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Next: The SEC Hits Dropil and Founders with Charges Regarding Unregistered Initial Coin Offering

The long march of crypto enforcement actions continued today when the Securities and Exchange Commission (SEC) revealed charges against Dropil and founders Jeremy McAlpine, Zachary Matar, and Patrick O’Hara pertaining to an initial coin offering (ICO).

As has become fairly commonplace, the SEC is alleging the sale of unregistered securities pertaining to the sale of DROP tokens that apparently raised $1.8 million. In the filing, the SEC claims the defendants reported that amount as $54 million.

Additionally, the SEC Enforcement Division alleges that the company founders sold DROP tokens claiming the funds would be pooled to trade various digital assets by a “trading bot,” called Dex. Dropil allegedly claimed the trading would generate profits that would be distributed as additional DROP tokens every 15 days.

Instead of using investor money to trade with Dex, Dropil allegedly diverted the funds raised to other projects and to the founders’ personal digital asset and bank accounts.

The SEC claims that Dropil created fake Dex profitability reports and made payments in the form of DROPs to Dex users, giving the false appearance that Dex was operational and profitable.

All of this took place from January 2018 through March 2020 – well after the SEC DAO report that pretty much told the world ICOs were required to be registered as securities – or else.

As is typical with these cases, the SEC is demanding that Dropil return all the money and pay civil penalties.

SEC v. Dropil comp24804

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SEC Charges ICO Incubator And Founder For Unregistered Offering And Unregistered Broker Activity

The Securities and Exchange Commission today sued ICOBox and its founder Nikolay Evdokimov for conducting an illegal $14 million securities offering of ICOBox’s digital tokens and for acting as unregistered brokers for other digital asset offerings. 
According to the SEC’s complaint, ICOBox raised funds in 2017 to develop a platform …

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Steven Seagal to Pay Over $330,000 to the SEC for Promoting Bitcoiin. Yes, Bitcoiin

Image: GettyZen master goblin Steven Seagal, last seen promoting a straight-to-DVD action flick for fans such as Vladimir Putin–and also in sexual abuse allegations–has agreed to pay the SEC a total of $330,448.76 for failing to disclose the details of his financial relationship with the intriguingly-named cryptocurrency “Bitcoiin2Gen.” …

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Initial Coin Offering (ICO) Regulation in 2019 trends, developments, and what lies ahead

ICO (Initial Coin Offering) projects have been struggling hard over the recent years to achieve their ultimate business objectives due to various issues like scams, lack of transparency and lack of awareness about crypto market values. This gives rise to the birth of innovative trends in crypto regulations in the …

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SBI Card IPO will remain open for an extra day. Here’s why

NEW DELHI: Unlike a regular three-day affair, the offer period for the initial public offering (IPO) of SBI Cards & Payment Services (SBI Card) will span four trading days.

The IPO will be open for subscription from March 2 to 5.

Under normal circumstances, an IPO is open for subscription for a minimum period of three and a maximum of 10 working days under certain circumstances.

The Rs 10,352 crore SBI Card IPO ((including a fresh issue of Rs 500 crore) will be India’s fifth biggest issuances after Coal India (Rs 15,100 crore), Reliance Power (Rs 11,563 crore), GIC RE (Rs 11,370 crore), ONGC (Rs 10,543 crore).

The Coal India issue was open for four days. The biggest issue was sold from October 18 to 20, 2010, for qualified institutional bidders, and from October 18 to 21 for retail and HNI investors.

With SBI as its parent and 35 per cent of the issue reserved for retail investors, the SBI Card issue is expected to see huge demand. This has led iBankers to seek an extra day to ensure that retail investors get to file their applications on time and no extension is required.

“To ensure smooth conduct of the application process and accommodate retail investors from remote locations, we, on behalf of the promoter and company, requested the market regulator to give one more day so that exchanges can accept all applications up to 5 pm on the fourth day, exchange personnel need not work late on closing day and it becomes a win-win situation for everyone,” representatives of the book running lead managers (BRLM) told

Generally, retail and HNI investors take cue from QIB subscription, which closes by 3:30 pm and retail and HNI applications keep coming in till late on the last day.

