Shareholders bolster Polartechnics' coffers
Friday, 07 March, 2003
Institutional shareholders in Polartechnics have tipped another $AUD3.63 million into the medical devices company, buoyed by the belief it is on the threshold of commercial viability.
The company was able to raise funds in a very tight market principally because of shareholders' faith that it has turned the corner from R&D to product sales, said managing director Victor Skladnev.
"We have three products in the marketplace after 10 years of development effort and we have a number of institutional investors who are very committed to us and excited that we are moving into a new phase."
Its three main products, TruScreen, MedicScan and SolarScan, are all beginning to generate sales in both the domestic and overseas markets.
Management believes the new share placement, together with Polartechnics' existing cash reserves of $5.7 million, can sustain the company until it reaches its target breakeven date of June 2004.
That assumes the company meets internal sales projections and the company is not ruling out taking on bank debt to meet any shortfall.
The placement, at a $1 per share, was made at a discount of about 18 cents to the company's current share price, which has slid about 40 per cent in the last six months.
Much of the funds raised by the placement will be pumped into customer education as part of Polartechnics' drive to develop markets and support sales and distribution of its products.
Polartechnics recently signed a distribution agreement for TruScan, a cervical screening device, with Deka, the medical arm of a leading Italian laser manufacturer.
It has also struck a $500,000 distribution deal in Ireland for its MedicScan medial imaging and monitoring system. It is selling the SolarScan skin lesion diagnostic system in its own right in Australia.
Originally formed in 1987, Polartechnics devices use optical and electrical techniques to measure the properties of cancerous and pre-cancerous tissues.
Until now, the company has avoided taking on debt as a means of raising money but that may change as it moves deeper into the manufacturing and production area, Skladnev said.
"As we ramp up production, we may run into inventory issues or production facilities which are the type of things that bank loans can address."
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