NIVF.NASDAQNewgenivf Group LTD
20-F/A: NewGenIvf Group Limited Files Amendment to 20-F, Reports Accumulated Deficit and Going Concern Uncertainty
Sentiment:
20-F/A Filing
NewGenIvf Group Limited files an amendment to its 2024 annual report, citing a going concern uncertainty and accumulated deficit, while also detailing various business activities including acquisitions, financing arrangements, and reverse merger discussions.
Capital raiseThe company has access to an equity line of credit facility of up to $100 million from White Lion Capital.The company consummated the fourth tranche of its debt financing under the terms of its existing Securities Purchase Agreement with the investor, At the closing of the fourth tranche, the Company sold to the investor a senior convertible note in the principal amount of $2,000,000.On April 1, 2025, the Company entered into a new Securities Purchase Agreement (2025 Securities Purchase Agreement) with JAK, pursuant to which, amongst other things: (i) the Company agreed to sell, at an initial closing, a senior convertible note in the aggregate original principal amount not exceeding $3,200,000, convertible into Class A Ordinary Shares pursuant to its terms; and (ii) the Company may require JAK (or JAK may require the Company, as applicable) to participate in the sale of one or more additional convertible notes (which aggregate original principal amount for all additional convertible notes shall not exceed $25,600,000).
Worse than expectedThe company's auditor expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit and a deficit in shareholders' equity.The company reported a net loss attributable to the shareholders of $(524,643) for the year ended December 31, 2024, compared to a net income of $130,193 in 2023.
Summary
- NewGenIvf Group Limited filed an amendment to its Form 20-F for the fiscal year ended December 31, 2024, to remove JAK Opportunities VI LLC as a related party.
- The company's auditor expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit of $985,994 as of December 31, 2024, and a deficit in shareholders' equity of $1,481,757.
- NewGenIvf reported revenues of $5,433,375 for 2024, compared to $5,136,153 in 2023.
- The company's net loss attributable to shareholders was $(524,643) for 2024, compared to a net income of $130,193 in 2023.
- The company consummated a business combination on April 3, 2024.
- NewGenIvf is pursuing various financing activities, including an equity line of credit with White Lion Capital for up to $100 million.
- The company has been involved in discussions regarding potential reverse mergers with European Wellness Investment Holdings Limited (EWIHL) and COVIRIX Medical Pty Ltd, though the COVIRIX transaction was terminated.
- NewGenIvf acquired Bi Clinic Ltd in December 2024 for $15,000.
- The company completed the sale of its First Fertility Bishkek LLC in December 2024.
- The company's Class A Ordinary Shares will begin trading on the Nasdaq Capital Market (Nasdaq) on a post-Reverse Stock Split basis.
- The company is pursuing various fundraising projects to improve the company's cash flow position.
Sentiment
Score: 4
Explanation: The document presents a mixed picture, with revenue growth offset by significant losses and going concern uncertainty; the active pursuit of financing and strategic acquisitions provides some positive signals, but the overall sentiment is cautiously negative.
Positives
- Revenue increased from $5,136,153 in 2023 to $5,433,375 in 2024.
- The company has access to an equity line of credit facility of up to $100 million from White Lion Capital.
- The company completed the acquisition of the MicroSort technology from Genetics & IVF Institute, Inc. (GIVF) for a cash consideration of $750,000 and a share consideration of 125,000 Ordinary Shares.
- The company consummated the fourth tranche of its debt financing under the terms of its existing Securities Purchase Agreement with the investor, At the closing of the fourth tranche, the Company sold to the investor a senior convertible note in the principal amount of $2,000,000.
Negatives
- The company's auditor expressed substantial doubt about its ability to continue as a going concern.
- The company has an accumulated deficit of $985,994 as of December 31, 2024.
- The company has a deficit in shareholders' equity of $1,481,757 as of December 31, 2024.
- The company reported a net loss attributable to the shareholders of $(524,643) for the year ended December 31, 2024, compared to a net income of $130,193 in 2023.
