Announcement PDF DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Prospectus Imagion Biosystems Limited ACN 616 305 027 Placement of 242,000 Convertible Notes with a face value of $1.00 per Convertible Note and a subscription price of $0.90909 to raise a maximum of approximately $220,000 before costs and grant of 2,048,122 Options (Offer) This is an important document and should be read in its entirety. If, after reading this document, you have any questions about the securities being offered for issue under it or any other matter, you should contact your stockbroker, solicitor, accountant or other professional adviser. This is a transaction-specific prospectus issued in accordance with section 713 of the Corporations Act 2001 (Cth) and ASIC Corporations (Offers of Convertibles) Instrument 2016/83. DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Table of contents IMPORTANT NOTICES --------------------------------------------------------------------------------------- 1 Letter from the Chair ---------------------------------------------------------------------------------------- 1 1 Investment overview ------------------------------------------------------------------------------- 2 2 IBX – the business ---------------------------------------------------------------------------------- 5 3 Details and effect of the Offer --------------------------------------------------------------------- 5 4 How to apply ---------------------------------------------------------------------------------------- 8 5 Financial information ------------------------------------------------------------------------------- 9 6 Risk factors ---------------------------------------------------------------------------------------- 11 7 Material agreements ----------------------------------------------------------------------------- 15 8 Additional information --------------------------------------------------------------------------- 19 Glossary ---------------------------------------------------------------------------------------------------- 24 Corporate directory --------------------------------------------------------------------------------------- 25 | Prospectus DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 IMPORTANT NOTICES General This Prospectus is dated 21 May 2024. A copy of this Prospectus was lodged with ASIC on that date. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus or the merits of any investment under this Prospectus. No Convertible Notes or Options will be allotted or transferred on the basis of this Prospectus after the expiry date. This Prospectus expires 13 months after the date of issue. No person may give any information or make a representation about the Offer, which is not in this Prospectus. Information or representations not in this Prospectus must not be relied on as authorised by the Company, or any other person, in connection with the Offer. This Prospectus provides information for investors to decide if they wish to invest in IBX. Read this document in its entirety. Examine the assumptions underlying the risk factors that could affect the financial performance of IBX. Consider these factors carefully in light of your personal financial circumstances. Seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest. The Offer does not take into account the investment objectives, financial situation or needs of particular investors. Transaction Specific Prospectus This Prospectus is a transaction specific prospectus and has been prepared in accordance with section 713 of the Corporations Act and ASIC Corporations (Offers of Convertibles) Instrument 2016/83. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers that potential investors may consult. Exposure Period The Corporations Act prohibits the acceptance of an application for, or an issue of, securities in the seven calendar day period after the date this Prospectus was lodged with ASIC. This period is the Exposure Period. The Exposure Period may be extended by ASIC by up to a further seven days. The purpose of the Exposure Period is to enable materials in the Prospectus, which relate to the offer of Convertible Notes, to be examined by ASIC and market participants before the offer may be accepted by the Investor. The Company will not accept an Application for, nor will it issue any Convertible Notes during the Exposure Period. Any Application Form received prior to the expiration of the Exposure Period will not be processed until after the Exposure Period. Risk Factors Potential investors should be aware that subscribing for Convertible Notes and Options involves a number of risks. The key risk factors of which investors should be aware of are set out in Section 6. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Convertible Notes or Options in the future (including the underlying shares). Accordingly, an investment in the Company should be considered highly speculative. Potential investors should consider consulting their professional advisers before deciding whether to apply for Convertible Notes pursuant to this Prospectus. Electronic prospectus This Prospectus is available electronically at www.imagionbiosystems.com. Electronic versions of this Prospectus should be downloaded and read in their entirety. Obtain a paper copy of the Prospectus (free of charge) by telephoning (02) 9290 9600. Applications for Convertible Notes may only be made by the relevant investor. Foreign selling restrictions No action has been taken to register or qualify the Convertible Notes, Options or the Offer in any jurisdiction outside Australia, or otherwise to permit an offering of the securities or outside Australia. The Prospectus does not constitute an offer or invitation in any jurisdiction where, or to any person to whom, the offer or invitation would be unlawful. