The ResApp Health Ltd (ASX: RAP) share price has returned from its trading halt and sunk lower.
At the time of writing, the digital health company's shares are down 9% to 6.2 cents.
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Why was the ResApp share price in a trading halt?
ResApp requested a trading halt last week so that it could undertake a capital raising.
This morning the company announced the successful completion of its capital raising after receiving firm commitments from institutional and sophisticated investors to raise $5.5 million before costs.
According to the release, these funds will be raised through the issue of 94,827,588 new fully paid ordinary shares at an issue price of 5.8 cents per share. This represents a 14.7% discount to its last close price.
Its existing substantial shareholder, Fidelity International, has agreed to cornerstone the capital raising with a $1.5 million investment.
Why is ResApp raising funds?
The release advises that the funds raised from the capital raising provide ResApp with the financial flexibility to progress a number of initiatives.
This includes the hiring of key personnel, allowing the company to grow its commercial partnership pipeline and expedite product development initiatives. Funds will also be used for general working capital purposes.
ResApp's CEO and Managing Director, Dr Tony Keating, said: "We are very pleased to have generated such strong interest in the placement. I would like to welcome a number of new institutional investors to our register and also express our thanks to our existing shareholders who have continued to support the company."
"Funds secured from the placement will provide ResApp with a very solid footing to execute on our commercial strategy in telehealth and emerging markets, continue to innovate in areas such as COVID19 screening and management, and further expand the opportunity to provide solutions to large pharmaceutical companies for clinical trials and disease management," he added.
