Medical device company Medivie Therapeutic has announced that its 90% owned subsidiary Medivie USA Inc. has filed a prospectus for a Reg A+ share offering of $10 million. Medivie USA seeks to make the offering at an after-money company valuation of $97 million. Part of the offering is a $3.7 million offer for sale, of which $2.2 million will go to Medivie UK (depending on the success of the offering and the final price). Following the announcement, Medivie Therapeutic's share price closed 40% up, giving the company a market cap of NIS 7 million.
A Reg A+ enables a company to raise capital from many investors but the shares are not at first marketable. They can be listed for trading on a US exchange at a later stage, depending on the value of the company and the share price. Medivie USA's offering does not currently have an underwriter (although this could change later on). The offering will be marketed by a crowdfunding company called CrowdFondue, which will offer the shares to its customers. In return, CrowdFondue has received 10% of Medivie USA, and it will also participate in the offer for sale, to the tune of $750,000.
The Medivie group has developed a device placed in a woman's mouth during childbirth that improves the flow of oxygen to the jaw, neck and head muscles, which relaxes the muscles and reduces pain during labor and labor time. The company says that it is developing similar devices for use in treating migraine, Alzheimer's, attention disorders and other conditions.
Medivie had revenue of NIS 159 thousand in 2015. Its product is sold in Israeli drugstore chain SuperPharm for NIS 250. The US subsidiary currently has no activity or cash, but it has a franchise on the product and an agreement with the Babies R Us chain to sell the product in the latter's 93 stores.
Together with the prospectus Medivie published a valuation according to which it is worth $121 million. The valuation is based on very optimistic growth forecasts, according to which it will have sales of $252,000 this year, rising to $76 million within less than five years.
Published by Globes [online], Israel business news - www.globes-online.com - on August 4, 2016
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