Biome Technologies PLC (AIM:BIOM) shares were slashed in half on Friday following a deeply discounted equity round.
The bioplastics and radio frequency technology business plans to raise £950,000 through the issuance of 19 million shares at 5p each. This represents a 76.7% discount to Thursday’s mid-market closing price.
Biome also announced an £80,000 retail offer to existing shareholdings via the REX retail platform.
Biome warned that it “would only have sufficient cash to fund its activities through to the middle of September 2024” if shareholders refuse to approve the funding rounds, adding that “the directors believe that there are currently no alternate sources of funding available in the necessary time scale”.
Management added that its debt would substantially reduced following the fundraising efforts.
Elsewise, Biome “would accordingly have to place the company into a members' voluntary liquidation (which is a solvent liquidation procedure) to enable payment of all creditors of the company in full”.
In a first-half trading update, Biome said its revenues fell to £2.3 million from £3.6 million in the first half of 2023.
This was due to “continued production and regulatory difficulties at two of the Bioplastics division's end-customers and the second-half phasing of revenue from the four significant RF division projects, currently undergoing design and build”.
Shares in the group fell to 14.5p on Friday.