Orscan Technologies Ltd., which is developing 3D imaging systems for the diagnosis of melanoma and aesthetic uses, has filed a draft prospectus for an IPO on the Tel Aviv Stock Exchange (TASE). Orscan, controlled by a company owned by Yitzhak Tshuva, is planning a small offering: it wants to raise NIS 30-35 million at a company value of NIS 30-40 million, before money. Clal Finance Underwriting Ltd. is the underwriter.
Orscan launched sales earlier this year, although its revenue is still low. Revenue rose to $268,000 in the first half of 2013 from $8,000 in the first half of 2012, and its net loss narrowed to $244,000 from $373,000, and it has $261,000 in cash. A going concern warning was attached to the company's financial report.
Tshuva invested $1 million in Orscan at a company value of $1.8 million in 2010 and owns a 57.8% stake, In 2012, he invested an additional $330,000 at a company value of $4.8 million, and has now announced that he will invest NIS 2 million as part of the IPO.
Orscan was founded in 2010 by CEO Yariv Oz and VP R&D Einat Kidron. The company's technology uses proprietary algorithms to create 3D images from 2D pictures, in order to create a better picture of the body for diagnostic purposes. The company's commercial product is for the aesthetic, diagnostics, and cosmetic planning markets on the basis of a 3D model of the patient's face.
The product is manufactured and sold under contract by Alma Lasers Ltd., which generates 90-95% of Orscan's revenue. Alma Lasers was acquired earlier this year by Shanghai Fosun Pharmaceutical Group Co. Ltd. (SH: 600196; HK: 02196). Orscan handles direct sales in Israel, but revenue is insubstantial.
Orscan is developing a second product for full-body photographing and scanning to locate suspicious lumps and damage which might indicate skin diseases, including cancer. The 3D images can offer better diagnosis and documentation for comparison with subsequent scans.
The current product, which only provides scans and 3D modeling, has been approved for sale in the US without the need for regulatory procedures. The company is now developing a new generation of this product, which help doctors analyze the images, and which will therefore require US Food and Drug Administration (FDA) certification. The company has additional products under development.
Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2013
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