MGC Pharma extends working capital runway with $1.25 million raise
Health & Biotech
Health & Biotech
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MGC Pharmaceuticals has conditionally raised £0.65 million ($1.24 million) via a placement and subscription at 0.12 pence (0.23 cents) per share to provide a nice working capital runway for its short-term financing obligations.
This price represents a 57% discount from the closing price of 0.28 pence per ordinary share on 12 July 2023 on the LSE, and a 62% discount to the closing price of 0.6 cents on the ASX.
The company has also raised £50,000 ($95,000) from CEO and MD Roby Zomer pursuant to a convertible loan agreement which allows Zomer to provide an investment without requiring advanced shareholder approval – which would otherwise be required for a direct subscription.
Certain members of the management team are also subscribing for ordinary shares directly with the company as part of the subscription.
The fundraising is intended to bridge MGC Pharmaceuticals’ (ASX:MXC) current general working capital requirements and will provide a runway of working capital for its short-term financing obligations as it builds its market footprint in the UK.
The company’s management is also exploring additional cost reduction measures that could increase the working capital runway provided by the fundraising.
“The directors are assessing a number of potential funding options which would provide additional funds to the company,” MGC said.
“The directors consider that these funding discussions are progressing well and are reasonably confident that a funding solution will be forthcoming, however there is no certainty that the company will be able to raise any additional funding.”
In addition, the company has agreed to issue one free attaching option, exercisable at 0.12 pence (0.23 cents) for every fundraising share subscribed for and issued under the placing and subscription.
Oberon Investments Ltd is acting as broker for the placing.
This article was developed in collaboration with MGC Pharmaceuticals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.