Last-ditch plan saves IVF start-up Fertilis from collapse
Creditors of Fertilis, an IVF technology start-up backed by Hong Kong billionaire Li Ka-shing, have approved a last-ditch plan to save the company from collapse.
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Creditors of an IVF technology start-up backed by Hong Kong billionaire Li Ka-shing have approved a last-ditch plan to save the company from collapse.
Adelaide-based Fertilis called in administrators last month after accumulating close to $6m in losses over the past three years.
However the company will now emerge out of administration after a deed of company arrangement proposal led by the company’s chief operating officer Roger Yerramsetti was approved at a recent creditors’ meeting.
Mr Yerramsetti, through his company Cell Tech Holding, has promised a fresh injection of cash into the business and the repayment of unrelated creditors in full.
As part of the DOCA, Cell Tech will pay $450,000 into a deed fund, which will be used to repay creditors owed close to $1.2m.
The fund will be topped up with an expected $900,000 research and development tax refund that the company expects to receive for the 2023-24 financial year. That component of the fund will be used to repay the company’s financier, Innovation Structured Finance, which is the largest creditor with a $617,621 claim.
Cell Tech will take over all shares in the company, giving Mr Yerramsetti the power to appoint new directors to lead the company out of trouble.
Minutes from the creditors meeting reveal that former chief executive Marty Gauvin, who was appointed in 2019 to help commercialise the technology but resigned as a director earlier this year, was the only creditor to reject the DOCA proposal after raising several concerns, including questioning whether Cell Tech had the financial capacity to meet its commitments.
Mr Gauvin is owed more than $77,000. Administrators Andrew Heard and Victoria Young from Heard Phillips Lieberenz had recommended creditors approve the DOCA proposal.
Fertilis has been seeking to commercialise its IVF micro-device which has been designed to improve IVF success rates by automating the process in an environment that more closely resembles the conditions in the human body.
Reproductive biologist Jeremy Thompson, who co-founded the company in 2019, has been developing the technology since the 1990s.
Mr Ka-shing’s venture capital firm, Horizon Ventures, led a $2.75m seed funding round in 2021 to fast track the company’s path to sales, at which point the company was hoping to introduce its first commercial product by 2023. Other shareholders include the University of Adelaide.
However administrators said the company hit a major roadblock earlier this year when it was unable to secure additional funding from Innovation Structured Finance. Mr Yerramsetti did not return calls.
Originally published as Last-ditch plan saves IVF start-up Fertilis from collapse
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