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of those restrictions. Any failure to comply with the restrictions may constitute a violation of applicable securities laws. Each potential investor warrants and represents that they will not offer or sell the relevant securities in the United States or in any other jurisdiction outside Australia, or to a United States person, except in transactions exempt from registration under the US Securities Act 1933 as amended, and in compliance with all applicable laws in the jurisdiction in which the securities are offered and sold. This Prospectus may not be released to US wire services or distributed in the United States except by the Company to “accredited investors” (as defined in Rule 501(a) under the US Securities Act). Forward-looking statements Statements in this Prospectus may be forward looking statements. Forward looking statements can be identified by the use of forward-looking terminology such as, but not limited to, ‘may’, ‘will’, ‘expect’, ‘anticipate’, ‘estimate’, ‘would be’, ‘believe’, or ‘continue’ or the negative or other variations of comparable terminology. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The Directors’ expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis. They are based on, among other sources, the examination of historical operating trends, data in the Company’s records and other data available from third parties. There can be no assurance, however, that the Directors’ expectations, beliefs or projections will give the results projected in the forward-looking statements. Investors should not place undue reliance on these forward-looking statements. Additional risk factors that could cause actual results to differ materially from those indicated in the forward-looking statements are set out in Section 6. Privacy The Company and the share registry collect, hold and use personal information received from you to communicate and provide services to you as a Shareholder. The Company may disclose information to its agents, service providers (such as the share registry) and government bodies. The Company’s privacy policy sets out how you may access, correct and update the personal information that the Company holds about you (by contacting the share registry), how you can complain about privacy related matters and how the Company responds to complaints. Defined terms Capitalised terms used in this Prospectus are defined in the Glossary. Currency Monetary amounts shown in this Prospectus are expressed in Australian dollars unless otherwise stated. Photographs and diagrams Photographs used in this Prospectus without descriptions are only for illustration. The people shown are not endorsing this Prospectus or its contents. Diagrams used in this Prospectus may not be drawn to scale. The assets depicted in photographs in this Prospectus are not assets of the Company unless otherwise stated. | Prospectus DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 THIS DOCUMENT IS IMPORTANT AND SHOULD BE READ IN ITS ENTIRETY | Prospectus 2 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Letter from the Chair 21 May 2024 Dear Investor, This Prospectus relates to a private placement to Mercer Street Global Opportunity Fund, LLC (Investor or Mercer), as announced by the Company today, of up to 242,000 convertible notes in the Company (Convertible Notes) to raise up to approximately $220,000 (Placement), and the grant of 2,048,122 Options with an exercise price of $0.11284 each. The Company is drawing down on the Mercer facility, which was first announced on 7 March 2023. Please refer to the Company's announcement today, for further information in relation to the drawdown of the Mercer Convertible Securities. The Company has undertaken the Placement for the purposes of funding the Company’s short-term working capital requirements. Given the previous suspension of the Company’s Shares in the preceding 12 months, this Prospectus has been prepared primarily for the purpose of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of any Shares upon the conversion of the Convertible Notes issued under the Placement and in relation to the granting of the Options. The Offer is only available to the Investor who is participating in the Placement announced by the Company today and who has been personally invited to accept the Offer. An Application Form will be provided to the Investor only. I encourage you to read this Prospectus and the information referred to in it in its entirety before making an investment decision. Yours faithfully Robert Proulx Chair | Prospectus DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 1 Investment overview 1.1 Summary offer details Terms of offer Details Face value per Convertible Note $1.00 Subscription price per Convertible Note $0.90909 Total number of Convertible Notes on issue 3,550,000 Total number of Convertible Notes offered under the Placement 242,000 Total maximum amount to be raised under the Placement (approximately) $220,000 Approximate total number of Convertible Notes after completion of the Offer 3,792,000 Number of Options to be granted 2,048,122 1.2 Important dates Event Date Prospectus date 21 May 2024 Opening date * 28 May 2024 Closing Date (5:00pm AEST) * 29 May 2024 Anticipated date of allotment of Convertible Notes and issue of Options 29 May 2024 Statements expected to be despatched 31 May 2024 All dates and times are subject to change and are indicative only. All times are to AEST. The Company reserves the right to vary these dates and times without notice. *Opening and Closing dates are subject to the Exposure Period. ASIC may extend the Exposure Period by up to seven calendar days in which case the opening date for the offer and other dates may be varied accordingly without notice. 1.3 Purpose of the Offer and use of funds Proceeds from the issue of the Convertible Notes will be applied principally to fund the Company's short-term working capital requirements and payment of debts. No funds are raised from the grant of the Options. 