Concepta (1.1p), the personalised healthcare company which has developed the proprietary self-test platform myLotus, has recently announced plans to raise new funds including the issue of new shares at 0.8p each. The company is clearly looking to the future with confidence as the cash will be used to develop the business further at a time when most others are seeking to minimise costs wherever possible. Although the current share price is significantly above the level at which new cash is being raised, the company has a tiny market capitalisation and there is scope for considerable capital growth.The self-test platform myLotus is said to be the UK’s most accurate home-use fertility tracking and pregnancy testing system. The company joined AIM in July 2016 when it was reversed into cash shell Frontier Resources International. The proceeds of the upcoming fundraising, which is due to be rubber-stamped at a General Meeting on 24 April, will be £1.9m gross and approximately £1.74m net. The cash will be used in a number of ways. Digital marketing will be strengthened and key
marketing personnel will be appointed. Strategic commercial contracts are being sought to exploit the myLotus product and technology nationally then internationally. There are plans to invest in developing and extending the Concepta portfolio to capture and provide greater insight into fertility for women and couples to maximise their chance of conception. FInally, the company wishes to continue to develop and improve its internal systems, controls and compliance. This includes digital ‘app’ developments, software, algorithms and data capture.On 14 April the company announced that it has agreed to outsource manufacturing for myLotus, reducing overheads and allowing it to focus on product commercialisation. Agreements have been signed with Abingdon Health Ltd for it to acquire Concepta’s lateral flow test manufacturing site in Doncaster. Under the agreement Concepta will receive a total cash consideration of approximately £0.3m.This is an interesting opportunity to buy into a company which has an extremely low valuation even relative to other AIM-listed companies. Although there are plenty of recovery opportunities around at the moment, chances to invest in early stage businesses with potential for rapid growth are rarer. The shares are a SPECULATIVE BUY.
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