In the case of SBI Card IPO, the portion reserved for retail investors is worth around Rs 3,200 crore.

If the retail quota is fully subscribed, based on the lot size of 19 equity shares, 22.5 lakh forms would be needed for one-time subscription.

SBI Card IPO: Why is it being seen as a hot cake?

​New kid in town

26 Feb, 2020

SBI Cards and Payment Services, a subsidiary of the State Bank of India (SBI), will hit the primary market with a Rs 10,350 crore initial public offering on March 2. The IPO will be the fifth biggest in India so far. With investor interest already high in the IPO, we bring you all the details you need to know before hitting ‘subscribe’ on the issue:(With inputs from Yes Securities and Axis Capital)

“Considering the initial feedback on demand and investor interest, we are expecting a huge number of applications as was witnessed in all the successful mega IPOs in the past,” the BRLM representative said.

Under normal circumstances, an IPO is kept open for a minimum of three days, which can then get extended by at least three more working days if the issuer decides to revise the price band.

In case of force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract), banking strike or similar circumstances, the issuer can extend the bidding period for a minimum of three working days.

On receiving strong bids, the issuer can even close the offer period for QIBs a day prior to closing date.

In the SBI Card IPO, about 1.31 crore shares have been reserved for investors, who were State Bank of India shareholders as on February 20. They can apply in both retail and shareholders categories if the application amount falls within the limit of Rs 2 lakh.

The SBI arm has fixed the IPO price band in the Rs 750-755 range. The IPO, which will include the issue of Rs 500 crore worth fresh shares and an offer for sale (OFS) of up to 13.05 crore shares, may fetch about Rs 10,350 crore at the upper limit of the price range.

Source: Ipo Search Results

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SBI Card IPO: Should you go for it?

ET Intelligence Group: SBI Cards & Payment Services (SBI Cards), a credit card subsidiary of SBI will raise Rs 500 crore through fresh issue of shares and up to Rs 9,854 crore through offer for sale of existing shares. After the IPO, SBI’s shareholding will fall to 70 per cent from 74 per cent and that of CA Rover Holdings will reduce to 16 per cent from 26 per cent. Given its dominant position in the domestic credit cards market and strong parentage of SBI, the company is well-positioned to take advantage of the rising trend of digital payments. Investors with a longterm horizon and wanting an exposure to growing consumerism may consider the IPO.

The company is the largest pure play credit card issuer in India. Considering the card services of banks, it is the second largest after HDFC Bank. With 10 million cards in force and Rs 98,500 crore in card spends in the nine months to December 2019, SBI Cards had 18 per cent market share. Nearly half the cards are issued using distribution channels of SBI and other banks while the remaining are through its customer acquisition network across 145 Indian cities.

Credit card spends in the country increased by 32 per cent annually to Rs 6.1 trillion between FY15 and FY19 according to RBI and CRISIL following rising awareness of digital payments. The proportion of digital transactions increased to 62 per cent in FY19 from 25 per cent in FY14. These factors augur well for SBI Cards.

The company’s revenue and net profit doubled to Rs 7,286.8 crore and Rs 862.7 crore respectively between FY17 and FY19. In the nine months to December 2019, net profit crossed the FY19 level to reach Rs 1,161.2 crore while revenue was Rs 7,240.1 crore. Its return on equity (RoE) has remained above 28 per cent since FY17.

SBI Card snip 1

Competition from prepaid instruments such as e-wallets and UPI service is rising though they are mainly used for small transactions and do not offer credit period or benefit of reward points unlike credit cards. In addition, SBI Cards has adopted technologies to offer virtual cards on various mobile platforms thereby improving its appeal to tech savvy young generation.

