Update on financing and operations

Financing and working capital

As announced in our Preliminary Results on 28 February 2017, the Board remains committed to the Proxima platform and is exploring its immediate financing options to ensure the Company has sufficient working capital to realise the full potential of Proxima and to maximise value for shareholders.

Having undertaken market soundings with existing shareholders and potential new investors, interest exists from a number of parties in participating in an equity fundraising, the details of which are being discussed. The Board remains focussed on the immediate financing options for the Company to secure its short and medium term working capital requirements.

Further announcements will be made in due course.

Operational update and prospects

Since the launch of Proxima 4 in December 2016 there has been a positive reaction in the market and the sales pipeline has continued to expand.  The sales cycle is expected to be typically around nine months or longer.  By 30 June 2017, 55 hospital departments engaged with Sphere Medical on Proxima 4 and requested evaluations, of which 38 so far have received a product demonstration. Furthermore, six customers have already placed orders within the first six months after launch.

The Board is pleased to report that the main issues surrounding the limitation on supply of Proxima 4 sensors announced on 2 May this year have been effectively addressed. Whilst this limitation constrained sales activity during the first half of this year, the Board is confident that the current improvement in sensor yields will ensure sufficient supply to meet demand for the remainder of the year and beyond. 

Our three distributors in continental Europe have all now received initial supplies of Proxima 4 and have received training.  Patient evaluations have also commenced in all three territories.

 

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The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market Soundings, as defined in MAR, were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a Market Sounding are no longer in possession of inside information relating to the Company and its securities.