Observe Medical – Update on operational status after completion of the Rights Issue
Oslo, 18 January 2024: Reference is made to the stock exchange announcement published by Observe Medical ASA (the "Company" or "Observe Medical") on 12 December 2023 regarding the final results of the rights issue of minimum 69,230,770 new shares and maximum 211,538,461 new shares in the Company at a subscription price of NOK 0.26 per share (the "Rights Issue").
The Company aimed to raise between minimum NOK 18 million and maximum NOK 55 million in gross proceeds in the Rights Issue.
The total gross proceeds from the Rights Issue were NOK 35,670,322.48, of which NOK 21,525,405.98 was settled by way of cash payment and NOK 14,144,916.50 was settled by way of set-off against the shareholder loans (as further described in the minutes from the extraordinary general meeting held by the Company on 22 November 2023). The Rights Issue raised net cash proceeds of approximately NOK 16 million.
The Rights Issue was accordingly subscribed by approximately 65% of the maximum gross proceeds.
The use of the proceeds from the Rights Issue was described as follows in the prospectus for the Rights Issue:
- The minimum proceeds from the Rights Issue will cover the working capital needs in relation to the ramp up of production and sale of the Unometer Portfolio.
Any excess proceeds in the Rights Issue will be used for;
- General corporate purposes, including working capital needs in relation to continuous product development and ramp up of sales activities for Sippi and Biim ultrasound probe;
- To finance the next instalment of USD 0.5 million in connection with the Convatec Transaction; and
- Debt conversion of existing loans of up to NOK 20.1 million to reduce interest bearing debt and pledge in the Company’s assets.
Observe Medical is fully focused and committed to the ramp up of the production capacity and the continuous commercial progress for the Company's UnoMeter portfolio.
In a remarkably short span of time, the Company has achieved a production capacity equivalent to Convatec's historical levels for the UnoMeter 500 product, which is a testament to Observe Medical's rapid progress and dedication to meeting market demands. Furthermore, Observe Medical is actively engaged in ongoing initiatives aimed at accelerating production and successfully bringing the UnoMeter Safety Plus product to the market.
The UnoMeter portfolio is experiencing rapid commercial expansion, having secured orders from a total count of 18 countries. The favorable clinical evaluations contribute positively to the reputation of the UnoMeter products, demonstrating confidence in their continued success across diverse markets.
On the back-end of the introduction of the Unometer portfolio, Sippi is very strategic positioned and is planned to be introduced into the same, but also several additional, sales channels for an even broader distribution. There is a broad international demand for Sippi, which is a device replacing one of the last manual monitoring procedures in intensive care. The UnoMeter portfolio is an important step for Observe Medical to be established as a preferred supplier in the urine measurement segment. The continuous expansion of the distribution network is expected to create a unique market access channel also for Sippi® into the market.
For the Biim ultrasound probe, the Company is evaluating various strategic alternatives and monitoring the situation closely as the net proceeds from the Rights Issue where not sufficient to improve the working capital needs for the continued product development and ramp up of sales activities for the Biim ultrasound probe. Observe Medical has an agreement with Fresenius Medical Care with an aim to fully roll-out of the ultrasound probe in their approximately 3,000 dialysis clinics in the US. Until now a total of 265 Fresenius clinics have received Biim ultrasound probes.
Fresenius is now working with a KPI study to support a final investment decision for full scale implementation in their dialyses clinics. This process is more time-consuming than previously anticipated, and the Company is now in advanced discussions with Fresenius Medical Care about the next steps on the way to a final investment decision.
The Company will evaluate various strategic options for the Biim ultrasound probe based on among other the outcome of these discussions and the financial resources available to Observe Medical. Consequently, no assurance can at this stage be given that the Company will pursue continued product development and ramp up of sales activities for this product.
For further information about the Company, please contact:
Rune Nystad, CEO Observe Medical
Mobile: +47 916 24 683
E-mail: rune.nystad@observemedical.com
Per Arne Nygård, CFO Observe Medical
Mobile: +47 411 04 345
E-mail: perarne.nygard@observemedical.com
About Observe Medical
Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.
The Company seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly
in urine measurement, ultrasound, anesthesiology/ICUs, surgery and wound care, in combination with targeted M&A.
The Company is headquartered in Oslo, Norway, with additional offices in Narvik, Norway and Gothenburg, Sweden, and subsidiaries in Finland and the US. In
addition, Observe Medical has a direct sale organization in the Nordics and a distributor network internationally.
Further information is available at www.observemedical.com.