Atomo Diagnostics Limited has announced a capital raising initiative comprising a Share Purchase Plan (SPP) and a Placement, aiming to raise up to $1 million through the SPP and additional funds via a Placement, subject to shareholder approval at a June 23 meeting.
- Offer of up to 54 million shares and options via SPP at $0.0185 per share
- Placement includes up to 67.9 million options, conditional on shareholder approval
- Funds allocated to product development, operational cost reduction, regulatory activities, and corporate expenses
- Directors intend to participate fully in the capital raising
- Risks include share price volatility, funding needs, regulatory approvals, and competitive pressures
Capital Raising Overview
Atomo Diagnostics Limited (ASX: AT1), a player in the medical diagnostics sector, has unveiled a comprehensive capital raising strategy designed to bolster its financial position and support ongoing business development. The company is offering a Share Purchase Plan (SPP) to eligible shareholders, allowing them to subscribe for up to 54,054,054 new shares at an issue price of $0.0185 per share, accompanied by free attaching options exercisable at $0.04. This SPP aims to raise up to $1 million before costs.
In parallel, Atomo is conducting a Placement involving the issue of up to 67,989,186 options, also exercisable at $0.04, subject to shareholder approval at a General Meeting scheduled for June 23, 2025. The combined capital raising efforts are intended to provide the company with approximately $3.1 million in new funds, including proceeds from a prior tranche of the Placement.
Use of Funds and Strategic Intent
The funds raised will be strategically allocated across several key areas: $575,000 towards new product development, $455,000 to reduce operational costs related to product manufacturing, $395,000 for regulatory and quality assurance activities, $745,000 to commercial and business development, and $830,000 for corporate administration and working capital. These allocations reflect Atomo’s commitment to advancing its product pipeline and expanding its market presence while maintaining operational efficiency.
Managing Director and CEO John Kelly emphasized the company’s focus on user-centred diagnostic solutions, highlighting the increased acceptance of at-home testing since the COVID-19 pandemic. The capital raise is positioned to support the company’s growth trajectory in this evolving market landscape.
Offer Mechanics and Shareholder Participation
The SPP is open exclusively to eligible shareholders registered as of April 23, 2025, with Australian addresses. Shareholders may subscribe for shares up to a value of $30,000, with applications subject to scaling if oversubscribed. The offer is non-renounceable, meaning entitlements cannot be traded or transferred. Directors John Kelly, Patrick Cook, and Anthony May have confirmed their intention to participate in the SPP and Placement, signaling confidence in the company’s prospects.
The Placement and SPP shares and options are subject to shareholder approval, with the company reserving the right to scale back applications to comply with ASX Listing Rules. The issue of options alongside shares is designed to provide additional value to investors and incentivize long-term participation.
Risks and Market Considerations
Atomo’s prospectus outlines a range of risks inherent in the investment, including share price volatility, the need for future funding, regulatory approval uncertainties, reliance on distribution partners, intellectual property protection challenges, and competitive pressures within the healthcare diagnostics industry. The company acknowledges that its operations remain speculative and that investors should carefully consider these factors before participating.
Financially, the pro forma balance sheet reflects an improved cash position post-raise, with net assets increasing to approximately $9.6 million. However, the company cautions that additional capital may be required to support ongoing operations beyond January 2027, depending on market and operational developments.
Looking Ahead
The success of this capital raising initiative will hinge on shareholder approval at the upcoming General Meeting and the level of participation in the SPP. If fully subscribed, the raise will strengthen Atomo’s balance sheet and support its strategic objectives. Investors and market watchers will be keen to see how the company navigates the regulatory landscape and competitive environment in the months ahead.
Bottom Line?
Atomo’s capital raise sets the stage for growth but hinges on shareholder approval and market reception amid sector uncertainties.
Questions in the middle?
- Will shareholder approval be secured at the June 23 General Meeting to proceed with the Placement options?
- How will Atomo manage potential dilution impacts on existing shareholders if the SPP is oversubscribed?
- What are the company’s contingency plans if additional funding is required beyond the current raise?