Shares of Manchester-based molecular diagnostics firm Yourgene Health plc fell about 14% on Wednesday as the firm reported that its interim loss widened amid anticipation that revenue in financial year 2023 will fall sharply.

Yourgene also said it plans to raise up to £6 million through the issue of 1.67 billion new shares priced at 0.30 pence each — a discount of 83.8% to Yourgene’s closing share price of 1.85p on Tuesday, the last business day before the announcement.

The capital raising shares, assuming full take-up of a retail offer, would represent 275.1 % of the existing issued share capital of the company and 73.3% of the share capital as enlarged for such new issuance.

Yourgene shares have fallen almost 90% in the past year to around 1.6p, giving the firm a stock market value of about £12 million.

Pretax loss in the six months to September 30 increased to £6.2 million from £306,000 a year prior. Revenue fell 45% to £9.6 million from £17.5 million.

The company expects financial year 2023 revenue of around £18 million to £20 million, at least 47% lower than £37.6 million in financial year 2022.

Further, in financial 2023 it expects to turn to an adjusted loss before interest, tax, depreciation and amortisation of £3.5 million to £4.5 million before exceptional items versus an adjusted EBITDA of £3.4 million in financial 2022.

The capital raising includes a placing of at least 1.28 billion new shares at the issue price, raising a minimum of £3.9 million. In addition, some Yourgene directors plan to subscribe to 383.3 million new shares at the issue price.

Yourgene also intends to carry out a separate offer of up to 333.3 million new shares to raise a further £1.0 million. The company noted that it plans to use the proceeds to provide near-term working capital and facilitate further restructuring of the company’s cost base, removing £2.0 million of annual operating expenditure.

Yourgene added that it will use any additional proceeds to fund regulatory approvals and existing product enhancements.

Singer Capital Markets Securities Ltd is acting as sole bookrunner and sole broker in connection with the placing. Cairn Financial Advisers LLP is acting as nominated adviser to Yourgene in connection with the admissions.

The capital raising is not being underwritten.

The company added: “Cash levels continue to be carefully managed and on current burn rates additional capital injections will be required to navigate the business to a self-sustaining cash position.

“The company is pursuing multiple avenues to ensure the availability of funding to enable it to pursue its strategic plan.”

Reporter: Tom Budszus

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