Melodiol Global Health has raised a further A$215,000 through the issue of 167 million shares, as it revealed talks are taking place over the potential sale of “various core assets”.
The development emerged as the firm again warned it will need further capital “in the near term” as it strives to become cashflow breakeven.
The share placement, at a price of $0.001285 cents per share, follows a $1m raise in October and $232,000 last month.
Those placements saw the issue of 348m shares – up from 200m after the initial offer was re-priced – and 116m shares respectively.
Shareholders agreed at the firm’s annual general meeting in October to raise up to $3m through placements.
In an update to the ASX, Melodiol said its core businesses – Mernova and Health House International – had demonstrated “strong operating results during FY23”.
But it reiterated its need to raise more cash, with “additional sources of capital” being explored.
Melodiol has made no secret of its desire to offload non-core subsidiaries to raise capital and last month even flagged the possibility of selling “core assets”.
Following on from that, the firm revealed in its update this week that it received an offer in December from a party related to director Jodi Scott to acquire “various core assets of the company for a cash consideration”.
While the non-binding proposal was not executed, and the deadline for signing a proposed agreement has passed, Melodiol said it is “evaluating the proposal and [is] continuing conversations with the counterparty”.
“[The company] will provide updates in due course if necessary,” Melodiol said.
Scott is the co-founder of Sierra Sage Herbs, a subsidiary it has been looking to offload.
Despite the need for further capital, the firm remained bullish about Mernova, with the division generating unaudited revenue of $2.13m in Q4, up 15% from Q3 and double Q4 FY22.
It took FY23 revenue to $7.11m, up 51% on FY22. Group sales for the year are likely to exceed $20m, an increase of 129% on the previous year.
Chief executive William Lay said: “The success of Mernova continues to validate Melodiol’s stated strategy to achieve growth through targeted M&A, leveraging the expertise and experience of the board and management team in identifying key trends in the market globally for cannabis and other plant-based healthcare products.”
The full-year performance of distribution arm Health House is expected to be released soon.