Economic slowdown affecting discretionary spend is another major risk. However, so far, the company has not experienced any slowdown in either card issuance or card spending.

Considering the equity after IPO and annualising the net profit in the nine-month to December 2019, the company demands price-earnings multiple (P/E) of nearly 46. It has no listed peers in India. A look at more mature markets such as the US reveals that American Express, which derives over half of the revenue from consumer services including credit cards, trades at a trailing P/E of around 17 with RoE of nearly 30 per cent. Another US company Capital One, which earns nearly two-third revenue from the card business, trades at a P/E of 9.2 and has an RoE of 10 per cent.

While SBI Cards’ valuation looks aggressive, it reflects the faster growth in the Indian market as well as the company’s growth momentum.

Source: Ipo Search Results

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Inari Medical Seeks Commercialization Capital In U.S. IPO

Quick Take

Inari Medical (NARI) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The firm develops and markets medical devices to treat patients with venous conditions.

NARI is growing rapidly and nearing breakeven. I’ll provide an update when we learn more about pricing and valuation from management.

Company & Technology

Irvine, California-based Inari was founded to develop two catheter-based thrombectomy FDA-approved devices to treat patients with deep vein thrombosis and pulmonary embolism.

Management is headed by President and CEO William Hoffman, who has been with the firm since 2015 and was previously CEO of Visualase, an MRI-guided laser company acquired by Medtronic.

Below is a brief overview video of Inari’s ClotTriever system:

Source: Inari Medical

The company’s primary offerings include:

Inari has received at least $54 million from investors including U.S. Venture Partners, Cooperatieve Gilde Healthcare, Versant Ventures, Milder Community Property Trust, and CVF.

Customer Acquisition

The company introduces its products to relevant practicing physicians through a dedicated, direct sales force of 63 reps as of December 31, 2019 and continues to add sales personnel.

Selling, G&A expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:

Selling, G&A

Expenses vs. Revenue







Source: Company registration statement

The selling, G&A efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of selling, G&A spend, was 1.2x in the most recent reporting period.

Market & Competition

According to a 2016 market research report by MarketsandMarkets, the global market for thrombectomy devices is expected to reach $1.45 billion by 2022.

This represents a forecast CAGR of 6.7% from 2017 to 2022.

The main drivers for this expected growth are a growing number of minimally invasive procedures, an increasing target patient population, ample medical reimbursements and continuing technological innovation.

Major competitive vendors include:

  • Stryker (SYK

  • Medtronic (MDT)

  • AngioDynamics

  • Boston Scientific (BSX)

  • Johnson & Johnson (JNJ)

  • Terumo Corporation (OTCPK:TRUMF)

  • Penumbra (PEN)

  • Spectranetics

  • Edwards Lifesciences (EW)

  • Argon Medical Devices

  • Teleflex (TFX)

Financial Performance

Inari’s recent financial results can be summarized as follows:

  • Dramatic growth in topline revenue

  • Similarly high growth in gross profit

  • High and increasing gross margin

  • Swing to operating profit

  • Swing to negative cash flow from operations

Below are relevant financial metrics derived from the firm’s registration statement:

Total Revenue


Total Revenue

% Variance vs. Prior


$ 51,129,000



$ 6,829,000

Gross Profit (Loss)


Gross Profit (Loss)

% Variance vs. Prior


$ 45,218,000



$ 5,548,000

Gross Margin


Gross Margin





Operating Profit (Loss)


Operating Profit (Loss)

Operating Margin


$ 801,000



$ (9,139,000)


Net Income (Loss)


Net Income (Loss)


$ (1,192,000)


$ (10,153,000)

Cash Flow From Operations


Cash Flow From Operations


$ (4,935,902)


$ 10,892,115

Source: Company registration statement

As of December 31, 2019, Inari had $23.6 million in cash and $29.5 million in total liabilities.

Free cash flow during the twelve months ended December 31, 2019, was a negative ($8.1 million).

