Incanthera (LSE:INC) announced it has completed a £355,000 financing through unsecured convertible loan notes issued to new and existing investors.
The dermatology and oncology technology specialist will use the proceeds for general working capital and to advance commercial discussions with iSmart Developments, the partner with which it signed an exclusive bundled distribution agreement in September for bioactive creams supplied alongside iSmart's LED skincare devices.
The notes carry 3.75% annual interest, rolled up and compounded, and mature in two years, converting into new shares at 2p each once Incanthera secures the necessary shareholder authorities.
That conversion price represents an 18% discount to the 10-day volume-weighted average price of 2.44p as of 28 September.
Incanthera also agreed to issue 710,000 warrants exercisable at 2p, which would raise a further £14,200 if exercised in full.
The raise follows a year in which cash reserves fell to just £4,000 by 31 March, from £80,000 a year earlier, despite a £508,000 investment round completed earlier in the period, as the company reported an operating loss before financing and exceptional items of £2.28m.
"This small funding round enables the company to repay some of its creditors and most critically helps to fund future transaction costs," said chief executive Stuart Robertson, pointing to the company's shift "away from a marketing sponsored, direct-to-consumer model to our partner led, skincare biotech development and supply model."
The warrants and share conversions remain subject to Incanthera obtaining sufficient shareholder authorities to allot the underlying shares.