visioneering technology (ASX:VTI) has announced plans to delist from the Australian Securities Exchange (ASX), with a vote on the proposal scheduled for a special general meeting on 10 January 2025. The Company’s Board of Directors believes that delisting is in the best interest of the Company and its security holders. They cited challenges related to liquidity, valuation and administrative costs.

Visioneering Technologies is a U.S.-based medical device company that develops and markets innovative contact lenses and vision correction products. The company is known for its unique NaturalVue multifocal contact lenses. This contact lens is designed to address the progression of myopia (myopia) in children as well as presbyopia (age-related loss of the ability to focus on nearby objects) in adults. The company’s products are sold in global markets, with a special focus on North America and the Asia Pacific region.

The delisting move has in principle been approved by the ASX, and the delisting is expected to take place within one month of shareholder approval. Trading in the company’s CHESS Depositary Interest (CDI) will be suspended from February 6, 2025, with final delisting scheduled for February 10, 2025.

**Reason for delisting**

The reasons for the company’s delisting are as follows.

  • Valuation Issues: Visioneering’s board of directors noted that CDI’s value often diverges from company announcements, suggesting that the market does not fairly value the business. This mismatch made the issuance of shares even more dilutive for existing security holders.
  • Challenges in raising capital: Visioneering said its low market capitalization and limited liquidity make it difficult to raise capital and attract institutional investors. The company plans to raise capital before delisting, but expects future fundraising as a private company to be less dilutive.
  • High administrative costs: The company estimates it will save at least $75,000 per month ($900,000 per year) in costs associated with ASX compliance, including legal, accounting, and reporting costs.
  • Illiquid and marketable parcels: As of September 20, 2024, 66.67% of security holders held parcels valued at $500 or less. This limited liquidity reduced the company’s ability to undertake corporate transactions and strategic initiatives.
  • Flexibility for Strategic Opportunities: Visioneering’s board of directors believes that as a privately held company, Visioneering has more flexibility to pursue mergers, acquisitions and other strategic opportunities. The company has already hired an M&A advisor and is holding preliminary discussions with acquisition candidates.
  • Impact on management and employees: Delisting will free up management to focus on other corporate priorities, given the perceived disconnect between the company’s value and CDI price. He argued that this would strengthen companies’ ability to attract and retain employees.

Impact on security holders

Delisting changes the way security holders trade their holdings. Once the company is delisted, CDI will no longer be traded on the ASX. Instead, they will be converted into underlying shares of Visioneering Technologies. Shareholders will receive a holding statement from Computershare, the US stock registrar, detailing their converted shares.

Without access to ASX trading, shareholders can only trade their holdings through off-market private transactions, which can be more complex and less liquid. If you wish to avoid this change, security holders are encouraged to sell their CDIs on the ASX by 6 February 2025.

next step

Upon delisting, Visioneering will no longer be subject to the ASX Listing Rules or certain provisions of Australian Companies Law. Additionally, the company will no longer be a “non-listed disclosure entity” under Australian law. This means that there is no need to comply with certain continuous disclosure obligations. However, as a company incorporated in the U.S. state of Delaware, we are still subject to Delaware General Corporation Law.

To ensure transparency, the company is committed to continuing its practice of providing annual accounts and regular business updates to security holders.

Visioneering’s share price fell 57.78% to close at 5.7 cents yesterday.