Bod Science has outlined the details of a share placement targeting more than A$2 million in fresh capital, paired with a cost-reduction program that includes pay cuts for its most senior executives.
The company, which has been in a trading halt since last week, disclosed to the ASX that it has secured firm commitments totalling $2.05m through a two-tranche placement priced at $0.03 cents per share.
The announcement also covered a cost-reduction program under which non-executive directors will receive shares instead of cash payments — pending shareholder approval — while CEO Jo Patterson and Chief Technical Officer Craig Weller will each have their annual salaries reduced to $125,000.
Both measures will stay in effect until Bod reaches positive sustainable cashflow without requiring further capital raises, though the company left open the possibility of returning to the market if conditions demand it.
The first tranche of the placement will generate $800,000 through the issue of 26.6 million shares, drawn from the company's available capacity under ASX listing rules.
The second tranche will bring in an additional $1.25m via 41.7 million shares — including a proposed issue of one million shares valued at $30,000 to Patterson — subject to shareholder approval.
The $0.03 cents offer price is a 46.6% discount to the last traded price on October 31, 2023 ($0.056 cents). Shares are currently changing hands at $0.031 cents, a decline of 44.6%.
Bod's Malaysian partner Antah Healthcare Group has backed the raise with a $1.1m commitment for 36.67 million shares, which would give it a 14.9% stake in Bod upon completion.
The proceeds are earmarked for building Bod's THC flower inventory ($500,000), manufacturing Medicabilis soft-gel capsules and preparing a TGA Schedule 3 dossier ($600,000), R&D related to its Aqua Phase technology ($150,000), and working capital plus placement costs ($800,000).
Bod also anticipates receiving approximately $800,000 in December from R&D claims.
For the quarter ending September 30, the company recorded an operational cashflow loss of $1.9m. Bod said to the ASX it is "focused on achieving operational cashflow breakeven, which requires a significant and sustained turnaround in trading performance".
Following the transaction, the company's pro-forma cash balance as at September 30 will stand at $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."
