Chembio Diagnostics Inc. raised $31 million in a stock offering to fund additional production of its coronavirus antibody test, executives said Monday.
The Hauppauge company will use the stock sale proceeds to convert all production lines on Long Island and in Brazil to make the rapid virus test, which it developed in partnership with a British test maker. Previously, Chembio manufactured rapid blood tests for HIV, syphilis, Ebola, Zika and other infectious diseases.
The $31 million in funding nearly equals the company's total revenue of $34.5 million last year.
Separately, Chembio announced plans to return its $3 million Paycheck Protection Program loan by Thursday, citing "guidance" from the U.S. Small Business Administration and the Treasury Department. The federal agencies are pressuring public companies to repay PPP loans in response to an outcry from small business owners who haven't secured funding.
Public companies are eligible for the PPP. On Long Island, Chembio is the third public company to return its loan. A dozen LI public companies secured a total of $6.2 million in PPP loans to sustain 2,330 jobs.
Last week, Chembio sold 2.6 million shares at $11.75 each. The stock price has roughly doubled since the company announced the coronavirus test in March and approval for its sale in the United States. On Monday, shares closed up 27 cents, or more than 2%, to $12.03 on the NASDAQ stock market.
Chembio expects to produce 1 million tests in May and up to 2 million per month by September, according to a securities filing. It has added 10 people to its production staff of 230 and spent $800,000 on tooling, robots and hiring.
Some of the increased production costs were offset by $1 million from Empire State Development, the state’s primary business aid agency.
Chembio executive board chairwoman Gail Page said, “The COVID-19 pandemic has presented our team with an opportunity to leverage our expertise to help society and drive significant new revenue for the business. We have acted quickly to make the strategic shift required to position the business to capture this opportunity,” she said during an earnings conference call with stock analysts last week.