Home Fitness Product News Cellmid seeks to raise up to $3.8 million in rights issue to...

Cellmid seeks to raise up to $3.8 million in rights issue to fund Chinese distribution agreements for consumer health products

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Cellmid Ltd (ASX:CDY) is raising up to $3.8 million via a renounceable rights issue to fund its recently initiated Chinese distribution agreements, as well as explore additional product and market opportunities for its anti-ageing beauty technologies. Upon completion, the company will be well-funded with about $7.95 million in cash.  Details of the offer Under the offer, eligible shareholders will be offered two new shares for every five shares held as at 5.00pm (EST) on March 11, 2021. For every two new shares issued, investors will receive one free attaching new option, with an exercise price of $0.18 and a term of two years from the date of issue. Cellmid will apply for the new shares and new options to be quoted on the ASX. The rights issue price represents a discount of 26% to the company’s 30 day volume-weighted average price (VWAP) of 10.16 cents. This renounceable rights issue is open to all eligible shareholders who have a registered address within Australia or New Zealand, and who hold shares on the record date. The rights issue will close on March 26, 2021, unless extended, and eligible shareholders can apply for shortfall in excess of their entitlement. Shareholders can also trade their rights from Wednesday, March 10, 2021, until the close of trading on March 19, 2021. Partly underwritten Mahe Capital Pty Ltd advised on the issue and acts as lead manager and underwriter. The issue is partially underwritten to $3 million by Mahe. The underwritten amount of $3 million includes a sub-underwriting of $388,877.70 by non-executive director Dennis Eck. Eck is a resident of the US and as such, is not eligible to participate in the rights issue. The amount of his sub-underwriting represents that amount that he would have been entitled to, had he been resident in Australia. Eck has waived any right to a sub-underwriting fee. All other directors intend to participate. Well-funded On completion, the company will be well-funded with about $7.95 million cash, which will be used to increase sales of its consumer health products into China under its distribution agreements, broaden the product portfolio, and increase digital marketing activities with the view to grow subscriber numbers. It will also allow the company to pursue other markets for its anti-ageing consumer products. Cellmid’s anti-ageing haircare brands are being sold in Australia, Japan, the US, China, Germany and the UK under the brands evolis®, Jo-Ju® and Lexilis®. In addition to pursuing revenue growth from its existing markets, the company’s key objective is to achieve operational profitability for the full 2022 financial year by building a substantial direct-to-consumer business (e-commerce) and from growing revenue in China through existing distributors and new partnerships. Initial orders have recently been shipped under the distribution agreements with Chinese distributors Ourui Health Management Limited and Aeon International. Cellmid will continue to pursue other product and market opportunities for its own brands while exploring potential licensing of its anti-ageing technologies.

This content was originally published here.

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