Listed Dunedin biotech company Botry Zen is well on the way to raising a further $1.8 million from a private placement of convertible notes and stapled options, subject to shareholder approval in August.
Chief executive John Scandrett said Botry Zen, whose products fight grape-wasting fungus, had received commitments for $1.3 million already, including some from directors, and aside from shareholder approval would also seek leave to raise a further $500,000.
The funding would be applied to increase production and develop product marketing, he said in a statement yesterday.
Last week, Botry Zen announced it had clawed back its annual losses from $1.6 million last year to a $1.22 million loss this year, but at the cost of an expanding overdraft facility.
Trading revenue increased from $60,000 to $342,208 for the year to March, but while having cut back on expenses in administration, distribution and marketing, Botry Zen's total liabilities for the 12 months grew from $895,000 to $1.28 million, which includes an expanding overdraft facility, rising about 70% from $577,000 to $983,000.
ABN Amro Craigs broker Peter McIntyre said the company was in need of capital injection and the $1.8 million placement would be a "lifeline".
"They will be on a better footing to move toward getting working contracts in Europe," Mr McIntyre said.
Mr Scandrett said the convertible notes would have a $1 face value, pay quarterly interest of 11.25% and after four years convert to ordinary shares.
