EDX Medical - £2.7m raised at a premium, but the warrants tell the story

Shares in digital diagnostics & services firm EDX Medical Group (AIM:EDX) have spiked by 20% to 11.75p on news of a £2.7 million equity fundraise. The money has been raised at a price of 14p per share, a decent premium to Friday’s closing price of 9.75p.

However, we can see why investors have been willing to pay more as each share comes with warrants over 2 shares at an exercise price of just 3p each. While the warrants are significantly in the money right now they are only exercisable between 20th July 2028 and 19th July 2029. In total, assuming full exercise of the warrants, the firm’s total share count will increase by 14% as a result of this fundraise. A full warrants exercise would bring in another c.£1.16 million, making for a weighted-average issue price for this fundraise of 6.67p.

The company

By translating clinical insights into solutions combining advanced biological and digital technologies, EDX Medical seeks to cost effectively improve the detection and characterisation of disease to personalise treatment in a timely fashion. The firm provides doctors, hospitals and insurers/payers with access to a portfolio of the best clinical diagnostics products and services. Early disease detection and biologically based personal treatment optimisation is considered to be the most impactful way of improving patient outcomes, reducing deaths and lowering the cost of healthcare globally.

Fundraise

The money raised today is going to support the expansion of the company's new employee health screening service. This service comprises a package of comprehensive biomarker testing panels, general health and family history checks. There is also a bespoke follow-up service which includes the provision of highly accurate advanced diagnostic tests if required.

On 15th July this year EDX reported that it had reached agreement in principle with three significant UK employers, which have a total of 14,000 employees, to undertake health screening, subject to final documentation. Testing is expected to commence in Q4 this calendar year, with fulfilment estimated to generate revenue in excess of £2 million this financial year, with repeat testing to be carried out in future years.

Today’s update confirmed that discussions with respect to definitive contracts are progressing well. In addition, two further large companies are said to have approached EDX to explore the provision of this new health screening service, with discussions ongoing. Encouragingly, the company commented, “The Board remain very excited by the size of commercial opportunity that these discussions represent.”

EDX Medical 5-year share price chart

It’s been a busy year for EDX, with a number of new product launches and contract wins revealed, along with a move from the Aquis exchange to AIM completed in May. In April the firm announced that it expected to record revenue for the financial year ended 31st March 2026 of £1.2 million - the amount invoiced for the provision of diagnostic tests during the financial year. However, today’s final piece of significant news is that, as processing of these orders ran beyond the end of the financial year, £860,000 of that revenue has been deferred into the current financial year after discussion with the auditors – not a shortfall, just a shift.

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Disclosures

EDX Medical is not a corporate client of Optimo Research Ltd.

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