The Impedimed Limited (ASX: IPD) share price has come out of a trading halt today to backtrack mid-afternoon. This comes after the medical technology company provided an update on its recent equity raise.
At the time of writing, Impedimed shares are swapping hands for 16.5 cents, down 2.94%.
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Impedimed completes placement
One catalyst for today's fall in the Impedimed share price could be investor concerns over an impending share dilution.
According to its release, Impedimed announced it has received firm commitments for its institutional placement to raise $35 million before costs. The company highlighted that it had strong support from existing and new institutional and sophisticated investors.
The offer will see approximately 229.5 million new ordinary shares issued at a price of 15.25 cents apiece. This represents a 10.3% discount to the last closing price of 17 cents on 22 October (before going into a trading halt).
Impedimed will use the proceeds to support an array of strategic initiatives to address growth. In particular, it will allocate the fund to:
- Product enhancement of the SOZO II digital health platform, including weight scales and improved electronics for renal and heart failure
- Data and software enhancements including corporate account development such as electronic health record integration and heart failure programs
- Development and commercialisation of renal failure application, including end stage renal disease clinical trial and US FDA clearance
- General working capital to achieve breakeven, including advance inventory purchases to assist in the transition to SOZO II
In addition, Impedimed will launch a non-underwritten share purchase plan (SPP) of $5 million which it will offer to eligible investors. The terms will be the same as the institutional placement.
The SPP closes on 11 November, with the issuance of the new shares set for 18 November.
Management commentary
Impedimed managing director and CEO, Richard Carreon, said:
We are very encouraged by the level of support investors have shown as we look to capitalise on the significant opportunity with the recently released PREVENT Trial results. Following the completion of the capital raising, we are now in a fully funded position to accelerate sales in Oncology, while still investing in our other key focus areas of Renal Failure and Heart Failure.
About the Impedimed share price
Despite today's falls, Impedimed shares have gained around 90% in the past 12 months. However, the company's share price is around 15% off its 52-week high of 19 cents reached on 19 October.
Based on valuation grounds, Impedimed presides a market capitalisation of around $247 million, with almost 1.5 billion shares outstanding.
