Shares of Biome Technologies PLC (AIM: BIOM) were on the backfoot on Friday following a heavily discounted equity offering.
The bioplastics and radio frequency technology company aims to raise £950,000 by issuing 19 million shares at 5p each, a steep 76.7% discount to Thursday’s mid-market closing price.
Additionally, Biome announced an £80,000 retail offer for existing shareholders through the REX retail platform.
Biome warned that it “would only have sufficient cash to fund its activities through to mid-September 2024” if shareholders do not approve the funding rounds, noting that “the directors believe there are currently no alternative sources of funding available within the necessary time frame.”
Management also stated that its debt would be substantially reduced following the fundraising efforts.
Otherwise, Biome “would have to place the company into a members’ voluntary liquidation (a solvent liquidation procedure) to ensure full payment to all creditors.”
In a first-half trading update, Biome reported a decline in revenues to £2.3 million from £3.6 million in the first half of 2023, attributing this to “continued production and regulatory challenges at two of the Bioplastics division’s end-customers and the second-half phasing of revenue from four significant RF division projects currently in the design and build phase.”
Shares in the company opened trading at 7.80p on Friday from 21.50p previous closes on Thursday