IPO Details

Inari intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

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

to expand our commercial activities, including marketing personnel and programs; to fund product development, research activities, and clinical development activities; and the remainder for working capital and general corporate purposes.

Management’s presentation of the company roadshow is not yet available.

Listed bookrunners of the IPO are BofA Securities, Morgan Stanley, Canaccord Genuity and Wells Fargo Securities.


Inari is seeking U.S. capital market funding to further commercialize its approved devices and continue research for development of new venous treatment devices.

The company’s financials show a firm that is growing revenue and gross profit rapidly and is just passing through operating breakeven.

Selling, G&A expenses as a percentage of total revenue have dropped significantly as sales have ramped; its sales & marketing efficiency rate is a still reasonable 1.2x.

The market opportunity for thrombectomy devices is moderately large but features significant competition.

The fact that NARI has grown so quickly in a crowded market means they have taken market share from some of the other players, so that is a positive sign.

Management’s valuation assumptions will be an important aspect of the desirability of the IPO.

I’ll provide a final opinion when we learn more details from management.

Expected IPO Pricing Date: To be announced.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any 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.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Source: Ipo Search Results

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Is investing in an initial public offering (IPO) right for me?

There are a number of rumoured UK initial public offerings (IPOs) planned for 2020 and beyond. Darktrace, a cybersecurity startup, let its investors know last year that an IPO was its goal. Film buffs might like the idea of acquiring shares in Vue Cinemas and its 200 screen worldwide if it goes public. McLaren’s CEO has expressed a desire to take the company public.

Being among the first shareholders in a hot, newly public company and potentially making a mint has an undeniable allure. Some IPOs have indeed made shareholders incredibly wealthy, but many others have left investors with nothing. On average, IPO investors could have probably done better.

What Jay R. Ritter found in his study of 1,526 IPOs from 1975 to 1984 was that a strategy of investing at the end of the first day of trading and holding for three years was inferior to investing in matching firms that were already listed. The IPO investors ended up with 83p relative to each £1 invested in the comparable firms.

Ritter identified over-optimism in the prospects of the debutant firms as the chief cause of the underperformance in IPO investing, particularly when there are many IPOs happening in the latest hot topic – think companies at the turn of the millennium, or ride-hailing apps now. Investors end up paying too high a price.

Maybe it’s the fear of missing out on the next big thing that makes any price seem like the right price for IPO investors, or perhaps it’s because the price was never right to begin with.

Making it public

There are more rules and requirements to comply with as a public company compared to a private one, and more people to keep happy. So, why would a company go public?

Access to public markets for capital to expand is a good reason. Introducing the company to new customers through the publicity of the IPO process and a listing on an exchange is another.

New rules for IPOs were established in July 2018. Potential investors now get to see an FCA-approved prospectus before any research from banks that are involved in the actual IPO. Those banks also have to allow unconnected researchers the same level of access to information that their in-house research teams get.

Investors need to be cynical when reviewing material published by the company and its backers. Naturally, the company will present as rosy a picture of its prospects as possible because it wants to sell for as much as possible. Well-informed independent research will provide balance, but investors still need to do their homework.

Perhaps a private equity firm has squeezed every last drop out of the company’s margins and wants to cash in now. Only careful scrutiny of the financial performance might reveal darker motivations for going public. Keep in mind that companies going for IPOs are typically younger and have short track records.

Are IPOs right for me?

Investing in IPOs is riskier than investing in the market in general. An investor looking for growth would probably be better off investing in existing growth companies. For income investors, IPO investing will rarely make sense.

Any amounts committed to IPOs should be small, and you should be able to lose your stake without it affecting your long-term investing goals.

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James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Source: Initial Public Offering Search Results

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BRIEF-Polypid Says Co Intends to Submit Confidential Draft Registration Statement For Proposed U.S. IPO

Feb 23 (Reuters) – PolyPid Ltd:



Source: Ipo Search Results