NewGen Announces Strategic Acquisition of MicroSort Reproductive Technology

Rhea-AI Summary

NewGenIvf Group (NASDAQ: NIVF) has announced a definitive agreement to acquire MicroSort, a proprietary sperm-sorting technology, for US$5 million. The acquisition will be funded through US$750,000 in cash and 2,500,000 ordinary shares at US$1.70 per share.

MicroSort's technology enables the separation of X and Y chromosome-bearing sperm cells before IVF procedures, using fluorescent DNA staining and flow cytometry. The technology serves couples seeking family balancing and prevention of X-linked genetic disorders. It currently has commercial applications and licenses in Thailand, Japan, Cambodia, and Mexico.

The transaction is expected to increase NewGen's shareholders' equity by US$4.25 million and includes assuming existing licensing agreements, creating an immediate additional revenue stream. The purchase price has been validated by an independent third-party valuation and approved by NewGen's board.

Positive

• Acquisition price of US$5 million includes significant equity component at premium to market
• Expected boost of US$4.25 million to shareholders' equity
• Immediate additional revenue stream from existing licensing agreements
• Technology already commercially proven in multiple countries
• May help meet Nasdaq continued listing requirements through equity enhancement

Negative

• US$750,000 cash expenditure required
• 2,500,000 new shares issuance causing dilution to existing shareholders

Insights

Financial Analyst

The $5 million acquisition of MicroSort technology represents a strategically sound investment for NewGen. The deal structure is particularly noteworthy - with only $750,000 in cash outlay and 2.5 million shares at $1.70 per share, NewGen preserves cash while boosting shareholders' equity by $4.25 million. This equity enhancement is important for maintaining Nasdaq listing compliance.

The acquisition brings immediate revenue diversification through existing licensing agreements in Thailand, Japan, Cambodia and Mexico. The potential market expansion into China and other Asian markets could significantly impact NewGen's growth trajectory, considering Asia's large population and increasing demand for fertility services.

For everyday investors: Think of this like buying a proven money-making machine that's already working in several countries, but only paying 15% in cash and the rest in company shares. The technology could open doors to huge markets like China, where even a small market share could mean substantial returns.

Medical Research Analyst

MicroSort's sperm-sorting technology represents a significant technological advantage in the fertility sector. The ability to separate X and Y chromosome-bearing sperm cells has two important applications: family balancing and genetic disease prevention. The latter is particularly valuable as it addresses X-linked genetic disorders, which affect approximately 1 in 4,000 births.

The technology's established commercial presence in multiple countries validates its reliability and market acceptance. For NewGen, this means reduced implementation risk and faster revenue generation. The potential expansion into China's market is particularly promising given the country's large population and evolving family planning policies.

In simple terms: This is like adding a highly precise sorting machine to NewGen's toolkit that can help prevent certain inherited diseases and assist in family planning. It's already proven to work in several countries, making it a lower-risk investment with immediate practical applications.

The technology, which will be acquired for US$5 million, allows for the separation of X and Y chromosome-bearing sperm cells

MicroSort offers several advantages for those seeking reproductive assistance and prevention of certain genetic disorders

BANGKOK, Thailand, Jan. 21, 2025 (GLOBE NEWSWIRE) -- NewGenIvf Group Limited (NASDAQ: NIVF) (“NewGen” or the “Company”), a comprehensive fertility services provider in Asia helping couples and individuals obtain access to fertility treatments, today announced that it has entered into a definitive agreement to acquire MicroSort, a proprietary sperm-sorting technology that enhances the Company’s capabilities in providing assisted reproductive services. This strategic acquisition strengthens NewGen’s position in the growing global fertility services market, bolstering the Company’s comprehensive array of options for those seeking reproductive assistance.

MicroSort enables the separation of X and Y chromosome-bearing sperm cells prior to in vitro fertilization (IVF) procedures. This sophisticated process involves fluorescent DNA staining and advanced flow cytometry, allowing for highly precise sperm cell sorting based on chromosomal content. The technology can be applied for couples who are looking to balance their family compositions, as well as those looking to prevent certain genetic diseases, specifically X-linked or X-limited disorders. MicroSort already has established commercial applications and an existing license base in several countries, including Thailand, Japan, Cambodia, and Mexico.

