BURLINGTON, Mass. and JERUSALEM - BrainsWay Ltd. (NASDAQ & TASE: BWAY), a leader in noninvasive neurostimulation treatments for mental health disorders, has announced a private investment financing agreement with Valor Equity Partners. The deal, which includes the issuance of American Depositary Shares (ADSs) and warrants, is valued at approximately $20 million with the potential to reach approximately $34.3 million if all warrants are exercised.
This strategic investment, set at a 20% premium over the 30-day volume-weighted average price of BrainsWay's ADSs, is aimed at bolstering the company's balance sheet and advancing its strategic initiatives. These initiatives include expanding market awareness, enhancing data analysis capabilities, developing its research and development roadmap, and broadening access to its Deep Transcranial Magnetic Stimulation (Deep TMS™) technology.
Valor Equity Partners, an operational growth investment firm with a portfolio that includes high-profile companies such as SpaceX and Tesla (NASDAQ:TSLA), brings a wealth of experience in scaling innovative technologies. The investment is seen as aligning BrainsWay with a prominent U.S. tech investor, which could be instrumental in accelerating the company's growth and market penetration.
The securities purchase agreement stipulates that Valor will have the right to nominate members to BrainsWay's board of directors, contingent on the level of voting rights held. Jonathan Shulkin, Partner and Co-President at Valor, is expected to be appointed as a board member following the transaction's closure.
The closing of the transaction is subject to customary conditions and shareholder approval. BrainsWay has committed to filing for shareholder approval within ten days following the agreement and to hold a meeting within thirty-five days thereafter.
The proceeds from this investment are earmarked for strategic growth initiatives, which the company believes will enable it to tap into new markets and revenue channels. The transaction does not involve a public offering, and the securities have not been registered under the Securities Act of 1933. However, a registration rights agreement has been entered into, which will see BrainsWay file a registration statement for the resale of the ADSs and the securities underlying the warrants following shareholder approval.
This financial move is based on a press release statement and reflects BrainsWay's ongoing efforts to advance its Deep TMS technology and strengthen its position in the global market for neurostimulation treatments.
"In other recent news, BrainsWay has reported significant financial growth with a 37% year-over-year revenue increase in Q1 2024, marking the second consecutive quarter of positive net income. The company also shipped 57 Deep Transcranial Magnetic Stimulation (Deep TMS) systems during this period, further solidifying its financial strength. BrainsWay's revenue guidance for 2024 is projected to be between $37 million and $40 million. H.C. Wainwright maintains a Buy rating for BrainsWay, reflecting confidence in the company's growth trajectory and financial performance.
Furthermore, BrainsWay has secured reimbursement for PTSD treatment in Israel, a significant development for eligible patients at Israeli public hospitals. This follows a study showing a substantial reduction in PTSD symptoms with Deep TMS treatment. The company is also actively extending reimbursement coverage to more medical centers and possibly private clinics.
In addition to these developments, BrainsWay has appointed Dr. Richard A. Bermudes as its new Chief Medical Officer, bringing over two decades of experience in brain stimulation therapies to the company. The company has also expanded into the Canadian healthcare sector through an exclusive distribution agreement, with plans to deliver a minimum of 11 Deep TMS systems in 2024. Lastly, the FDA has expanded the age range for BrainsWay's Deep TMS system, now allowing it to be administered to patients aged 22 to 86 with major depressive disorder."
InvestingPro Insights
BrainsWay Ltd. (NASDAQ & TASE: BWAY) has demonstrated strong financial performance and market positioning, as evidenced by recent InvestingPro data. The company's revenue growth of 42.0% over the last twelve months as of Q2 2024 aligns with its strategic initiatives to expand market awareness and broaden access to its Deep TMS™ technology. This growth trajectory is further supported by a robust gross profit margin of 74.82%, indicating efficient cost management and potentially strong pricing power for its innovative neurostimulation treatments.
The recent private investment from Valor Equity Partners comes at a time when BrainsWay is trading near its 52-week high, with a price that is 92.23% of its peak. This suggests investor confidence in the company's prospects, which is further reinforced by the stock's impressive 99.75% return over the past year.
InvestingPro Tips highlight that BrainsWay holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. These factors provide the company with financial flexibility to pursue its growth strategies, including the expansion of market awareness and enhancement of data analysis capabilities as outlined in the investment agreement with Valor.
It's worth noting that while BrainsWay is trading at a high P/E ratio of 228.65, this could be justified by the company's strong revenue growth and potential for market expansion in the neurostimulation treatment sector. The investment from Valor Equity Partners, known for backing innovative technologies, may further accelerate BrainsWay's growth trajectory.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for BrainsWay, providing deeper insights into the company's financial health and market position.
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