$2.5M Placement at $0.002 per Share to Fund Skin Elements’ SE Formula Rollout
Skin Elements Limited has locked in $2.5 million through a two-tranche placement to accelerate the commercial rollout of its SE Formula biotechnology products, offering investors discounted shares and options.
- Two-tranche placement raising $2.5 million at $0.002 per share
- Free attaching options exercisable at $0.006 with three-year expiry
- Placement proceeds to fund SE Formula product commercialization
- Significant shareholder dilution of approximately 64%
- Shareholder approval required for second tranche in November
Capital Raise Details
Skin Elements Limited (ASX – SKN) has announced a $2.5 million capital raise through a two-tranche placement priced at $0.002 per share, accompanied by free attaching options exercisable at $0.006 each with a three-year lifespan. The first tranche, raising $315,000, will be issued under the company's existing placement capacity, while the larger second tranche of $2.185 million awaits shareholder approval at the upcoming Annual General Meeting in late November.
Strategic Use of Funds
The funds raised are earmarked primarily for the commercial launch of Skin Elements’ award-winning SE Formula biotechnology. This includes flagship products such as the Soleo Organics sunscreen, PapayaActivs therapeutic skincare range, the SuprCuvr hospital-grade disinfectant, and ECO-Nurture agricultural biostimulant. The company also plans to allocate funds towards working capital and costs associated with the placement.
Impact on Shareholders
The placement will result in the issuance of 1.25 billion new shares, effectively more than doubling the current share count and diluting existing shareholders by approximately 64% on an undiluted basis. To mitigate concentration risk, no single investor will hold more than 20% of the company post-placement. The lead manager, 62 Capital Pty Ltd, will receive a 6% fee on the capital raised, payable in cash or shares.
Market Context and Outlook
The placement price represents a 33% discount to the last closing price and a 19% discount to the 15-day volume weighted average price, reflecting the company's need to attract sophisticated investors swiftly. Skin Elements’ executive chairman, Peter Malone, expressed confidence that this funding will enable the company to transition its innovative natural biotechnology products into commercial revenue streams, marking a pivotal step in its growth trajectory.
Next Steps
With the first tranche settlement imminent and the second tranche subject to shareholder approval, investors will be watching closely for the AGM outcome and subsequent progress in commercialising the SE Formula products. The success of this capital raise and the company’s ability to execute its commercialization plans will be critical to Skin Elements’ future valuation and market position.
Bottom Line?
Skin Elements’ $2.5 million raise sets the stage for commercial growth but hinges on shareholder approval and market uptake of its SE Formula products.
Questions in the middle?
- Will shareholders approve the second tranche and attaching options at the AGM?
- How quickly can Skin Elements convert its SE Formula products into sustainable revenue?
- What impact will the significant dilution have on share price and investor sentiment?
