The clock is ticking for robotic mobility device maker Rex Bionics (RXB:AIM) as management says it is in desperate need of more money by the end of April to keep trading.
Rex develops robotic devices to support spinal injury sufferers, but has failed to sell many devices due to its high price tag.
More than two-thirds of the company’s value has been wiped off as investors could lose all of their money if a new agreement is not reached. The stock has plummeted 69% to 4p.
Rex is in discussions to sell its operating business to a new operating company in exchange for an undisclosed equity interest.
However, investors should expect minimal ownership if it goes ahead as the anonymous majority owner will want the best deal for saving the business.
Under the potential agreement, an undisclosed private investment fund manager will provide funding to develop a new product prototype to reduce costs and improve Rex’s existing device.
Management needs £4.5m to push a new product to the prototype phase and to fund the company for at least a year as its cash is only expected to last into the second quarter of 2017.
The bad news doesn’t stop there as Rex is considering leaving AIM as its unit sales in the year to 28 February are anticipated to fall below market expectations.
