Control Bionics Limited has announced a 1-for-5 non-renounceable rights issue to raise up to $2.06 million, aiming to fund the commercial expansion of its NeuroStrip® device and operational growth. The offer is partially underwritten and open to eligible shareholders in Australia and New Zealand.
- 1-for-5 rights issue at 3.5 cents per share to raise up to $2.06 million
- Funds targeted for NeuroStrip® rollout, NeuroNode® expansion, and clinical trials
- Rights issue partially underwritten to $1.15 million by major shareholders and partners
- Offer closes 15 September 2025, open to Australian and New Zealand shareholders
- Potential dilution mitigated if shareholders fully subscribe; substantial holders expected to maintain control
Capital Raise to Support Growth Initiatives
Control Bionics Limited (ASX – CBL), a medical device company focused on innovative neurotechnology, has launched a non-renounceable rights issue to raise up to approximately $2.06 million. The offer invites eligible shareholders to subscribe for one new share for every five shares held at an issue price of 3.5 cents per share. This capital raising is designed to accelerate the commercial rollout of the company’s NeuroStrip® device and expand operational capacity under its NeuroNode® Only strategy.
Partially Underwritten but Subscription Uncertain
The rights issue is partially underwritten to $1.15 million by a consortium including the company’s two largest shareholders, Nightingale Partners Pty Limited and Phoenix Development Fund Limited, alongside Start Beyond Pty Limited and CEO Jeremy Steele. However, the offer is not fully underwritten, meaning there is no guarantee the full $2.06 million will be raised. Shareholders have until 15 September 2025 to accept their entitlements, with the new shares expected to be quoted on the ASX shortly thereafter.
Strategic Use of Funds
The funds raised will be allocated across several key areas – $925,000 towards NeuroStrip® development including software, testing, manufacturing, and clinical trials; $200,000 for marketing and business development; and $1.04 million for working capital and strategic investments. This targeted investment reflects the company’s confidence in capturing growth opportunities, despite some slower-than-expected customer acquisition for its NeuroBounce product in Australia and the US.
Outlook and Shareholder Impact
Control Bionics is actively negotiating distribution partnerships for NeuroNode®, with agreements anticipated in the second quarter of fiscal 2026. The company expects to secure initial customer contracts for NeuroStrip® before the end of calendar 2025, supported by positive feedback from ongoing rehabilitation trials in both the US and Australia. While the rights issue will increase the total shares on issue by up to nearly 59 million, shareholders who fully participate will avoid dilution. Substantial shareholders are expected to maintain or slightly increase their voting power, mitigating control risks.
Regulatory and Market Considerations
The rights issue is conducted under section 708AA of the Corporations Act without a prospectus, relying on continuous disclosure obligations. It is open only to shareholders with registered addresses in Australia and New Zealand, excluding overseas investors due to regulatory and cost considerations. The issue price reflects a discount of approximately 7.9% to the last closing price, aiming to incentivize participation. Investors are reminded that the new shares carry no guarantee of dividends or capital return and that investment remains speculative.
Bottom Line?
As Control Bionics pushes forward with its NeuroStrip® commercialisation, investor uptake of this rights issue will be a key barometer of confidence in its growth trajectory.
Questions in the middle?
- Will the rights issue achieve full subscription given it is only partially underwritten?
- How soon will distribution partnerships for NeuroNode® be finalised and what impact will they have on revenue?
- Can Control Bionics accelerate customer acquisition for NeuroBounce to complement its device rollout?