Atomo Diagnostics shakes up board and secures fresh capital to power new growth strategy

Atomo Diagnostics Limited has moved decisively to reshape its future trajectory, announcing on 24 April 2025 a successful capital raise of up to AUD 3.1 million alongside significant board and operational restructures. The integrated rapid diagnostic device maker, listed on the Australian Securities Exchange under the ticker symbol AT1, stated that the dual initiative aims to create a leaner organisation better aligned to accelerate revenue generation and positive operational cash flow.

In an announcement reflecting robust shareholder backing, Atomo Diagnostics revealed that the capital raise would be structured through a placement and a share purchase plan (SPP), collectively termed the “Capital Raising.” This strategic financial infusion is intended to reinforce Atomo’s working capital position and support its streamlined operational objectives following a comprehensive review.

What Are the Details of Atomo Diagnostics’ Capital Raising?

Atomo Diagnostics’ capital raising initiative comprises two components: a placement targeting AUD 2.1 million and a share purchase plan aiming to secure an additional AUD 1.0 million. The placement will result in the issue of approximately 112 million fully paid ordinary shares priced at AUD 0.0185 per share, accompanied by free attaching options exercisable at AUD 0.04 within three years, subject to shareholder approval.

The placement has been divided into two tranches. Tranche 1 involves raising approximately AUD 833,000 through the issuance of 45 million new shares to new and existing sophisticated investors, leveraging the company’s available placement capacity under ASX Listing Rule 7.1. Settlement and board changes tied to Tranche 1 are expected to occur on 2 May 2025.

Tranche 2, contingent upon shareholder approval, is set to raise approximately AUD 1.28 million through an additional issue of 67 million shares. Shares issued under both tranches will rank equally with existing shares, and the options issued will remain unlisted.

The share purchase plan offers eligible shareholders, based in Australia or New Zealand, the opportunity to subscribe for up to AUD 30,000 worth of new shares at the same placement price, again accompanied by free attaching options, with a targeted raise of up to AUD 1.0 million. Managing Director John Kelly has already pledged to participate fully, underscoring management’s confidence in the new strategic direction.

Why Is Atomo Diagnostics Restructuring Its Board?

In parallel with the capital raise, Atomo Diagnostics is implementing a sweeping board restructure to streamline governance and drive strategic focus. Effective 2 May 2025, Directors Ms Deborah Neff, Dr Paul Kasian, and Mr John Keith will resign from their roles. To support the company’s next phase of evolution, Mr Anthony May and Mr Patrick Cook will join as Non-Executive Directors.

Mr Anthony May brings a wealth of leadership experience, having held senior roles across international corporations such as Hoechst Germany, Microgenics Corporation USA, and Thermo Fisher Scientific. His deep expertise in pathology laboratories and the IVD (In Vitro Diagnostics) sector positions him as a strategic asset to Atomo.

Mr Patrick Cook similarly offers more than three decades of senior executive experience across medical devices and diagnostics sectors. His board-level leadership includes roles at Workplace Drug Testing Australasia and the Prostate Cancer Foundation of Australia, among others. His governance skills are complemented by Fellow status at the Australian Institute of Company Directors.

Outgoing Chairman John Keith noted that the changes, prompted by feedback during the November Annual General Meeting and consultations with significant shareholders, were vital to create a “leaner, more agile company” better suited to today’s operating environment.

How Will Atomo’s Operational Review Support Its Growth Strategy?

Atomo Diagnostics’ operational review was designed to deliver sustainable efficiencies without compromising key revenue and growth initiatives. Following the review, new cost-saving measures are projected to realise annualised savings exceeding AUD 500,000 in fiscal year 2026, in addition to the AUD 1.0 million in savings already achieved over the past 18 months.

Managing Director John Kelly stated that a rigorous prioritisation of projects and roles within Atomo would ensure the company remained focused on delivering its “most important strategic imperatives” while operating with “the leanest possible fit-for-future organisation.” He emphasised that none of the cost-cutting initiatives would impede the execution of Atomo’s revenue-driving projects, signalling a clear commitment to maintaining market momentum.

What Is the Current Sentiment on Atomo Diagnostics’ Stock?

Atomo Diagnostics Limited trades on the ASX under the symbol AT1 and is currently priced at AUD 0.02 per share, reflecting a 5% decline from the previous trading session. The company’s market capitalisation stands at approximately AUD 12.14 million, with a 52-week trading range between AUD 0.016 and AUD 0.044. This volatility highlights the market’s fluctuating confidence in the stock, driven in part by broader sector dynamics and company-specific execution risks.

Institutional ownership accounts for approximately 10.14% of the company’s shares, with significant holders including GZ Family Holdings Pty Ltd (12.5%), Dalraida Holdings Pty Limited (10.2%), and Global Health Funds, Inc. (10.1%). The general public holds 47.8% of the shares, indicating a retail-heavy investor base sensitive to operational news and financial performance updates.

Technical indicators present a moderate risk profile, with Atomo’s beta standing at 0.89, suggesting slightly lower volatility relative to the broader market. Earnings per share (EPS) remain negative at -AUD 0.0101, underscoring ongoing challenges in reaching profitability.

Consensus analyst sentiment currently rates Atomo Diagnostics stock as a ‘Hold’, with a speculative price target of AUD 0.11 — representing a substantial upside from current trading levels. While past stock performance has been weak, declining by over 36% year-to-date, the strategic capital raising, operational restructuring, and board renewal may serve as pivotal catalysts for potential recovery.

Investors are advised to monitor upcoming SPP developments, board changes, and operational execution milestones. Long-term sentiment could shift positively if the company demonstrates clear cash flow improvement and execution against its revised strategic plan. Given the retail-heavy shareholding structure, strong positive news could prompt faster sentiment swings compared to institutionally dominated stocks.

From a buy-sell-hold perspective, risk-tolerant investors may view the current levels as a speculative ‘Buy’ with an extended investment horizon, while conservative investors may prefer to maintain a ‘Hold’ stance pending stronger earnings visibility and operational traction.