(Alliance News) - Shares in Sensyne Health PLC took a sharp fall on Friday after announcing the signing of a non-binding term sheet with several shareholders for up to GBP12.4 million in funding, warning that the company will not be able to trade beyond February without the cash injection.
Shares in the Oxford-based healthcare technology fell 67% to 24.90 pence on Friday in London. The stock has taken an 80% drop in value over the past 12 months.
The structure of the funding will be a loan note, with the first tranche comprising GBP6.4 million, and a second tranche of GBP5 million, which is subject to mutual consent.
Back in November, Sensyne had launched a strategic review and formal sale process, which has come to the point where several parties are having detailed discussions with the company under the terms of non-disclosure agreements.
However, due to the Covid-19 pandemic, the company has suffered from significant headwinds, including contract delays, a change in priorities from customers and increased competition, it said.
Although Sensyne's business development pipeline has increase from 25 opportunities in October to 75, these factors have slowed the conversion process of the pipeline into commercial agreements, it explained.
Looking ahead, Sensyne said it expects up to GBP26 million of contract value could be recognised in its financial year ending April 30, but this remains dependent on customers actually signing the contracts.
The shareholder funding will go towards financing the company over the coming months as it looks to complete the formal sales process. Without the funding, Sensyne warned, it is unlikely that it will be able to continue to trade beyond early February.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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