Risks
- The company's ability to continue as a going concern is uncertain.
- The company's operations are subject to political, economic, and legal risks in Thailand, Cambodia, and Kyrgyzstan.
- The company is exposed to credit risk related to accounts receivable and cash and cash equivalents.
- The company is exposed to interest rate risk through changes in interest rates related to variable-rates bank balances.
- The company is exposed to foreign currency risk related to assets and liabilities denominated in foreign currencies.
- The company's operations are subject to special considerations and significant risks.
Future Outlook
Management plans to address the going concern issue through the issuance of shares via an equity line of credit with White Lion Capital and the conversion of JAK's promissory notes; the company is also carrying out various fundraising projects to improve the company's cash flow position.
Industry Context
The company operates in the in-vitro fertilization (IVF) and surrogacy services industry, which is experiencing growth due to increasing infertility rates and advancements in reproductive technologies; the company's expansion into new markets and its acquisition of MicroSort technology are strategic moves to capitalize on these trends.
Comparison to Industry Standards
- It is difficult to compare NewGenIvf's results directly to industry standards without more specific information on comparable companies and projects.
- However, the company's revenue growth and expansion into new markets are generally positive indicators.
- The accumulated deficit and going concern uncertainty are significant concerns that need to be addressed.
- Companies like CooperSurgical, Vitrolife, and Boston Scientific are key players in the fertility market, offering a range of products and services.
- NewGenIvf's focus on IVF treatment and surrogacy services positions it within a specific segment of the broader healthcare industry.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Director, Audit Committee, Compensation Committee | Yip Eng Jeremy Foo | Florianna Ann Chi Wan Chan | April 15, 2025 | Personal reasons (resignation of previous person) |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Share Incentive Plan Amendment | The Board approved certain amendments to its Share Incentive Plan of 2024, whereby the maximum aggregate number of shares with respect to which Awards may be granted under the Plan shall be 1,054,260 Shares, which may be increased from time to time as determined by the Board or Committee of the Board, in an amount equal to 20% of the then outstanding ordinary shares of the Company at the time of such increase. | March 28, 2025 | The awards of which are valid for a period of 10 years from March 28, 2025. |
Related Party Transactions
- Historically, certain amount of cash provided by operating activities was given to Mr. Wing Fung Alfred Siu and Ms. Hei Yue Tina Fong, resulting in amount due from them.
- As of December 31, 2024, the aggregate balance of amount due to Mr. Siu and Ms. Fong was US$92,651.
- NewGenIvf also recorded remuneration to its directors, Mr. Siu and Ms. Fong.
- Mr. Siu Wing Fung also entered into agreement to waive the balance of due from the Company of US$88,151 in 2023.
Stakeholder Impact
- Shareholders face uncertainty due to the company's going concern status and accumulated losses.
- Employees may be concerned about the company's financial stability.
- Customers may be impacted by potential changes in service offerings or pricing.
- Suppliers and creditors face increased risk due to the company's financial challenges.
Next Steps
- The company intends to address the going concern issue through the issuance of shares via an equity line of credit with White Lion Capital and the conversion of JAK's promissory notes.
- The company will continue to monitor the market for opportunities and carry out various fundraising projects to improve the company's cash flow position.
- The company will work together on several initiatives, including enhancing clinical protocols and patient management systems, knowledge exchange between fertility specialists, coordinated marketing and brand-building activities in Kyrgyzstan, and developing specialized fertility treatment options for the regional market.
