Melodiol To Streamline Portfolio With Up To A$30M Asset Sale To Us Listed Panacea – Maintaining Significant Stake In Spin-Off Vehicle

Melodiol Global Health Limited (ASX:ME1, FRA:1X8) (‘Melodiol’ or ‘the Company’), is delighted to announce a non-binding Letter of Intent (LOI) with the US-based entity, Panacea Life Sciences Holdings, Inc. (‘Panacea’) (OTCQB: PLSH). The LOI pertains to the divestment of two of Melodiol's prominent business units, Sierra Sage Herbs, LLC ("SSH") and Halucenex Life Sciences Inc. ("Halucenex"), for an up-front aggregate consideration of approximately U$5m in cash and scrip. The LOI also includes an additional US$15m in earn-out clauses, which if met, will provide additional value to Melodiol.

Highlights:

• Melodiol secures a non-binding LOI with Panacea Life Sciences Holdings, Inc. (‘Panacea’) (OTCQB: PLSH), a US company specialising in manufacturing, R&D, and distribution of high-quality, GMP-certified health & wellness products, for the sale of Sierra Sages Herbs, LLC (‘SSH’) and Halucenex Life Sciences Inc. (“Halucenex”) for an initial approximate US$5m in cash and scrip
• LOI includes additional earn-out components valued at up to US$15m, which will allow Melodiol to further increase its shareholding in Panacea should conditions be met following SSH’s potential revenue growth
• Panacea's recent operational progress includes acquisitions of eight retail locations offering VAPE and CBD products in Tampa, Florida, generating US$2.9m of annual revenues for the fiscal year ended 31 Dec 2022, and a research collaboration with Colorado State University’s Cannabinoid Research Centre (CRC)
• Panacea, through its diverse trademark portfolio (PANA Health, PANA Beauty, PANA Sport, PANA Pet, & PANA Life), operates across the entire cannabinoid value chain and achieved significant customer growth during Q1 CY2023
• Panacea is headquartered in Golden, Colorado where it operates a sophisticated 51,000 square foot, cGMP-certified facility
• Melodiol's divestment of SSH and Halucenex allows for concentration on group profitability, via the substantial growth at Health House International and Mernova Medicinal Inc., with the purchase price including US$2m in cash and the balance in Panacea common stock, promising further upside potential
• Post-transaction, Melodiol will be the largest shareholder in Panacea, enabling a strategic expansion into the US market. This aligns with the Company’s long stated objective to increase exposure to US capital markets
• Panacea's expertise will aid in the growth of SSH and Halucenex, significantly reducing Melodiol’s cash burn, and allowing ME1 to focus on accelerating the group’s near term profitability
• Transaction enables Panacea, a complementary US specialist business, to collaborate with SSH and Halucenex, driving growth and pursue cash flow positivity for SSH via potential synergies. Additionally, if completed, it would secure continued funding for Halucenex's progression into successful Phase II and forthcoming Phase III trials. This strategic move would also significantly decrease Melodiol's cash burn
• Consideration of A$30m highlights management’s view of Melodiol’s operating subsidiary value – further value accretive transactions for shareholders are also being explored

Panacea’s Extensive Product Suite

Its subsidiary, Panacea Life Sciences, Inc., driven by strong female leadership, prides itself on the research, production, and distribution of the highest-quality nutraceutical, cannabinoid, mushroom, kratom, and other natural, plant-based products. Panacea operates from a sophisticated 51,000 square foot, cGMP- certified facility in Golden, Colorado, ensuring unparalleled quality standards.

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