Inotec AMD Limited – urgent shareholder approval required

Inotec AMD Limited (“Inotec” or the “Company”), the developer of chronic wound care platform Natrox, is seeking to raise approximately $8 million ahead of a potential Series D round to accelerate sales growth before a potential exit from 2026 – not guaranteed. 

The proposed fundraise requires urgent shareholder approval. 

Major shareholders, including Amadeus Capital Partners, as well as angel investors Jonathan Milner and Patrick Paul, have already provided their consent. If the resolutions are passed, they intend to invest immediately (expected Friday 10 May). 

Wealth Club investors will also have an opportunity to participate on the same terms, expected under EIS – more information will be available after 10 May.

Wealth Club Nominees Limited will respond on behalf of all Wealth Club investors. Consequently, Wealth Club investors are asked how they would like to vote, to inform the nominee's decision. The nominee will vote in line with the majority of the responses received from the underlying shareholders, as measured by the number of shares owned beneficially by them (see Wealth Club terms, in particular section B5).

Please read the information below as well as the documents the Company has prepared (available to download from this page) then express your vote – the deadline to respond is midday Friday 10 May.

Express your preference for the vote – deadline Friday 10 May

The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

The overview provided is based on the information made available to Wealth Club by the Company. Wealth Club has reviewed such information but not verified or audited it. 

Investment summary

As the Company communicated in its January investor update, there have been unprecedented delays in receiving the reimbursement code. However, following numerous positive discussions with the CMS (Centers for Medicare & Medicaid Services), the Company remains confident it will receive the code, as it believes the data it continues to submit to the regulators further strengthens its application. 

The Company is also awaiting a decision from major US private healthcare company Kaiser Permanente (40 hospitals, 618 medical facilities) for the use of Natrox as a topical oxygen therapy across their organisation. 

Sales continue to grow in the US from VA hospital as they increase adoption of Natrox across the group, and also via the New York City reimbursement.  

Internationally sales continue to grow in both Asia and South America, including a new skin care partnership in Korea.  

Taking all the above into account, the Company expects significant sales growth in 2024, potentially up to 2x 2023 revenues – forecast and not guaranteed.

While there has been significant commercial progress, the delays in receiving the code have slowed down the Company’s growth and its ability to generate cash.

Therefore the Company is now seeking to raise approximately $8 million from existing shareholders across two tranches to provide enough cash to exploit commercial opportunities. The share price for the current round is £0.27 (£0.2470 in previous 2022 and 2023 rounds). 

Existing investors have committed $3.25 million to the first tranche. Total commitments in the round are expected to be:

  • Jonathan Milner - $2.5 million 
  • Patrick Paul - $1 million
  • Amadeus Capital Partners - $1 million
  • Puhua Capital - $2 million
  • Others – $1.5 million

Alongside the funding round the Company is also exploring Debt Finance of approximately $2-3 million as a complementary alternative to equity.   

Tranche 1 offer summary – $4 million target

  • One Ordinary share purchased at £0.27 (share price) receives 2 bonus Ordinary shares (for a nominal payment)  
  • 3x liquidation preference on new C class shares

Should no other investors commit, existing investors from whom commitments have already been received are expected to step in and complete the tranche, expected by the end of June 2024 – not guaranteed.

Tranche 2 offer summary

Tranche 2 is targeted for 31 October or earlier, subject to capacity and board and investor majority approval

  • One Ordinary share purchased at £0.27 (Share price) receives 1 bonus Ordinary share (for a nominal payment)  
  • 2x liquidation preference on new C class shares

Note: The 2x and 3x liquidation preferences will fall away, providing that there is either a £10 million Series D raise or an Investor Majority override to agree that a lower raise qualifies.

There is no minimum or maximum investment size for existing investors.

Use of funds and expected future funding requirements

The primary goal of management is to deliver sales of $10+ million per annum. To help achieve this, management expects to deploy funds raised in this round to:

  • Support expansion in US markets following reimbursement code approval
  • Continue to grow non-US opportunities 
  • Fund the additional working capital required to manufacture and ship required products

Planned Series D financing round

It is proposed that the Company will require a Series D raise of $10 million (internal + external investors) to grow the business and exploit anticipated CMS and Kaiser Permanente approvals – not guaranteed.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 

The details

Type
Single company
Sector
Healthcare & Technology
Target return
Funds raised / sought
-
Minimum investment
-
Deadline
10 May for vote on Resolutions
Last updated: 7 May 2024

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