Volpara Health to raise A$18 mln to fund US, Asian expansion
By Rebecca Howard
April 30 (BusinessDesk) - ASX-listed Volpara Health Technologies is raising A$18 million through a placement to institutional investors and a share purchase plan to speed up growth in the US and fund the rollout of direct sales into Asia.
Wellington-based Volpara, which focuses on early detection of breast cancer using artificial intelligence, is raising A$15 million selling shares in a placement at 60 Australian cents apiece to institutional investors, a 13 percent discount to the last trading price before the shares were halted. It plans to raise another A$3 million from existing shareholders, who will be able to buy up to A$15,000 of shares at the same price.
The health-tech company's cash on hand will rise to A$21.8 million from A$4.6 million once the capital raising is completed, and comes after Volpara's operational cash outflow narrowed to NZ$7.7 million in the year ended March 31 from NZ$8.2 million a year earlier.
Volpara's earmarked some NZ$9 million to expand its US direct sales, marketing and customers teams to accelerate sales growth with a view to delivering 9 percent market share by the end of the 2019 financial year. An additional NZ$4 million will develop new features in an effort to boost the firm's fee per woman, while NZ$2 million will begin the rollout of direct sales into Asia, a rapidly growing market. That will leave the company with NZ$3 million of working capital.
The placement is expected to settle on May 4 while the share purchase plan will run from May 7 to May 25. The allotment will take place May 31.
Morgans Corporate and Bell Potter Securities have been appointed the joint lead managers.
Volpara said it's achieved regulatory clearances for Japan, Taiwan, Australia and South Korea. Part of the capital raise will be used to target private hospital chains, find the right distribution partners and ensure Volpara is in government-run trials as necessary, it said.
Separately the company said its cash position was NZ$4.8 million in the final quarter of the year to March and its receipts from customers reached NZ$3.07 million in the 12-month period, the first time they have surpassed NZ$3 million. It holds no debt.
"This has been our best sales quarter to date. We aimed high, setting ambitious milestones for the year, which we've met both in terms of ARR (annualised recurring revenue) and US market penetration, now at NZ$3.6 million and 3.2 percent respectively," said Volpara chief executive Ralph Highnam.