Allied Healthcare Announces a $5 Million Equity Funding Package  
9/30/2011 10:19:43 AM

PERTH, Australia, 30 September 2011 -- Allied Healthcare Group Limited (ASX: AHZ) (Allied Healthcare) is pleased to announce that it has secured an approximate A$5m equity funding package to allow the company to fund Coridon’s vaccine development program, launch CardioCel and provide further general working capital.

The equity funding package is comprised of a private placement and a standby equity distribution facility with a United States based investment company.

The private placement will raise a total of A$2,006,000 by way of a placement of Allied Healthcare shares to sophisticated and professional investors and related parties of Allied Healthcare, including directors and substantial shareholders. The Metal Group, an entity controlled by Mr Andrew Forrest and substantial shareholder, will subscribe for $450,000 of the placement. Directors and substantial shareholders (other than The Metal Group) will subscribe for a total of A$463,000 of the private placement.

The placement was arranged and managed by Bell Potter. Under the terms of the placement, Allied Healthcare will issue a total of 71.4 million shares each at 2.8 cents, representing approximately 12.5% of Allied Healthcare’s issued capital. Allied Healthcare will also issue a total 6 million options (exercisable at 6 cents with an expiry date of 3 years from the date of issue) to Bell Potter as a management fee.

Allied Healthcare will seek shareholder approval at a general meeting to approve that portion of the placement being issued to related parties, including directors and substantial shareholders. Further details of the private placement will be contained in the notice of meeting to be released by Allied Healthcare.

In addition to the private placement, Allied Healthcare has entered into a standby equity distribution agreement with Kodiak Capital pursuant to which it has secured a US$3m in equity funding facility from Kodiak Capital. The funding facility can be drawn down at Allied Healthcare’s option, subject to compliance with certain covenants in the agreement, during the next 12 month period. Under the agreement, the consideration for any amount drawndown by Allied Healthcare will be the issue of Allied Healthcare shares at 85% of the market value (based on a volume weighted price average over 5 trading days). Allied Healthcare can terminate the agreement during the 12-month period with notice. As a part of the agreement with Kodiak, Allied Healthcare will issue Kodiak with a total of 4,411,765 shares as consideration for Kodiak entering into the equity funding arrangement. Allied will also pay an agency fee of 1,200,000 shares for arranging the deal.

Further details of the standby equity distribution agreement with Kodiak will be contained in the notice of meeting to be released by Allied Healthcare.

Kodiak Capital Group manages a portfolio of global investments in public and private entities and has transacted in excess of US$300 million in financing for companies across a multitude of industries including healthcare.

Allied Healthcare Managing Director Lee Rodne added that the equity funding package provides funding certainty over the near term. “We are fortunate in having a number of financing avenues, which will provide us with up to $6m to fund future business development activities.

“We have an ambitious program of product development and commercialisation ahead of us. We plan to commit these funds to our projects that offer both strategic and near term commercial outcomes.”

“We see significant opportunities in the emerging DNA vaccine market and these funds will allow us to further progress our work with Prof Ian Frazer. In addition, our tissue engineering business Celxcel is producing some very exciting results, and we are now looking to progress our encouraging Phase II results for the Congenital Heart Disease Regenerative Patch to market approval in 2012 and at the same time discussing application of this technology with potential global partners.”

“We are a diversified healthcare company with a range of opportunities in R&D and clinical development and are looking forward to an exciting time ahead,” he concluded.

The funds raised from the equity funding arrangements will be used for Coridon’s vaccine development program, launch CardioCel and provide general working capital.

Allied Healthcare will provide further details of the equity funding arrangements shortly in a notice of meeting.

For more information, please contact:

Lee Rodne – Managing Director Tel: +61 8 9266 0100 or 0433 926277

Rebecca Wilson – Buchan Consulting Tel: 0417 382 391

About Allied Healthcare Group Limited

Allied Healthcare Group Limited (ASX: AHZ) is a diversified healthcare company focused on investing in and developing next generation technologies with world class partners, acquiring strategic assets to grow its product and service offerings and expanding revenues from its existing profitable medical sales and distribution business. The Company has assets from Research & Development through Clinical Development as well as Sales, Marketing and Distribution.

Allied Healthcare Group is in the process of commercializing its innovative tissue engineering technology for regenerative medicine and is a major investor in Brisbane based Coridon Pty Ltd, led by Professor Ian Frazer developing next generation vaccines for global markets.

Further information on the Company can be found on