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Provexis is raising £2.5m to finance its new product pipeline.
The cash is being raised at 0.65p a share. That is a big discount to the functional foods developer’s market price of 0.97p, down 0.005p on the day. Provexis directors are subscribing for 16.7m shares.
Because the par value of the shares is 1p a share reorganisation will reduce that par value to 0.1p. A bridging loan of £50,000 will be provided to the company so it has short-term cash. Longer-term, Provexis believes it will generate revenues from licence deals.
DSM Venturing, which invests in nutrition, pharma and performance materials companies, will take a 29.3% stake. Krijn Rietveld will be DSM’s appointee on the Provexis board.
Fruitflow is a patented natural extract from tomato which can help reduce heart disease and strokes. This requires further investment as does a plantain-based treatment for Crohn’s Disease. Provexis is also looking at additional medical food technologies.
Revenues improved from £67,000 to £162,00 in the year to March 2008. The loss eas reduced from £1.55m to £1.15m. There was a cash outflow of more than £1.5m. Provexis had £533,000 in the bank at the end of March 2008.
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