Biotechnology company A2 Corporation is looking to raise about $10.8 million through a renounceable rights issue.
The three for four issue of ordinary shares to all shareholders will be at an offer price of 10c per share.
Proceeds of the offer would be used to reduce bank debt and provide working capital, the company said.
The issue is being fully underwritten by majority shareholder Mountain Road Investments.
A2 Corporation chief executive Anthony Lawler said he believed the confidence shown by Mountain Road was a reflection of the progress made by his company in the past 12 months and the exciting plans for the next 12 months.
A2 Corporation owns and licenses intellectual property that enables the identification of cattle for the production and marketing of A2 milk.
For the year to the end of March A2 Corporation reported an annual net loss of $6.3 million as it invested in expansion into North America, Australia and Asia.
A2 Corporation shares closed at a year low of 10c yesterday, having been as high as 35c last September.