Life sciences group Integumen PLC (LON:SKIN) has agreed to buy scientific data management specialist, RinoCloud, for £3mln as it looks to build out its Labskin AI platform.
AIM-quoted Integumen had been using RinoCloud’s technology in its development of Labskin AI – an extension of Integumen’s laboratory-grown skin product which provides real-time test results to skincare, wound care, pharma, healthcare and personal care companies.
WATCH: Integumen builds out Labskin AI platform with RinoCloud acquisition
To pay for the acquisition, Integumen has issued 214.29mln new shares at 1.4p apiece to RinoCloud shareholders, who will own 22.5% of the company.
“The conversion of the business model from a physical laboratory to an automated, real-time, real-world digital data platform means we can quickly scale up to meet the growing demand for our cloud-based services,” said chief executive Gerry Brandon.
“Our clients benefit from improved delivery of data directly to their scientist user-portal. Here they can monitor and adapt the testing process live from Labskin laboratories equipment or any third-party laboratory equipment, anywhere in the world.”
He added: “With strong growth seen in the first quarter of 2019, Labskin is at the forefront of animal-free testing for the healthcare, pharma and beauty industries.”
£2.5mln fundraise
In a busy statement from Integumen, the company also confirmed it was looking to raise £2.5mln from investors to help fund the next stage of its growth.
The company plans to issue 179.9mln shares at 1.4p – a 19% discount to Thursday’s closing price.
The new shares will represent approximately 18.9% of the enlarged share capital.
As part of the fundraising, Helium Rising Stars Fund, which currently owns a 9.2% stake in Integumen, has agreed to invest another £400,000. That will leave it with 7.6% of the shares after dilution.
Most of the money will be used for general working capital purposes, although some of the cash has been earmarked for sales and marketing costs and paying off liabilities associated with the Visible Youth business (more on that below).
Disposal of visible youth
As Labskin AI begins to dominate Brandon’s focus and future strategy, Integumen has disposed of Visible Youth – a skincare brand that never really took off under previous management.
The division has been sold back to Donald Nicholson – an ex-Integumen director who had ties to Visible Youth before the company acquired it in 2016.
As part of a settlement between the parties, Nicholson has paid £1 for Visible Youth, while Integumen has also agreed to pay off £570,000 of liabilities in a mixture of cash and shares.
Debt conversion
Integumen has reduced its debt levels after converting £421,000 of outstanding debt owed to Venn Life Sciences Holdings plc (LON:VENN) – which Integumen was spun out of in 2017 – into shares.
Another £400,000 owed to Cellulac for new lab equipment has also been converted.
On 30 April, Integumen is holding a general meeting so shareholders can vote on various resolutions.
Integumen shares were down 12.8% to 1.5p on Friday morning, reflecting the discounted issue price.
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