OBSERVE MEDICAL – FINANCING AND COST REDUCTION ACTIVITIES
Oslo, July 4, 2023 - Observe Medical ASA ("Observe Medical" or the "Company") refers to its stock exchange notices dated 14 December 2022 and 23 March 2023, concerning, among other things, its financing plans.
The stock exchange notice of 14 December 2022 concerned the proposed issuance of a NOK 30-50 million bond loan in the first quarter of 2023, which was planned to be followed by a NOK 100-150 million equity issue around mid-year 2023. The net proceeds from these transactions were planned to finance potential acquisitions of the Unometer urine measurement product range and the Ferrari L. production facility in Verona, Italy, as well as required working capital and other growth initiatives as per the stock exchange announcements dated 21 October 2022 and 14 December 2022, respectively.
While the proposed acquisition of the Ferrari L. production facility was not pursued further (as informed in our announcement dated 20 April 2023), the capital requirements for the contemplated acquisition of the UnoMeter and Abdo-Pressure products from Convatec remain, as well as funding needs for working capital and continued operations.
The stock exchange notice of 23 March 2023 confirmed the entry by the Company of certain loan agreements with shareholder lenders for an aggregate loan of up to NOK 10 million.
Given the current challenging state of the finance markets, the Company has encountered difficulties in securing the contemplated capital alternatives. Despite active efforts to pursue the contemplated bond issuance, new external equity and alternative financing, the Company has so far not been successful in securing its funding objectives. Consequently, the Company is facing liquidity challenges in the short and medium term.
The Company is continuously working to find solutions to these liquidity challenges, including additional funding from external sources. However, the process of raising capital through equity and/or external debt cannot be concluded before the summer holidays and is now expected to be continued in July/August based on positive feedback from relevant sources. Meanwhile, the Company has initiated short term cost-saving measures, including operational measurements and a temporary layoff of staff. Moreover, the Company is engaged in constructive dialogues with its operational creditors to manage short-term liquidity, and remains in close and constructive dialogue in order to optimize cash management in the short term.
Although the Company remains confident that required financing to address the challenging liquidity situation can be secured, no assurance can be given that the Company will be able to secure the financing required to meet its future liquidity requirements. The Company will update the market and its stakeholders on developments as it navigates these challenges to restore stability in its liquidity position in the short term.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Rune Nystad, CEO Observe Medical
Mobile: +47 916 24 683
E-mail: [email protected]
Per Arne Nygård, CFO of Observe Medical
Mobile: +47 411 04 345
E-mail: [email protected]
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.
REGULATORY STATEMENTS
The information is deemed to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The information was submitted for publication by Per Arne Nygård, CFO at at 15.30 CET, 4th July 2023.