Capital Raising And Debt To Equity Conversions

Melodiol Global Health Limited (ASX:ME1, FRA:1X8) (‘Melodiol’ or ‘the Company’) is pleased to advise it has received firm commitments from new and existing institutional, professional and sophisticated investors to raise cash and convert current liabilities to equity through the issue of approximately 167,445,189 fully paid ordinary shares (‘Shares’) at an issue price of $0.00821 per Share (the ‘Placement’) totalling $1.4m (before costs).

Highlights:

• Melodiol has received firm commitments to issue 167,445,189 Shares at an issue price of $0.00821 per Share totalling ~$1.4m for a cash placement and agreements to convert debt to equity
• Payment of third amortisation, totalling $270,000 under SBC Global Convertible Note facility via the issuance of 33,750,000 shares – first tranche of notes to be two thirds repaid
• Placement follows strong unaudited net sales for the combined Melodiol group of $4.74m during Q2 FY2023 – 105% gain on Q1 FY2023 and a 202% increase on the previous corresponding period
• Placement also follows recently announced LOI to sell Sierra Sage Herbs and Halucenex for a total transaction price of approximately up to A$30m, including A$3m in up front cash

Funds from the Placement will be used towards marketing and sales initiatives, and completion of pending M&A, among other activities.

Subject to shareholder approval, Placement participants will receive two free attaching listed options (ASX: ME1O), exercisable at $0.25 on or before 2 November 2024 (“Placement Options”), for every one Placement Share subscribed for and issued.

The issue price of new Shares represents a 17.9% discount to the last closing price of $0.01 on 3 August 2023, and a 24.9% discount to the 15-day VWAP being $0.011.

Management commentary:

Chief Executive Officer Mr William Lay said: “We are very pleased to have received support for this new funding. I would like to thank existing shareholders for their support, as well as welcome new investors to the register.

“The new funding will allow us to continue delivering strong revenue growth and diligently pursue group profitability. Melodiol remains very focused on its cost base, evident from the recent LOI to sell two early stage divisions for up to A$30m, while seeking additional revenue generating opportunities. We look forward to providing further updates over the coming months.”

SBC Global

The Company has agreed to repay the entire balance owing under the third amortisation payment (including interest) to SBC from the First Purchase Convertible Notes (“First Purchase”) ($270,000) in Shares, based on the terms of the Convertible Securities Agreement.

Based on the items described above, and under the terms of the Convertible Securities Agreements, the Company will issue 33,750,000 Shares to SBC as summarised in the following table, based on a Melodiol issue price of $0.008, being 93% of the lowest 1-day VWAP in the actual 10 trading days preceding a redemption.

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