Pacific Edge's after-tax losses for the full year to March widened from $9.38 million to $10.5million and its cash in hand from earlier capital raising plunged more than 60%, from $20.4 million a year ago to $7.81 million.
Pacific Edge chief executive David Darling said the capital raising would be used to focus on increasing US marketing and sales and potential user contracts and in developing partnerships in Southeast Asia, as part of the expanding ''medical tourism'' market.
Under the offer, shareholders can subscribe for two new shares for every 11 currently held, for 61c.
The shareholders can sell those rights on the stock exchange or decide not to take up the offer.
Pacific Edge shares were down 6c to 66c, after the announcement.
Craigs Investment Partners broker Peter McIntyre said the $35.3 million capital raising should keep Pacific Edge going for two years.
''They are investing heavily into their product and business model, trying to create returns,'' he said.
However, given Pacific Edge spent $14.8 million during the past year and created revenue of just $1.9 million, it was ''crucial from here on in'' to get sales to the point where they exceeded costs, in order to maintain investor confidence.
Forsyth Barr broker Suzanne Kinnaird said while the capital raising at first ''appears large'', it would provide Pacific Edge with greater flexibility while still in its early stages.
''At this stage in its life cycle we are less focused on numbers and more on the outlook commentary,'' Ms Kinnaird said.
In underlining the importance of the US market, Mr Darling said there were 40 urologists in New Zealand, 260 in Australia and more than 10,500 in the US.
Pacific Edge already has contracts with several major health organisations - FedMed, ACPN, Stratose and MultiPlan - amounting to coverage of millions of Americans.
However, the emphasis this year is the outcome of 2000 test-validation studies, with potential access to 10,000 tests with one Californian organisation, and also the Veterans Association (VA), the latter with 25 million lives under cover.
To access the VA, Pacific Edge is in the process of gaining access to the Federal Supply Schedule.
''The revenue potential in this [US] market is immense and it is our primary focus for growth,'' Mr Darling said.
The first US patient tests are due to begin at Pacific Edge's purpose-built laboratory in Pennsylvania next month.
When asked about the rate of cash burn in the past year, of $12.6 million, Mr Darling said it was ''highly expected'' and handled under the company's ''tight budgetary processes''.
Pacific Edge is now beginning its third financial year, since it announced it wants to have revenue of $100 million within five full financial years.
Mr Darling stood by that statement, and depending on the outcome of US and Southeast Asian developments, hinted there could be a positive revision in the future.
He was unable to predict a break-even point for the 13-year-old company, whose consecutive losses amount to about $55 million, highlighting instead the ''large potential'', in numerous contracts which could run from 10,000 to more than 100,000 annual test samples being handled by Pacific Edge.
He said Singapore alone had 330,000 medical tourists last year, growing to 900,000 and expected to be 1.34 million by 2018, plus other places such as Taipei, Hong Kong and Bangkok, the latter having 570,000 medical tourists.
Southeast Asia in general was an ''opportunity rich'' market.
Singaporean samples could be delivered to the Dunedin lab in a 3.5-day result turnaround, which required very little further infrastructure investment.
• Earlier this week, Pacific Edge was censured by the Financial Markets Authority for not disclosing information in the US in a timely manner, prompting a $500,000 compensation payment, potentially for up to 170 investors who sold stock during two periods of belated disclosure, in October 2013.
Capital raising
Pacific Edge seeking $35 million to. -
• Expand US sales force from 12 to 18 people to service 19 major metro areas.
• Complete Southeast Asia evaluation; if favourable, launch initial operations in Singapore.
• Finish commercialisation of third and fourth Cx-bladder diagnostic tests; Monitor and Predict.
