiary's shares following the offering, compared with 70% before the offering.

This means that according to the value sought for the subsidiary, the value of G Medical's holding in it was higher than G Medical's own entire value. A prospectus submitted in the US stated that the offering in Hong Kong for the subsidiary was scheduled for the third quarter of this year. The prospectus repeated that G Medical would hold 50% of this subsidiary, whose value would be at least 1.5 billion Hong Kong dollars (A$260 million, $190 million).

G Medical had $2.6 million in cash as of the end of 2018. It has agreements for the loans it received from Mizrahi Tefahot Bank and from Geva. G Medical finished 2018 with $3.1 million in revenue, almost all of which was from sales of products, and a small proportion of which was from services provided by the company. G Medical's 2018 net loss totaled $17 million, less than its $27.2 million loss in 2017.

Published by Globes, Israel business news - en.globes.co.il - on May 19, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Dr. Yacov Geva Photo: Tamar Matsafi
Dr. Yacov Geva Photo: Tamar Matsafi
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