This article was displayed on the ChosunBiz MoneyMove (MM) site at 5:41 p.m. on July 31, 2026.
KOSDAQ-listed EOFlow will buy back the core patents it sold last year by giving stock instead of cash. With its cash drained by a prolonged lawsuit, EOFlow will secure the patents needed to restart its business, while IPV is effectively betting on EOFlow's normalization of management and a share price recovery. It is a desperate measure aligned with both sides' interests, but some say the move could backfire if EOFlow fails to avoid delisting.
According to the Financial Supervisory Service's electronic disclosure system on the 1st, EOFlow is conducting a third-party allotment paid-in capital increase worth 26 billion won for IPV. The issue price is 6,000 won per share, with a total of 4,333,333 new shares to be issued.
Instead of paying cash for the subscription price of the new shares, IPV plans to contribute in kind the patents it bought from EOFlow last year. Once payment procedures are completed, EOFlow will retrieve the key patents needed for its business without separate cash expenditure.
When the paid-in capital increase is completed, IPV will become EOFlow's new No. 2 shareholder. Founder and CEO Kim Jae-jin, the former No. 2 shareholder, will fall to No. 3, weakening control. However, there is a view that this capital increase is equity dilution the cash-strapped company unavoidably accepted to recover essential patents.
Previously, EOFlow sold major patents to IPV for 8 billion won last year to raise funds for its lawsuit with U.S. medical device company Insulet. The contract included a repurchase clause allowing EOFlow to buy back the patents by paying 26 billion won within a set period. The structure allowed it to raise an emergency 8 billion won using the patents, and later shoulder an additional 18 billion won to get them back.
EOFlow had few options at the time. As the lawsuit with Insulet dragged on, normal business operations were disrupted, and legal expenses and operating fund burdens were rising. It needed to raise funds, even by handing over key patents, to continue the lawsuit.
The legal battle has recently turned in EOFlow's favor. Although EOFlow partially lost at first instance, the appeals court in May overturned the lower court and dismissed Insulet's claims. Based on the appeals ruling, EOFlow plans to restart its suspended business and push for management normalization.
The problem was that to fully normalize operations and regain technological competitiveness, it had to get back the core patents it sold, but it lacked the capacity to repurchase them in cash.
EOFlow's cash and cash equivalents had fallen to about 1 billion won as of the end of the first quarter this year. It was virtually impossible to pay IPV 26 billion won in cash and buy back the patents as initially contracted.
From IPV's perspective, if EOFlow failed to exercise the repurchase right, it would have to either keep holding the patents or dispose of them separately instead of receiving 26 billion won in cash. Even if IPV kept the patents, their utilization value and saleability could be limited if EOFlow failed to normalize its business. In the end, IPV chose to return the patents in exchange for EOFlow equity, directly investing in the company's turnaround potential.
EOFlow retrieves key patents without cash, and IPV can expect gains from a share price rise if EOFlow's corporate value recovers, making this, for now, a practical transaction for both sides.
An external appraisal agency valued EOFlow at 6,146 won per share. The 6,000-won new share issue price reflects a slight discount. The patents for in-kind contribution were also valued at about 34.2 billion won, but the parties set the contribution amount at 26 billion won considering deal terms and other factors. This is why it is difficult to conclude that the deal is disadvantageous to IPV based solely on the 1,490-won share price right before trading was suspended.
However, the success of this deal hinges on whether EOFlow can avoid delisting and actually normalize its business. EOFlow faces a delisting crisis after receiving disclaimers of opinion in the 2024 and 2025 audits. Trading in the stock was also halted at 1,490 won per share.
The price at which IPV will receive the new shares is about four times the stock price just before the suspension. If EOFlow maintains its listing and resumes operations, it can expect equity value above 6,000 won per share, but if delisting is confirmed, the liquidity and value of the new shares could fall sharply.
An EOFlow official said, "Repurchasing the patents with stock rather than cash means IPV is betting on EOFlow's growth potential," adding, "EOFlow hoped for 8,000 won as the paid-in capital increase issue price, but it was adjusted to 6,000 won during negotiations between the parties."