Quantum Healthcare Launches Major Equity Deals: Placement, Debt Conversion & Directors’ Fee Capitalisation to Reshape Shareholding Structure

Key Points Investors Must Know

• Quantum Healthcare Limited announces three major corporate actions to raise capital, restructure debt, and settle outstanding directors’ fees.
• Proposed Placement: 2.73 billion new shares to be issued to two private investors for S\$3 million, representing 10.88% of enlarged share capital.
• Debt Conversion: PW Dental Group to convert S\$1.76 million in loans into 1.60 billion new shares (12.74% of enlarged share capital).
• Directors’ Fees Capitalisation: S\$211,266 in unpaid fees to be settled with 192 million new shares issued to current and former directors.
• Significant dilution expected: Total shares outstanding to increase from 8.01 billion to 12.53 billion.
• Shareholder approval required for the debt conversion and directors’ fee capitalisation at an upcoming EGM.
• Fund use: Proceeds to be allocated to working capital, M&A in MedTech, and payment of outstanding professional fees amidst going concern issues.
• Potential shift in control: Dr Jimmy (Gian Siong Lin Jimmy), via PW Dental, will become a substantial shareholder (18.24%).
• Price sensitivity: Actions address urgent working capital concerns but carry significant dilution risk and may pressure share price.

In-Depth: The Three-Pronged Equity Initiative

1. Proposed Placement of 2.73 Billion New Shares

Quantum Healthcare has entered into a placement agreement with Ms Chen Liang (COO of Eureka Blue Sky Pte Ltd) and Mr Martin Lim Kai Lee (COO of Supportive Enterprise LLP). Each will subscribe for 1,363,636,400 shares at S\$0.0011 per share—a 10% premium to the last traded VWAP—totaling S\$3 million. The new shares represent 17.01% of the current and 10.88% of the enlarged share capital. There is no placement agent; the investors were introduced via the company’s COO (Dental), Dr Jimmy.

2. Debt-for-Equity Swap with PW Dental Group

Quantum Healthcare will convert S\$1,755,503.40 in outstanding loans from PW Dental Group (wholly owned by Dr Jimmy) into 1,595,912,182 new shares, also at S\$0.0011 per share. This debt originated from a S\$2 million loan to a subsidiary for clinic acquisitions, of which S\$1.19 million remains unpaid by a related entity (EDC). The conversion will relieve immediate repayment pressure following a recent demand letter from PW Dental and is seen as critical for the company’s going concern status. Upon completion, Dr Jimmy and PW Dental will own 18.24% of the enlarged share capital, making him a controlling shareholder.

3. Directors’ Fees Capitalisation

The company will settle S\$211,266.40 in unpaid directors’ fees by issuing 192,060,363 new shares at S\$0.0011 per share to four current and former directors:

• Ng Fook Ai Victor – 87,878,545 shares
• Ramasamy Jayapal – 7,272,727 shares
• Melvin Lim Chun Siong – 26,909,091 shares
• Ng Boon Eng (former director) – 70,000,000 shares

This move strengthens the company’s balance sheet by converting payables into equity, improving debt-to-equity ratios and conserving cash.

Major Shareholder and Structural Impacts

• The total share base will increase significantly from 8.01 billion to 12.53 billion shares, resulting in substantial dilution for existing shareholders.
• The controlling shareholder, Quek Chin Thean, will see his holding reduced from 20.68% to 13.23% post-transactions.
• Dr Jimmy and PW Dental (including this conversion) will rise to 18.24% of the company, becoming the second largest shareholder group.
• New investors Chen Liang and Martin Lim Kai Lee will each own 10.88% of the company after the placement.

Rationale, Use of Proceeds, and Financial Effects

The company faces urgent liquidity constraints, with management confirming that working capital is currently insufficient to meet obligations. The placement and debt conversion will provide immediate capital for overheads, debt repayments, and planned M&A activities in the MedTech sector. Up to S\$1 million will be used for working capital and S\$2 million for acquisitions.
The transactions are expected to reduce debt (from S\$4.39 million to S\$2.71 million), improve net tangible asset per share (from negative S\$0.043 to negative S\$0.003), and lower loss per share (from S\$0.028 to S\$0.018) due to the enlarged share base.

Regulatory and Shareholder Approvals

• The placement of shares to new investors will be executed under the company’s general mandate and does not require shareholder approval.
• The debt conversion and directors’ fee capitalisation require specific EGM approval, with interested parties (Dr Jimmy, relevant directors) required to abstain from voting.
• All share issuances are subject to SGX-ST approval for listing and quotation.

Key Risks and Sensitive Information for Shareholders

• Significant Dilution: Existing shareholders will see their stakes diluted by nearly 36%.
• Change in Control Dynamics: Potential for increased influence by Dr Jimmy and new investors.
• Going Concern Risks: The company is under financial strain; these measures are essential to survival and may impact future valuation.
• Price Sensitivity: The scale of dilution and control shift, coupled with ongoing liquidity risks, could result in significant share price volatility.
• Uncertainty: Completion of the debt conversion and fees capitalisation is subject to EGM and regulatory approvals; failure could intensify going concern issues.

What Should Investors Watch?

1. Outcome of the upcoming EGM for required approvals.
2. SGX-ST’s response to the listing application for new shares.
3. Further announcements regarding the use of proceeds and potential M&A opportunities.
4. Any changes to the company’s financial position and liquidity status in future results.

Conclusion

Quantum Healthcare’s bold move to restructure its capital base and address urgent liquidity needs through a major share placement, debt-for-equity swap, and directors’ fee capitalisation is a pivotal event that could significantly reshape the company’s ownership, governance, and financial outlook. While these actions are designed to bolster the balance sheet and lay the foundation for future growth, they come at the cost of substantial dilution and a potential shift in control. Investors should closely monitor the EGM outcomes and subsequent disclosures for updates on deal completion, use of funds, and the company’s financial recovery trajectory.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisers before making any investment decisions. The author and publisher accept no liability for any losses arising from reliance on this information.

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