Bod Science has announced details of a placement to raise more than A$2 million alongside cost-cutting measures that will see its senior team take a pay cut.

The firm, which has been in a trading halt since last week, told the ASX it has received firm commitments to raise $2.05m under a two-tranche placement at an offer price of $0.03 cents per share.

Jo Patterson: Bod has “a robust commercialisation pipeline”.

It also detailed a cost-reduction program, with non-executive directors accepting shares in lieu of cash (subject to shareholder approval) and CEO Jo Patterson and Chief Technical Officer Craig Weller reducing their annual salaries to $125,000 each.

Both moves will remain in place until Bod achieves positive sustainable cashflow without the need to raise more capital, although the company did not rule out going back to the market if necessary.

Tranche one of the placement will raise $800,000 via the issue of 26.6 million shares utilising the company’s available capacity under ASX listing rules.

Tranche two will raise a further $1.25m via the issue of 41.7 million shares (including the proposed issue of one million shares, valued at $30,000, to Patterson) subject to shareholder approval.

The offer price of $0.03 cents per share represents a 46.6% discount on the last traded price on October 31, 2023 ($0.056 cents). Shares are currently trading at $0.031 cents, down 44.6%.

Bod’s Malaysian partner Antah Healthcare Group has supported the placement through a commitment of $1.1m worth of shares (36.67 million), which would give it a 14.9% stake in the company on completion. 

Funds will be used to build Bod’s THC flower inventory, at a cost of $500,000, the manufacture of Medicabilis soft-gel capsules and preparation of a TGA Schedule 3 dossier ($600,000), R&D for its Aqua Phase technology ($150,000), plus working capital and the costs of the placement ($800,000).

Bod said it also expects to receive approximately $800,000 in December relating to R&D claims.

In the quarter ending September 30, the company’s operational cashflow was a loss of $1.9m. Bod told the ASX it is “focused on achieving operational cashflow breakeven, which requires a significant and sustained turnaround in trading performance”.

Post transaction, the company’s pro-forma cash balance (as at September 30) will be $2.17m.

Patterson said: “We are pleased with the support received from both new and existing shareholders for this placement, especially in difficult market conditions. Bod is at an exciting stage with a robust commercialisation pipeline.

“I’d like to take this opportunity to thank existing shareholders, and welcome new investors to the Bod Science register. In particular, I’m pleased to welcome Antah Healthcare as a strategic investor in Bod and I’m excited about the potential to explore commercial opportunities with them in a large and growing market.”

Prior to launching Cannabiz, Martin was co-founder and CEO of Asia-Pac’s leading B2B media and marketing information brand Mumbrella, overseeing its sale to Diversified Communications in 2017. A journalist...

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