Intercede Group Plc (LON:IGP) has raised £5mln of new capital to bridge the gap amid order delays.
The Internet of Things group has today followed up a September profit warning by telling investors that it is unlikely that it will generate sufficient cash, in the year to March 2017, to support a necessary rate of investment.
Today’s fundraise therefore is needed if the group is to advantage of the large market opportunity, Intercede said.
Cash proceeds are earmarked for the ongoing development of mobile security apps (for iOS, Android, Windows and BlackBerry), as well as establishing the MyTAM cloud-based service and the group’s MyID platform.
Money will also go to the group’s sales and marketing efforts.
Intercede has conditionally raised the new capital through an issue of convertible loan notes as well as new shares – comprising £4.495mln of notes, and 877,192 shares priced at 57p each.
In a separate statement Intercede revealed that revenues for the six months to September 30 were down 49% to £2.8mln (last year’s comparative was £5.5mln), while operating expenses rose to £6.4mln from £5.7mln in the first half of last year.
It reported an operating loss of £3.7mln for the first half, while the net loss was marked at £2.8mln.
Intercede had £1.4mln of cash at the end of the half, albeit the balance increased to £2.6mln by the end of November.
"The reduction in revenues in the first half of the financial year should not mask the scale of the market opportunity which we are positioned to exploit,” said chief executive Richard Parris.
He added: “We remain confident that the deferred orders which have affected the first half of the year will soon come to fruition and the outlook for the full year is in line with expectations.”