ReNeuron raises £5M through new equity financing instrument

Funding

Stem cell specialist ReNeuron has signed up to a novel funding facility under which it can draw equity funding up to a total value of £5 million, taking the money as and when it requires and issuing new shares each time it does so.

The funding instrument is called a Flexible Use Small Capital Increase Agreement. When ReNeuron draws down money through the agreement it will issue shares to the provider, Matrix Corporate Capital LLP, at a price calculated according to the trading volume and average price of ReNeuron shares.

Matrix acts as ReNeuron’s corporate broker. Given that trading in the company’s shares is healthy, Matrix will use its contacts and trading expertise to place the newly-issued stock into the market.

Malcolm Le May, Chief Executive of Matrix, hopes to promote this method of fundraising to other high-risk healthcare companies. He claims it is an efficient way of issuing new equity into the market in a manner that is scalable with the volume of shares traded, and which does not exclude retail or institutional investors. Capital raised in this way is lower cost, there is no short selling of stock during pricing, and management time is not taken up by fundraising.