LONDON (Alliance News) - Sphere Medical Holding PLC late Monday said it is planning to raise up to GBP13.2 million before expenses in a placing and open offer, with the proceeds earmarked for a range of activities.
The money raised will be used for "marketing and selling Proxima 3 in the UK, the Netherlands, Belgium and Germany, completing the development of Proxima 4, obtaining the CE Marking and launching Proxima 4 for sale in Europe, increasing production capacity and improving operations".
In addition, the fundraising will also help to bolster the company's balance sheet "ahead of discussions with potential partners".
Proxima is an arterial blood gas analyser.
The medical device company wants to raise about GBP12 million through a placing of 75 million new shares at 16 pence each with new and existing investors. It also will look to raise up to GBP1.2 million through a one-for-eight share open offer of 7.4 million shares to shareholders at the same price. Shareholders will vote on the move at the end of April.
The company said that Woodford Investment Management, founded by Neil Woodford, intends to invest up to GBP4 million in the placing, while the Wales Fund, which is managed by Arthurian, has given a conditional commitment to invest GBP4 million.
As a condition of the GBP4 million commitment made by the Wales Fund, Sphere Medical said it has agreed to "implement a phased approach to moving its manufacturing operations to Wales commensurate with the planned scale-up of those operations and to establish a corporate office in Wales".
"We have focussed our efforts on launching Proxima 3 into the market and in building a commercial team to drive commercial sales. In March of this year we launched Proxima 3 into Europe where we intend to initially focus our sales efforts on the German, Netherlands and Belgium markets. Proxima continues to be endorsed as a medical device that addresses the unmet market need for frequent blood gas measurements for clinically unstable patients. At the same time we have continued with the development of Proxima 4," Wolfgang Rencken, chief executive, said in a statement.
News of the fundraising was disclosed as the company said its pretax loss widened to GBP5.9 million in 2014 from GBP5.5 million in 2013. The company's revenue remained insignificant, falling to GBP14,000 from GBP40,000, while operating expenses rose to GBP5.9 million from GBP5.7 million as higher expenses associated with administration, selling and marketing, and product realisation more than offset a fall in product development costs.
Sphere Medical shares closed down 0.8% at 19.34 pence on Monday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.