The provider of innovative monitoring and diagnostic devices for critical care is proposing to place 75mln shares at 16p to new and existing investors.
Woodford Investment Management, the fund management firm set up by famed stock picker Neil Woodford, has already indicated an interest in taking up £4mln of shares, as has the Wales Fund, as part of an agreement for Sphere to move its manufacturing operations to the principality in a phased approach when it scales-up its manufacturing capability.
The amount raised could rise to £13.2mln depending on the response to an open offer, also at 16p a share, which is being pitched at its existing shareholders.
Sphere’s shares closed at 19.34p on Thursday, so the offer price represents a 3.34p discount to the current mid-market price of Sphere.
“Today's announcement of the proposed placing and open offer will provide the company with the financial resources to deliver near-term operational and commercial value drivers, which I am confident will create substantial value for our shareholders," said Dr Wolfgang Rencken, chief executive of the Proxima device maker.
The company revealed in its results statement that it had £3.7mln in cash and short-term investments at the end of 2014, down from £9.3mln the year before.
"We made significant progress in 2014, transforming Sphere Medical from a research and development orientated company into a commercially-focused medical devices business,” Dr Rencken said.
As might be expected of an early stage company, Sphere is currently loss-making; its loss before tax deepened a shade in 2014 to £5.87mln from £5.52mln on nominal revenues.
The focus in 2015 will be on driving sales of Proxima 3 within the UK and into Germany, Netherlands and Belgium.
On the product development front, the company intends to complete the development of Proxima 4, which will lay the foundations for its forthcoming negotiations to secure a commercial deal with a strong international partner.
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