Pacific Edge's consecutive losses during the past 13 years have amounted to more than $50 million, and of more than $20 million raised more than a year ago, it has $7.81 million cash in hand.
Pacific Edge and cloud computing company Xero are not dissimilar, in that they are expanding into numerous global markets, but penetration into the United States remains the key to success.
To date, both companies' US expansion expenses far outweigh revenue gains.
For Pacific Edge, it is the more than 10,500 registered urologists who will decide on using its proven Cx bladder test; of which there are now four complementary, but separate tests, and for Xero, the potential is for tens of thousands of US businesses to sign up to its accounting software package.
Pacific Edge chief executive David Darling said when contacted the $35.3 million offer was enough for two years' operation, but ''with some left in the tin'' for any future product to be launched from its R&D pipeline; which would be a fifth product.
He said the New Zealand market in general had the appetite for investments with ''good opportunities'', highlighting that while the offer was fully underwritten, he expected Pacific Edge shareholders ''to step up to the plate''.
Mr Darling said it was still too early to be offering forecasts to the market on hitting a balance between expenses against revenue or breaking even.
On the question of having spent in excess of $50 million in R&D, Mr Darling said expenses had been driven lower by starting up with a small team in New Zealand, and developing a prototype laboratory, in Dunedin.
''We have used a fair amount of capital, but not as much as we would have [starting out] in the US,'' he said.
Mr Darling said the ''value component'' for shareholders to take up the offer lay in Pacific Edge's opportunities as it had two Cx bladder products launched, two to come and with three ''pre eminent customers'' to capture.
After this capital raising, he said he did not want to be going back to investors again.
He noted two potential customers, one being a corporate in California which could decide to take up Cx bladder, for immediate use across all its 9.5 million lives under cover.
Another was the Government funded Veterans Association, with 20.5 million lives under cover, but if Pacific Edge gained access from the Federal Supply Schedule, it would have to negotiate individually with each VA hospital in turn.
Forsyth Barr broker Suzanne Kinnaird said while Pacific Edge's $14.8 million cash burn last financial year was higher than anticipated, the result had revealed further United States market progress.
She said the capital raising would provide the company with flexibility and give it the best opportunity to deliver on its growth plans.
Craigs Investment Partners broker Peter McIntyre said although investors did let interest wane on repeated capital raisings, it would happen, given the full underwriting.
On the question of expenses overshadowing revenue, Mr McIntyre expected evidence ''sooner rather than later'' of seeing benefits from its growing economies of scale.
Ms Kinnaird said after the capital raising, which would leave the company with about $43 million in total cash in hand, it could expand its US business, increase its sales force, consider Southeast Asia expansion and maintain some ''balance sheet headroom''.
Ms Kinnaird sounded a cautionary note, in that Southeast Asia was not included in forecasts because of limited detail and the ''mixed success across its four existing markets to date''.
Mr McIntyre noted Pacific Edge's risk profile was higher than that of a utility or property company, and it was exposed to global competition.
Under the offer, shareholders can subscribe for two new shares for every 11 held, as at June 9, for 61c each. Pacific Edge shares traded on Friday at 63c, down 20% on a year ago.
The offer opens on June 12 and closes on June 29, being underwritten by First New Zealand Capital which gets a 1.5% share of the total proceeds in underwriting and lead management fees. The new shares will be allotted on July 6, BusinessDesk reported.
