Biolidics’ private placement at S$0.0121 apiece to raise one-eighth of market cap

MEDTECH company Biolidics : 8YY 0% entered a subscription agreement with Chinese citizen Zhou Chao to issue and allot 83 million new shares at S$0.0121 per share on Friday (Dec 22).

The issue price implies a 9.7 per cent discount to the volume-weighted average price of S$0.0134 for trades done on Thursday.

As at Friday, gross proceeds of S$1 million from the private placement represent about one-eighth of the company’s market capitalisation of S$8.6 million. The 83 million new shares represent about 12.6 per cent of the issued share capital on the day.

Upon completion of the proposed subscription, the new shares will represent 11.2 per cent of the enlarged issued share capital.

The subscriber, Zhou, is the director and co-founder of ACV Tech, a Singapore-based company trading semiconductor foundry equipment, said Biolidics. It noted that Zhou entered the agreement “purely for financial investment purposes”.

Biolidics has been troubled with negative working capital. For the nine-month financial period ended Sep 30 of the current financial year, the group recorded a net loss of about S$1.6 million and a net operating cash outflow of approximately S$1.5 million.

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The board noted that after deducting estimated expenses, the remaining S$930,000 of the proceeds will be used as working capital to improve the company’s cash flow, “to achieve continued trading status on Catalist and deliver shareholder value”.

Assuming the proposed subscription was completed on Dec 31, 2022, Biolidics’ net tangible liabilities per share would be reduced by 61.5 per cent. Its loss per share would be S$0.0127, down from S$0.0143.

On Nov 21, the company issued 98.5 million new shares at S$0.0119 apiece to raise S$1.2 million from Zhu Hua, a Chinese national who owns 99.9 per cent of China-based investment management company Zhenghe Antai Investment Management. The company had then fully repaid the debt owing to Clearbridge BSA on Nov 30.

Shares of Biolidics : 8YY 0%closed 7.1 per cent or S$0.001 lower at S$0.013 on Thursday.