Sales Increase and Supply Contract Signing Positive Factors Still Insufficient Against Rights Offering Setback

Diagnostic Testing Platform Company Noeul Plans Large-Scale Paid-in Capital Increase One Year After Listing
Issue Price Adjusted Down from 4,275 KRW to 3,245 KRW Due to Stock Price Decline

The diagnostic testing platform company Noeul, which is conducting a large-scale paid-in capital increase just over a year after its listing, is expected to see a reduction in the scale of its fundraising. This is because the initial issuance price was lowered following a sharp drop in the stock price after the decision to increase capital. Despite consecutively disclosing positive news such as large-scale supply contracts and strong performance to the market, it was insufficient.

According to the Financial Supervisory Service's electronic disclosure, Noeul announced on the 3rd that the initial issuance price was adjusted to 3,245 KRW. This is 24.21% lower than the planned issuance price of 4,275 KRW.

The reason for the lower issuance price is the stock price decline due to the large-scale paid-in capital increase. Generally, a paid-in capital increase is negative news for the stock price because concerns about dilution from a large volume of shares being issued are priced in advance. Noeul plans to issue an additional 7.02 million shares, which corresponds to 61.29% of the total 11.45 million shares in this capital increase. Because of this, Noeul hit the lower limit price on the day after the capital increase decision, on the 5th of last month. Since then, the stock price has hardly rebounded and remained in the mid-to-high 4,000 KRW range. The issuance price also decreased.

After the capital increase disclosure, Noeul revealed positive news to the market one after another to recover the falling stock price, but it was insufficient. On the 11th of last month, through an earnings announcement, it disclosed that second-quarter sales reached 1.018 billion KRW. This represents a 103.6% increase compared to the previous quarter and a 224.2% growth compared to the same period last year. Additionally, it secured large-scale supply contracts. On the 6th of last month, it signed a supply contract worth 1.8803 billion KRW, and on the 1st, a contract worth 6.6593 billion KRW related to the miLab device. These amounts correspond to 346.9% and 1,218.8% of recent sales, respectively.

The CEO also took steps to stabilize the stock price. Im Chanyang, CEO of Noeul, stated in a letter to shareholders, "In the first half of this year alone, we achieved three times last year's sales," and added, "We are currently in discussions with potential customers in more than 10 countries in the malaria field." He emphasized, "We expect sales growth of at least twice the first half compared to malaria alone to become visible."

However, despite these efforts, the initial issuance price was ultimately lowered. Based on the initial issuance price, Noeul's public offering amount is 22.7448 billion KRW, down nearly 8 billion KRW from 30.0105 billion KRW. The company plans to invest the same 2.83 billion KRW as before in facility and equipment expansion. However, the operating funds, which were planned to be 27.275 billion KRW, have been reduced to 19.9418 billion KRW. Most of these funds are planned to be used for research and development (R&D).

The final issuance price will be determined by comparing the initial and second issuance prices and selecting the lower amount. However, there is a regulation that if the weighted arithmetic average stock price from 3 to 5 trading days before the subscription date is higher than 60% of the lower price between the initial and second issuance prices, the final issuance price can be set at that level. Noeul plans to set the final issuance price on September 11 and announce it the following day, the 12th.

Noeul was established in 2015. It developed the miLab platform, which diagnoses diseases by analyzing blood and tissue cells based on embedded artificial intelligence (embedded AI) technology and its proprietary solid-based next-generation staining and immunodiagnosis (NGSI) technology. The miLab is a compact device portable enough to carry around. It has the advantage of being able to diagnose various diseases with just a disposable cartridge exchange on a single platform.

This content was produced with the assistance of AI translation services.