Key Dates
| Date | Description |
|---|---|
| January 16, 2019 | NewGenivf Limited incorporated in Cayman Islands |
| April 29, 2021 | A SPAC I Acquisition Corp. (ASCA) was incorporated as a British Virgin Islands business company. |
| February 15, 2023 | ASCA entered into the Merger Agreement with NewGenIvf Limited. |
| June 12, 2023 | Parties entered into the First Amendment to Merger Agreement. |
| December 6, 2023 | Parties entered into the Second Amendment to the Merger Agreement. |
| April 3, 2024 | The Business Combination was consummated. |
| April 17, 2024 | Company entered into a non-binding term sheet with European Wellness Investment Holdings Limited (EWIHL). |
| May 24, 2024 | Company received a deficiency letter from Nasdaq. |
| June 3, 2024 | Company announced the execution of a non-binding term sheet regarding a proposed reverse merger with COVIRIX Medical Pty Ltd. |
| August 7, 2024 | Company entered into a Securities Purchase Agreement with certain investors. |
| August 12, 2024 | Company and JAK consummated the Initial Closing. |
| August 28, 2024 | Company consummated the second tranche of its debt financing under the terms of the Securities Purchase Agreement. |
| September 21, 2024 | COVIRIX withdrew from the Proposed Transaction. |
| November 11, 2024 | Company consummated the third tranche of its debt financing under the terms of the Securities Purchase Agreement. |
| November 18, 2024 | Company entered into a binding term sheet with White Lion Capital, LLC. |
| November 21, 2024 | A delisting notice was received from the continued non-compliance. |
| November 29, 2024 | Company appointed Tam, Chun Wa to the Company's Board of Directors. |
| December 11, 2024 | NewGenIvf announced its entry into a binding term sheet with European Wellness Investment Holdings Limited (EWIHL) for the above proposed reverse merger. |
| December 17, 2024 | The Company acquired Bi Clinic Ltd (Bi Clinic). |
| December 18, 2024 | The Company completed the sale of its First Fertility Bishkek LLC. |
| January 21, 2025 | The Board of Directors of the Company approved a reverse stock split. |
| February 11, 2025 | The Company's Class A Ordinary Shares will begin trading on the Nasdaq Global Market (Nasdaq) on a post-Reverse Stock Split basis. |
| February 19, 2025 | The Company received a confirmation from Nasdaq that its application to transfer its listing to the Nasdaq Capital Market had been approved. |
| February 24, 2025 | The Company entered into a Consulting Services Agreement with A SPAC (Holdings) Group Corp (ASPAC). |
| February 27, 2025 | The Company received a confirmation from Nasdaq that its application to transfer its listing to the Nasdaq Capital Market had been approved. |
| February 28, 2025 | The Company completed its acquisition of the MicroSort technology from Genetics & IVF Institute, Inc. (GIVF). |
| March 3, 2025 | The Company issued the 150,000 Class A Ordinary Shares to ASPAC. |
| March 10, 2025 | The Company received a confirmation letter from Nasdaq confirming that it has demonstrated compliance with all of Nasdaq's listing requirements. |
| March 31, 2025 | The Company terminated the binding term sheet with healthcare company European Wellness Investment Holdings Limited (EWIHL). |
| March 31, 2025 | The Companys Board approved certain amendments to its Share Incentive Plan of 2024. |
| April 1, 2025 | The Company entered into a new Securities Purchase Agreement (2025 Securities Purchase Agreement) with JAK. |
| April 2, 2025 | The Company consummated the fourth tranche of its debt financing under the terms of its existing Securities Purchase Agreement with the investor. |
| April 4, 2025 | Mr. Yip Eng Jeremy Foo, a director of NewGenIvf Group Limited (the Company), has resigned from the Board of Directors of the Company. |
| April 15, 2025 | Ms. Florianna Ann Chi Wan Chan will be appointed as a director of the Company. |
| April 15, 2025 | The Board of Directors approved another reverse stock split. |
| May 2, 2025 | The Company expects that the Reverse Stock Split will become effective on or around May 2, 2025. |
| May 15, 2025 | Date of certifications by Principal Executive Officer and Principal Financial Officer. |
Keywords
NewGenIvf, going concern, financial statements, IVF treatment, surrogacy, reverse merger, convertible notes, equity line, Bi Clinic, MicroSort, JAK Opportunities, White Lion Capital, Nasdaq, related party transactions
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