Medical Industries Of The Americas Aims For Mini

LumiNola/E+ via Getty Images

Medical Industries of the Americas, Inc. (IAMR) has filed to raise $10 million in an IPO of its common stock, according to an S-1 registration statement.

The firm seeks to manufacture medical supplies for healthcare professionals in the United States.

IAMR is not producing revenue and its material debt load is overdue.

I'll provide an update when we get more details about the IPO from management.

Beverly Hills, California-based Medical Industries of the Americas, Inc. was founded to develop manufacturing capacity in the United States for various latex gloves, thermal packs and surgical tools.

Management is headed by co-founder, president and Chairman Abraham Summers, who has been with the firm since its inception in 2018 and was previously the founder of Gnosiis International LLC, a boutique economics and urban planning advisory firm, where he continues to serve as Managing Partner.

The company's primary offerings include the following:

Latex gloves

Thermal packs

Surgical marking products - future

Disposable scalpels - future

As of September 30, 2022, Medical Industries has booked fair market value investment of $44.9 million from investors including Gnosiis International, HarCal, 2036 Investments and others.

The company has not generated revenue since 2020 and is in the process of retooling its manufacturing facility.

The firm will target primarily distributors and wholesalers for its disposable gloves as well as additional products it plans to produce.

According to a 2022 market research report by Grand View Research, the global market for disposable gloves was an estimated $12.3 billion in 2021 and is forecast to reach $20.4 billion by 2030.

This represents a forecast CAGR of 5.8% from 2022 to 2030.

The main drivers for this expected growth are the growing demand for gloves due to the global pandemic and increased awareness of healthcare-associated infection risks.

Also, the chart below shows the historical and projected future growth trajectory of the U.S. disposable gloves market through 2030:

U.S. Disposable Gloves Market (Grand View Research)

Major competitive or other industry participants include the following:

Ansell Ltd.

Top Glove Corporation Bhd

Hartalega Holdings Berhad

Supermax Corporation Berhad

Kossan Rubber Industries Bhd

Ammex Corporation

Kimberly-Clark Corporation

Sempermed USA, Inc.

MCR Safety

Others

Below are relevant recent financial results derived from the firm's registration statement:

Statement Of Operations (SEC)

As of September 30, 2022, Medical Industries had $10,388 in cash and $15.4 million in total liabilities.

Free cash flow during the nine months ending September 30, 2022, was negative ($1.7 million).

Medical Industries intends to raise $10 million in gross proceeds from an IPO of its common stock, although the final figure may differ.

No existing shareholders have indicated an interest in purchasing shares at the IPO price.

The company is also registering for resale up to 811,500 shares from selling shareholders that are not part of the IPO.

Management says it will use the net proceeds from the IPO as follows:

for upgrading equipment at our Eufaula facility, [...] for working capital, and [...] to repay certain of our outstanding debt obligations, which amount includes accrued and unpaid interest through the date of repayment.

(Source - SEC)

Management's presentation of the company roadshow is not available.

Regarding outstanding legal proceedings, management did not characterize its current status.

However, the company has 'approximately $10,775,000 in outstanding debt all of which is currently overdue. Substantially all of our debt is secured by our assets, so that any action by a debt holder, such as foreclosure, could have a material adverse effect on our business.'

The sole listed bookrunner of the IPO is Spartan Capital Securities.

IAMR is seeking U.S. public capital market investment to fund the development of its manufacturing facility, to pay down debt and for working capital requirements.

The company's financials show no revenue since 2020 and significant losses in 2021.

Free cash flow for the nine months ending September 30, 2022, was negative ($1.7 million).

The firm currently plans to pay no dividends and retain any future earnings for its growth and working capital requirements.

The market opportunity for disposable gloves is large and expected to grow at a moderate rate of growth in the coming years.

Spartan Capital Securities is the sole underwriter and the one IPO led by the firm over the last 12-month period generated a return of negative (82.7%) since its IPO. This is a bottom-tier performance for all major underwriters during the period.

Risks to the company's outlook as a public company include its tiny size and lack of meaningful revenue history in recent years.

The firm's significant debt load is overdue which causes doubt about its ability to continue as a going concern.

I'll provide a final opinion when we learn more information about the IPO from management.

Expected IPO Pricing Date: To be announced.

Gain Insight and actionable information on U.S. IPOs with IPO Edge research.

Members of IPO Edge get the latest IPO research, news, and industry analysis.

Get started with a free trial!

This article was written by

I'm the founder of IPO Edge on Seeking Alpha, a research service for investors interested in IPOs on US markets. Subscribers receive access to my proprietary research, valuation, data, commentary, opinions, and chat on U.S. IPOs. Join now to get an insider's 'edge' on new issues coming to market, both before and after the IPO. Start with a 14-day Free Trial.

Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This report is for educational purposes and is not financial, legal, or investment advice. The information referenced or contained herein may change, be in error, become outdated and irrelevant, or be removed at any time without notice. The author is not an investment advisor. You should perform your own research on your particular financial situation before making any decisions. IPO investing can involve significant volatility and risk of loss.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.