Deepmatter Group (LON: DMTR) has managed to secure £2.55m of funding ahead of the Christmas break. However, the placing price is 0.1p and the share price fell by 0.225p to 0.4p, having been 1.05p ahead of the announcement that the AIM-quoted digital chemistry data company needed money.
The positive thing is that existing shareholders are being given the chance to invest at the same price via a one-for-3.7 open offer that could raise up to £250,000. The shares go ex-open offer entitlement on 4 January and the open offer closes on 18 January. The details will be sent to shareholders in the New Year.
The cash is coming from existing institutional shareholders and professional individuals. The huge discount to the market price was required to attract these investors to the issue. Deepmatter should have enough funds to last until the end of 2022 but might have to raise more cash before that. The company will require more cash at some point, but it could be in a better commercial position by then.
Future
Deepmatter is still in discussions with South Korea-based drug discovery company Standigm Inc, but the deal will not be done this year, so 2021 revenues will be lower than the company’s previous expectations. The multi-year deal could be signed in 2022.
Deepmatter will use the time it has thanks to the additional cash to assess strategy and invest in the further development of the DigitalGlassware technology. Revenues are still relatively low and need to be much higher in order to stem losses.
Existing investors, that still believe in the underlying value of the business, should take up the open offer shares.