Convertible Note Facility Poses Dilution Risks as BCAL Seeks Growth Capital

Capital Raise to Support Growth

BCAL Diagnostics Limited (ASX – BDX), an Australian biotech company focused on early multi-cancer detection, has announced the establishment of a $10 million convertible note facility. This funding mechanism is designed to provide the company with flexible working capital to support its commercialisation strategy and upcoming clinical milestones.

Already, BCAL has secured firm commitments for $5 million of the facility, with the potential to raise the full $10 million subject to shareholder approval at the Annual General Meeting scheduled for 26 November 2025. The convertible notes will be issued as partly paid instruments, offering BCAL the ability to call payments over time until August 2026.

Favourable Terms and Strategic Flexibility

The notes carry a 10% annual interest rate, capitalised annually, and mature two years from issue. Importantly, noteholders have the option to convert their notes into ordinary shares at a discount to the 28-day volume weighted average price (VWAP), with discounts ranging from 20% to 25% depending on timing. Conversion prices are capped at a maximum of A$0.30, providing some protection against excessive dilution.

BCAL’s CEO Shane Ryan highlighted the strategic importance of this facility, stating it provides vital capital flexibility at a pivotal growth stage. The funding will enable BCAL to progress its commercialisation pathway, deliver clinical and market milestones, and expand its pipeline of high-value cancer detection tests.

Advancing Cancer Detection Technologies

BCAL holds an exclusive licence to distribute ClearNote Health’s pancreatic and ovarian cancer blood tests in Australia and is developing BREASTEST plus™, a non-invasive test aimed at improving breast cancer screening outcomes for women with dense breast tissue. The new capital injection is expected to accelerate these initiatives, positioning BCAL to better compete in the growing precision diagnostics market.

While the notes are unsecured, they are supported by a negative pledge, and BCAL retains the option to prepay the notes partially or fully, subject to conversion rights. This structure balances investor protections with company flexibility.

Looking Ahead

With shareholder approval pending, the convertible note facility marks a significant step in BCAL’s funding strategy. The company’s ability to convert debt into equity at a discount could influence its capital structure and share price dynamics in the near term.