Respiri Limited (ASX: RSH), a healthcare company, provides new technologies that help people in managing asthma and detecting wheeze, COPD, and various respiratory diseases.
Today, the company has declared that it has been able to conduct a $3.2 million successful capital raising. The money is raised via a private placement to sophisticated and professional investors. Under the Placement, the company issued 40,000,000 new shares at a price of 8 cents per share (a 14% discount to the closing share price of 9.3 cents on 13 December 2018).
Fawkner Capital is the lead manager, and the placement is expected to settle by 21 December 2018. After the settlement of the new shares issued, the Company’s capital fully paid ordinary share structure will be 513,388,224 fully-paid ordinary shares.
The Shares will be issued using the Company’s Listing rule 7.1 and 7.1A capacity of 20,000,000 under each rule.
As per the yesterday’s announcement, the two strategic partners to the placement are Two Bulls with 5,000,000 securities and a total amount of investment of $400,000 and Grey Innovation with 6,250,000 securities and a total amount of investment of $500,000.
Grey Innovation is a Melbourne based technology company, engaged in the development of new technologies in health, security & safety and environment fields. Two Bulls is a boutique firm with offices in Melbourne, New York, and Berlin. It is engaged in the process of software development and providing digital and product strategy consulting to its clients.
Post the settlement of the placement, the company is planning to undertake a Share Purchase Plan (SPP) to which the existing shareholders will be eligible. The SPP will raise capital of $1,000,000. The record date for eligible existing shareholders to participate in the SPP will be 17 December 2018, and the remaining terms of the SPP will be finalized in due course.
The Company intends to use the proceeds from the Placement for the following:
- Completion of a safety and compliance testing of wheezo technology to obtain ISO13485 certification to meet relevant regulatory approval requirements for UK, Australia & Singapore
- Completion of development of the smart app for iOS and Android platforms with ‘Machine Learning’ capabilities at launch to support ‘Personal Asthma Coach’ claim and ‘Go to Market’ strategy – clinical studies and user testing program
- Conduct clinical validation studies in Australia and the UK with new generation wheezoTM breath sensor and smart app to gain medical community endorsement
- Complete the manufacturing transfer from Grey Innovation to SRX Global (contract manufacturer) to build an initial 130 units, which will be prioritized for regulatory approval and clinical studies as per the above
- Define the ‘Go to Market’ launch budgets per quantum of capital raised, with capital allocation to promotional activities and support programs with highest ROI underpinned by data and analytics
- Building off existing technology advancement in developing wheeze, accelerate development of ‘Overnight Monitor’ and ‘Stand Alone’ wheezo monitor devices with development partners
- Continue to review and strengthen Respiri’s multi-faceted Intellectual Property (“IP’) with anticipation of filing new patents/ IP, trademarks and copyright across all major geographies resulting from the completion of the wheezo technology 8. Costs associated with the Placement offer
Yesterday, the company also announced that it is well advanced in negotiations with a major China-based pharmaceutical company to enter into the Chinese market.
The securities of RSH were placed in a trading halt on 14 December 2018 because of the above announcements and commenced its regular trading from today. Currently, it is being traded at 9 cents (as at December 18, 2018, 2:35 PM AEST), down by 3.23% as compared to the previous close.
During the year, the share price has soared by almost 107%.
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