PainChek Share Price Up, Secures Funding for Expansion

By ,

Earlier this morning shares of PainChek Ltd [ASX:PCK] were down 8.82%, trading at 15.5 cents. At time of writing the share price is back to 18 cents, up 5.88%.

The Painchek share price took a slight dip after a meteoric rise over the past month:

PCK asx share price

Source: tradingview.com

Today, we’ll look at why the PainChek share price initially went down and the details of its recent capital raise.

PainChek opts for placement over SPP

As we speculated in previous coverage, the content of today’s announcement included details of a capital raise.

If the extra shares that stem from a capital raise are offered at a discount, it is not uncommon to see the value of the shares fall.

When a capital raise is needed, growth companies such as PainChek sometimes turn to retail and/or sophisticated shareholders for more money to fund their expansion.

In this case, PainChek opted for a $4.15 million placement via ‘a range of current sophisticated Painchek shareholders, including two major shareholders.

Here are the details of the placement:

  • Placement priced at 14.5 cents
  • Price is a 10% discount to the 10-day volume weighted average price (VWAP) of 16.11 cents
  • The investors that subscribe to placement will receive one free attaching unlisted option (for every two shares taken up) exercisable at 25 cents
  • This option expires at 30 June 2022

The shares will be issued in two tranches, $3.15 million on 20 June, and $1 million on 19 July of this year.

The options will give the company additional funds, should they be exercised at a later date.

What PainChek will use the money on

Importantly, the company outlined what the funds will be used on:

  • Market expansion into ‘selected European and overseas markets’ under CE mark clearance (an EU compliance mark)
  • Market development for new segments such as direct to consumer and hospitals
  • FDA De Novo regulatory clearance
  • Completion of clinical study for Children’s App

PainChek CEO Philip Daffas commented on the placement:

We are now well positioned to extend into multiple international markets and deliver on the Children’s App that has an even larger market opportunity. These new funds give us the runway to do just that.

So despite today’s fluctuations, the company has now outlined its ambitious plans for growth.

It will just be a matter of execution now.

If the world of AI and automation intrigues you and you are looking to invest in these types of companies, make sure to read our free report on the topic which details four companies pushing the field forward in Australia. It’s available here.

Regards,

Lachlann Tierney

For Money Morning

About Lachlann Tierney

Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest…

PainChek Share Price Up 13% As Healthcare Sector Soars

Mobile medical app developer Painchek Ltd [ASX:PCK] has seen its share price jump 13.24% today, up 0.9 cents to trade at 7.7 cents per share.

PainChek Enters Trading Halt…What Next?

Today, we look at some possible outcomes from the Painchek (ASX:PCK) trading halt. The Painchek share price won’t be moving until an announcement is made. Read more to get the scoop on what the trading halt is about.

Best Performing Stocks on the ASX for May

The ASX 200 recorded a 1% rise over the last month, the big winner being Lynas Corporation Ltd [ASX:LYC] with a 54% gain. Today we will be looking at what has been driving the best performing stocks on the ASX for May.

PainChek’s Share Price Up Big on Distribution Agreement

The latest news out of PainChek is that it has signed an agreement with a UK-based software company for the distribution of its artificial intelligence (AI) enhanced product.