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(Alliance News) - Vela Technologies PLC on Tuesday revealed a narrowed interim loss and plans to raise GBP1.3 million to partly pay for a GBP2.4 million investment in a potential Covid-19 treatment for diabetic patients.
Vela has acquired an economic interest in a late-stage Phase II therapeutic project to develop the potential treatment. The company noted the deal is through an agreement with St George Street Capital Ltd, whereby Vela has acquired an economic interest in the potential commercialisation of SGS's asset.
Under the terms of the agreement, SGS will pay Vela 8% of proceeds received by SGS in excess of GBP19.2 million.
Vela will pay GBP2.4 million to SGS, where GBP1.1 million will be satisfied by the issue of 1.10 billion new shares in Vela at 0.065 pence each.
The consideration shares will be subject to a lock-in agreement until the successful completion of Phase II of the trial, named Arcadia, or for a period of two months following completion of the Arcadia trial, should the outcome of the trials not meet the minimum threshold.
Vela also plans to raise GBP1.3 million through the placing of 1.92 billion shares at the same 0.065p price each.
Shares in the AIM-listed company with investments in early stage disruptive technology businesses were 14% higher in London on Tuesday at 0.073 pence each.
Vela Executive Director James Normand said: "Vela is pleased to have been invited to participate in such a prestigious and genuinely ground-breaking project as this and is delighted to invest alongside internationally respected stakeholders such as Professor Christopher Evans, UKRI and Mubadala.
"The board of Vela looks forward to providing shareholders with news on the outcome of these trials as this highly regarded team pursues its quest for a drug to provide a therapeutic treatment for the effects of Covid-19 on diabetic patients."
Turning to Vela's interim results, the pretax loss in the six months to September 30 narrowed to GBP63,000 from GBP258,000 a year before. This was after total administrative expenses fell to GBP63,000 from GBP258,000.
"The board is currently considering a number of investment opportunities in line with its existing investing policy and certain of these potential new investments are at an advanced stage of due diligence, documentation and completion. The board anticipates a lively second half of the financial year and announcements will be made by the company at the appropriate time," Vela added.
By Paul McGowan; paulmcgowan@alliancenews.com
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