Real Good Food (LON:RGD) announced its intention to launch an Open Offer to raise up to £1 million in capital.

The Liverpool-based company revealed in a statement its intention to launch an Open Offer on Wednesday.

As a result, qualifying shareholders will be able to subscribe for new ordinary shares of 2p each in the capital of the Company at a price of 5p per Ordinary Share.

The food company, which markets cake decoration and baking goods, acquired Brighter Foods as part of a £9 million deal last year.

However, the company has undergone a series of capital raising exercises in the past year, as it continues to struggle to generate cash.

Back in January shares plummeted 40 per cent after the cake decoration company missed previous forecasts.

Real Good Food confirmed the finalisation of £8.2m in new financing arrangements with its three major shareholders back in May of this year.

As part of the agreement, NB and Omnicane will each contribute £3.3 million, with certain funds of Downing providing a minimum of £1.6 million. A further £500,000 may be forwarded at the discretion of Downing prior to September this year.

Hugh Cawley, Chief Executive of Real Good Food said of the latest decision:

“Having recently completed our new financing arrangements with the Company’s three major shareholders, the Board recognised the importance of enabling all shareholders to participate in the refinancing of the Company and is therefore intending to launch the Open Offer accordingly.”

Shares in Real Good Food trading -3.95 percent, as the market reacts to the latest company announcement.