Under the terms of the agreement, NewGen will acquire the technology for US$5 million, to be satisfied through a combination of US$750,000 in cash and the issuance of 2,500,000 ordinary shares (as may be adjusted for any reverse stock split carried out by the Company prior to Completion) at a deemed value of US$1.70 per share. The US$5 million purchase price, which has been approved by NewGen’s board of directors, is supported by an independent third party valuation. This transaction structure, which is expected to boost the Company’s shareholders’ equity by US$4.25 million at the time of Completion, is expected to optimize the Company's capital allocation while adding significant technological capabilities to its service portfolio. Under the terms of the agreement, NewGen will assume the existing licensing agreements associated with MicroSort, which should create an immediate additional revenue stream through license fees from current users.

Mr. Siu Wing Fung Alfred, Founder, Chairman, and CEO of NewGen, commented, “This acquisition represents a significant milestone in our growth strategy and enhances our ability to provide advanced fertility solutions to our clients. Beyond the strategic value of expanding our service offerings, this transaction is structured to strengthen our balance sheet through the issuance of equity at a premium to market price. We believe this enhancement to shareholders' equity may support our ongoing efforts to meet Nasdaq Capital Market continued listing requirements. The integration of this technology into our existing service platform will strengthen our market position in the rapidly growing Asian fertility services market. In addition, MicroSort provides options for families looking to prevent certain genetic disorders, an application which will allow us to expand these services into countries like China and other burgeoning markets in Asia. We are thrilled to be able to offer new options for our customers, and we are optimistic about the impact our acquisition of MicroSort will have on our clients and our company.”

About NewGen

NewGen is a comprehensive fertility services provider in Asia helping couples and individuals obtain access to fertility treatments. With a mission to aid couples and individuals in building families regardless of fertility challenges, NewGen has dedicated itself to creating increased access to infertility treatment and providing comprehensive fertility services for its customers. NewGen’s management team collectively has over a decade of experience in the fertility industry. NewGen’s clinics are located in Thailand, Cambodia, and Kyrgyzstan, and present a full suite of services for its patients, including comprehensive infertility and assisted reproductive technology treatments, egg and sperm donation, and surrogacy, in the appropriate jurisdictions, respectively. To learn more, visit www.newgenivf.com. The information contained on, or accessible through, NewGen’s website is not incorporated by reference into this press release, and you should not consider it a part of this press release.

Forward-Looking Statements

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Without limiting the generality of the foregoing, the forward-looking statements in this press release include descriptions of the Company’s future commercial operations, business strategy, and financial condition. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, such as the Company’s inability to implement its business plans, identify and realize additional opportunities, including opportunities presented by the availability of technology like MicroSort, the Company’s inability to meet or exceed its financial projections, or changes in the regulatory or competitive environment in which the Company operates. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s annual report on Form 20-F and other documents filed or to be filed by the Company with the SEC from time to time, which could cause actual events and results to differ materially from those contained in the forward-looking statements. Copies of these documents are available on the SEC’s website, www.sec.gov. All information provided herein is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law

Investor Relations Contact

ICR, LLC
Robin Yang
Phone: +1 (212) 537-4406
Email: Newgenivf.IR@icrinc.com

FAQ

What is the total value of NewGen's MicroSort acquisition?

NewGen is acquiring MicroSort for US$5 million, consisting of US$750,000 in cash and 2,500,000 ordinary shares valued at US$1.70 per share.

How will NIVF's acquisition of MicroSort affect shareholders' equity?

The acquisition is expected to boost NewGen's shareholders' equity by US$4.25 million at the time of completion.

In which countries does MicroSort currently have commercial licenses?

MicroSort currently has commercial applications and licenses in Thailand, Japan, Cambodia, and Mexico.

What is the share price valuation for NIVF's MicroSort acquisition?

The shares are being issued at a deemed value of US$1.70 per share as part of the acquisition payment.

How many new shares will NIVF issue for the MicroSort acquisition?

NewGen will issue 2,500,000 ordinary shares as part of the acquisition payment, subject to adjustment for any reverse stock split prior to completion.