Cash-strapped Dunedin bio-tech company Blis Technologies wants to raise millions of dollars in a third capital raising, offering a share purchase plan to shareholders and also a private placement of more than 96 million ordinary shares.
Blis signalled the capital raisings earlier in the month, when updating the market that its forecast annual losses for the current financial year are expected to swell from the earlier guidance of $800,000 to $1.3 million, for its full-year trading ending next March.
A common theme of market updates has featured Blis having to overcome regulatory hurdles in target markets and interruptions to distribution and marketing campaigns.
While Blis has made inroads into getting its product distributed to markets beyond New Zealand, in Australia, Asia and Europe, it has had to defer a China launch and recently suspended promotion and sales in the United States.
During the past decade Blis has developed a range of oral probiotics for sore throats, bad breath and to boost health after taking antibiotics. It booked its largest annual loss of $1.7 million for the trading year to March 2012, on revenue of $1.46 million, with eight consecutive losses now totalling $8 million.
Blis chairman Peter Fennessy yesterday said the share purchase plan was for eligible New Zealand-based shareholders, who could apply for ordinary shares valued up to $15,000 per shareholder. Up to 96,375,927 shares were on offer in the private placement to institutions. Both tranches were offered at 0.007c per share.
Blis raised $3 million in 2010, then a further $1.6 million in a similar share purchase plan and placement in September 2011.
Craigs Investment Partners broker Peter McIntyre said the private placement could raise $674,631 and, in theory, if every one of the 2526 shareholders purchased the maximum $15,000 from the share purchase plan, that would raise almost $38 million.
"It's going to be anyone's guess what the shareholder uptake will be. I'd estimate that realistically they will want to raise $2 million to try and refocus the business again," Mr McIntyre said.
While Blis shares had hit a high of 5c during the past year, giving a market capitalisation of $9.19 million, the slumped share price now at 0.007c reflects a $3.85 million capitalisation, based on the 482 million shares on issue.
Mr McIntyre said the private placement alone equated to 20% of the current shares on issue and was likely to have a negative effect on share value.
"It has been very hard for Blis, considering their share price was once at 5c," he said.
Blis also told shareholders earlier this month that a further capital-raising from a pro rata issue "would likely be required" in 2014.
