The Next Science Ltd (ASX: NXS) share price has returned from its trading halt and is dropping lower on Thursday.
In morning trade the medical technology company's shares are down 3% to $1.28.
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Why was the Next Science share price in a trading halt?
The Next Science share price was placed into a trading halt on Wednesday after announcing the launch of a $15 million equity raising.
This morning the company revealed that it has received firm commitments for its fully underwritten placement of $8 million to institutional and sophisticated investors.
In fact, the placement was oversubscribed, with strong support from existing and new eligible investors.
In addition to this, the company has received a firm commitment for an additional placement of $2 million to its existing major shareholder, Mr Lang Walker. Though, the completion of this placement is subject to shareholder approval.
These funds will be raised at $1.20 per share, which represents a 9.1% discount to its last close price.
Next Science will now push ahead with its share purchase plan, which aims to raise a further $5 million from retail investors. This will be undertaken at the lower of the placement price or a 2% discount to its five-day volume weighted average price on the closing date.
Why is Next Science raising funds?
The company is raising funds to provide it with working capital to primarily support the commercial launch of its new XPerience Surgical Rinse in the US market in the first half of 2021. This is subject to clearance by the U.S. Food and Drug Administration.
The XPerience Surgical Rinse is a sterile solution in a 500mL Polypropylene bag. The solution is used to irrigate the surgical site as a last wash replacing some of the saline rinses. It remains active for upwards of five hours and is 10 million times more effective at removing MRSA than current options.
Management believes there is a huge unmet need for the product. It notes that there are 110 million surgeries globally each year, with 48 million in the United States and 2.2 million in Australia.
Next Science's Managing Director, Judith Mitchell, commented: "We are delighted with the strong level of support for the placement and would like to thank our existing shareholders for their continued support and we welcome new shareholders to our register."
"We are also pleased to provide eligible shareholders with the opportunity to participate in the capital raising via the SPP. With the proceeds of this raise, we will be well placed to capitalise on the significant market opportunity offered by our XPerience Surgical Rinse and the other applications of our Xbio technology," she concluded.
