Genesis Biomedical reveals details of $1m rights issue

Genesis Biomedical (ASX:GBL) will be undertaking a non-renounceable rights issue to raise about AUD$1 million.

Nearly 29 million shares will be offered at AUD$0.035, with one rights issue share offered for every three shares held in Genesis. A free attaching rights issue option will also be offered for every rights issue share subscribed for. The rights issue options exercise price is $0.06 and the exercise period is three years from the date of issue.

The money from the capital raising will be used to fund Genesis' recent transaction with privately owned New Zealand based Manawatu Biotech Investments (MBI) in which Genesis agreed to provide MBI with a loan facility of up to AUD$250,000. Genesis has the right to purchase the entire issued capital of MBI for AUD$450,000 within a 12-month period, comprising $200,000 in cash and $250,000 equity in Genesis.

The funds will also be used to continue the development of CellGen, a product that stimulates growth of bone and soft tissue by replicating the bioelectrical signals normally produced during physical during physical exercise.

Genesis also plans to appoint new management and an advisory committee, including a CEO, and the capital raised will be used for this, as well as funding other commercial opportunities and general workings of the company.

Genesis is in discussions about the underwriting of the rights issue, with the possibility that the company's directors may step forward to underwrite a portion of the shortfall.

Completed rights issue documentation will be provided to shareholders before August 31.

Shares in Genesis were trading at $0.035 at the time of writing.