Capital Raising & Corporate Update

Melodiol Global Health Limited (ASX:ME1) (‘Melodiol’ or ‘the Company’) is pleased to advise it has received firm commitments to raise ~$1.08m (before costs) through the issue of approximately 106,415,113 new fully paid ordinary shares (‘Shares’) at an issue price of $0.01019 per Share (the ‘Placement’).

Highlights:

• Firm commitments received to issue 106,415,113 Shares at an issue price of $0.01019 per Share to raise $1.08m (before costs)
• Placement follows ~$21.5m in unaudited revenue achieved across the Melodiol Group in FY23 – a 141% increase on FY22, in addition to a strong start to Q1 FY24

Funds from the Placement will be used towards near term growth opportunities across select business units, corporate costs (including the potential restructure or sale of businesses representing less than 10% of overall group revenue in order to accelerate profitability), general working capital and costs of the offer.

Subject to shareholder approval, Placement participants will receive two free attaching Options for every one new Share issued. The Company intends to create a new class of options, exercisable at $0.015 per Option and a 5 year time to maturity (the “New Options”). The Company will seek to quote the attaching Options, subject to meeting ASX listing requirements. The Company intends that these New Options will be provided to the Placement participants.

At the Company’s general meeting on 23 January, the Company received shareholder approval to conduct a Placement of up to $3m at a 30% discount to the 10-day volume weighted average price (“VWAP”) prior to the Placement.

The issue price of the new Shares from the Placement represents a 30% discount to the 10-day VWAP of

$0.014564 and therefore the Placement Shares will be issued based on the prior receipt of shareholder approval.

As previously disclosed to the market, the Company has taken steps to rationalise non-core assets in its portfolio, including the temporary pause of operations at Halucenex, Sierra Sage Herbs, and impACTIVE. Melodiol remains focused on accelerating a cash flow positive state via execution at both Mernova and Health House International, which represented 93% of group revenue (based on Q3 FY23).

In addition to these efforts, the Company continues to entertain possible additional sources of capital in addition to the proposed placement, and possible divestment of non-core and core assets. The Company may also consider steps to convert existing secured debt to equity as part of this process.

Management commentary:

CEO and Managing Director, Mr William Lay said: “I would like to take this opportunity to thank investors for their support of this Placement. This new capital comes at a critical juncture as the Company continues to drive strong operating results at Mernova and HHI. We look forward to providing updates on continued progress at these business units in due course.”

Lead Manager:

Oakley Capital Partners Pty Ltd (“Oakley”) acted as lead manager to the Placement. Oakley will earn a 6% fee on the gross cash amount raised by Oakley under the Placement. Subject to shareholder approval, this fee will be paid in shares (based on the placement price) with a one for one attaching New Option. Subject to shareholder approval, Oakley will also receive 25m Broker Shares, and 25m Broker New Options, if feasible. If the issue of these Options is not feasible, the Company has agreed to work with Oakley on a best efforts basis to come to an alternate arrangement. Where shareholder approval is not received, the cash equivalent of fees will be payable.

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