Visiomed aims to raise $1.6m

Perth-based biomedical devices developer Visiomed Group (ASX:VSG) is aiming to raise AUD$1.6 million after costs through a placement of up to 90 million shares at $0.02 each.

Visiomed is developing a paediatric asthma spacer called the Funhaler and the funds raised will be used as working capital to expand overseas distribution of the device into the US and European markets.

"The Funhaler is selling here in Australia and we recently signed a distributor in Singapore and sales are starting over there," said Visiomed CEO Dr William Dolphin. "But in order to go ahead with the large scale markets, such as the US, Europe and Japan we do need the resources."

EG Capital is assisting Visiomed in the capital raising and a prospectus is expected to be lodged in the next two days.

Convertible notes

Visiomed also recently raised $280,000 from the issue of redeemable convertible notes to current shareholders. A total of 28 notes with a face value of $10,000 were issued to investors and the proceeds will be used to redesign and upgrade the tools used to manufacture the Funhaler.

Dolphin said that the money raised will "cover retooling, to bring down the costs and increase the manufacturing scale."

The changes in manufacturing should occur by the latter part of April, said Dolphin, "that's the time we want to be able to go to the US and Europe."

Market

When asked what the response has been from the market to the raising, Dolphin said it was "mixed".

"The biotech sector has not been a star performer in the last several years, so that certainly hurts us," said Dolphin, who joined Visiomed in April. "My hope is that the market will start to recognise what we have, namely a real product, with real revenues and real opportunity into a very large market," he said.

Visiomed's shares were trading at $0.022 at the time of writing, down $0.001 since the market opened this morning.