Trading in the shares of the company was suspended at the end of June pending funding news and now it looks as though the money is set to arrive, along with some changes at board level.
The company is proposing to place at least 104.88mln shares at 2p a pop – the shares were suspended at 6.75p – to raise at least £2.1mln.
This will be supplemented by £1.2mln raised through a share subscription, while eligible shareholders will be given the opportunity to subscribe for new shares through an open offer, to raise in aggregate up to £1.0mln before expenses.
The funds raised will be used to finance the commercial development of the company's portfolio of core products and for general working capital purposes as it seeks to grow revenues of its core products.
The axis of the company is switching to the USA
Assuming the fund-raising all goes to plan, John Shaw, who has agreed to subscribe for new shares, will be appointed as the chief executive officer, succeeding Kevin Matthews, who will become executive chairman until the end of 2018.
Shaw is currently the president of the company's wholly-owned US subsidiary, Itaconix Corporation, and was one of the two co-founders of Itaconix Corporation. He will be located in New Hampshire, USA.
Bryan Dobson, who was the non-executive chairman, will become an independent non-executive director while Robin Cridland will be stepping down as the chief financial officer (CFO) once the fund-raising is done and dusted. The company, which is switching the centre of operations to the US as part of a cost-cutting initiative, intends to appoint a US-focused CFO in due course.
Non-cash charges affect the bottom line
The company released results for 2017 that showed the loss before tax widened to £11.87mln from £5.64mln in 2017, largely as a result of a non-cash charge of £6.48mln relating to the acquisition of Itaconix Corporation.
Revenue grew more slowly than expected to £553,000 from £285,000 the year before.
The board believes that the group is well-positioned to deliver significant revenue and profit growth in the medium to longer term but admitted that this will be delivered over a longer period of time than previously envisaged.
At the end of the reporting period, the company had cash, cash equivalents and short-term deposits of £3.61mln, down from £8.79mln the year before. Without the injection of funds from the share issue, the company said it would not have sufficient funds to continue as a going concern for a period of 12 months.
The company has already taken steps to reduce costs, including the consolidation of the UK activities of the business into the US base and the manufacturing facility in New Hampshire,USA.
Trading in the company's shares remains suspended.