Pacific Edge, the listed cancer diagnostics company, is planning a $35.3 million renounceable rights offer at a 6.2 per cent discount to fund its US growth strategy, potentially launch into Singapore as a gateway to South East Asia, and complete commercialisation of its third and fourth Cxbladder tests.
Under the offer, shareholders can subscribe for two new shares for every 11 held as at June 9 for 61 cents apiece. Pacific Edge shares last traded at 65 cents, down nearly 23 per cent this year.
The offer, which opens on June 12 and closes on June 29, will be underwritten by First New Zealand Capital which gets a 1.5 per cent share of the total proceeds as an underwriting fee and a lead management fee. The new shares will be allotted on July 6.
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Chairman Chris Swann said the company was at "an exciting stage" as its grows commercial revenue in the US, expands its product portfolio and looks at other target markets.
Pacific Edge reported $1.9 million of sales and a loss of $10.7 million for the year ended March 31, most of which resulted from investment in staff and product development, and ramping up its US sales and marketing team.
As at March 31, the company had cash resources of $7.8 million and Swann said the funds raised would also help strengthen the Dunedin-based company's balance sheet.
Pacific Edge's cash outflows in relation to US growth are estimated to be $3.7 million in the year ending March 31 2016 and $4.2 million the following year, according to the offer documents.
Evaluating entry and potentially launching in Singapore is estimated to cost $700,000 in the 2016 financial year and $3.1 million in 2017. Cash outflows to complete the next two diagnostic tests, Cxbladder Monitor and Cxbladder Predict, are estimated at $1.1 million in the 2016 year and $1.3 million the following year.
Last month the Financial Markets Authority issued a warning to Pacific Edge for breaching continuous disclosure rules in relation to the delayed announcements of two significant US deals with National Provider Networks in 2013.
Under a settlement reached with FMA, Pacific Edge agreed to pay $500,000 in compensation to shareholders who sold its shares during the period of delay between signing of the agreements and the announcement to the NZX.