1.4 Shareholding structure The following table shows the shareholding structure of IBX on completion of the Offer: Existing Shares on issue 32,646,551 Existing Convertible Notes on issue 3,550,000 Existing options on issue 3,304,490 Convertible Notes to be issued under the Offer | Prospectus 242,000 2 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Options to be issued under the Offer 2,048,122 Total number of Convertible Notes after completion of the Offer 3,792,000 Total number of options after completion of Offer 1.5 5,352,612 Potential questions and answers Question Answer Section Who is the issuer of this Prospectus? Imagion Biosystems Limited ACN 616 305 027 Not applicable What is the Offer? The Offer is placement of up to 242,000 Convertible Notes with a face value of $1.00 per Convertible Note and a subscription price of $0.90909 to raise a maximum of approximately $220,000 before costs and the grant of 2,048,122 Options. section 3.2 What is the Face Value of the Convertible Notes? The Convertible Notes are being issued with a face value of $1.00 per Convertible Note. section 3.2 What rights and liabilities attach to the Convertible Notes? The Convertible Notes are being issued pursuant to the Mercer Convertible Securities Agreement and on the same terms as the First, Second and Third Tranche Convertible Notes. section 7.2 What rights and liabilities attach to the Options? The Options are being issued pursuant to the Mercer Convertible Securities Agreement and on the same terms as the previous options granted under that agreement. section 8.3 What is the Company’s financial position? The Company’s financial position is set out in detail in section 5 of this Prospectus. section 5 What risks are involved with an investment in the Company? An investment in IBX is subject to both general and specific risks which you should consider before making a decision to apply for Convertible Notes. Key specific risks include: sufficiency of funding, impact of COVID19, product risk, commercialisation risk, regulatory risk, product liability, dependence on service providers and third-party collaborators, reliance on key personnel, intellectual property, competition risk, currency risk, requirement to raise additional funding, going concern and insurance. section 5.1 Is the Offer underwritten? The Offer is not underwritten. section 3.1 Further questions If you have questions about the Offer, please contact the Company Secretary on +61 3 9692 7222. section 3.11 1.6 Key features of the Convertible Note The Convertible Notes are being issued on the same terms as the First, Second and Third Tranche Convertible Notes. | Prospectus 3 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Matter Particulars Who is the issuer? Imagion Biosystems Limited ACN 616 305 027. Type of instrument Secured convertible notes convertible into fully paid ordinary shares at the Conversion Price. Denomination AUD. Face Value The face value of each Convertible Note is $1.00. Maturity Date 18 months from date of issue. Interest payable No interest is payable on the unconverted drawn funds. In the event of a default by the Company, the Company must pay interest at a rate of 15% per annum on the Face Value of all outstanding Convertible Notes. Conversion The Investor may (at its absolute discretion) convert any Convertible Notes at any time prior to the Maturity Date, by giving the Company a conversion notice, provided such conversion is for a Face Value in an amount equal to or greater than $25,000 (unless the remaining Face Value of the Convertible Notes on issue is less than $25,000, in which case for the full remaining value). Conversion Price The higher of: i. 90% of the lowest daily VWAP (volume weighted average price) of the Shares for the 15 trading days on which Shares traded in the ordinary course of business on the ASX ending on the date immediately prior to the relevant conversion notice; and ii. a floor price of $0.50. The Face Value of any unconverted Convertible Notes and any accrued by unpaid interest are repayable by the Company: i. within 20 business days of the Maturity Date; and ii. if an event of default is subsisting after 10 business days of the Company receiving a notice of default from the Investor, within 10 business days after the end of such notice period. Repayment The Investor may also require repayment by the Company of the Convertible Notes upon occurrence of a change of control, a delisting or a qualifying capital raising which in aggregate raises $10,000,000 or more. Events of Default Standard events of default apply, including but not limited to an insolvency event or material adverse effect occurring, or the Company being in breach of any obligation, covenant or undertaking to the Investor and the breach not being rectified within 5 business days. Voting The Convertible Notes do not entitle the holder to any voting rights. Governing Law Queensland, Australia 1.7 Important notice This section is not intended to provide full details of the investment opportunity. The Investor must read this Prospectus in full to make an informed investment decision. The Convertible Notes and Options offered under this Prospectus carry no guarantee of return of capital, return on investment, payment of dividends or on the future value of the Shares. | Prospectus 4 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 2 IBX – the business 2.1 Board and management team Mr Robert Proulx Executive Director Robert Proulx was appointed as an Executive Chairman on 6 December 2016. Mr Proulx has over 25 years' experience bringing life science and medical device products through development and commercialisation and joined the predecessor company, Senior Scientific as President and Chief Operating Officer. Mr Michael Harsh Non-Executive Director Michael Harsh was appointed as a Non-Executive Director on 28 February 2017. Mr Harsh has over 37 years' service to GE, mostly with GE Healthcare on his resume, Michael Harsh is extraordinary fluent in the complex processes of transforming high-potential platform technologies into successful medical diagnostic products. Mr David Ludvigson Non-Executive Director David Ludvigson was appointed as non-executive director on 8 March 2017. Mr Ludvigson is a director (formerly President and CEO) of Nanomix, Inc, a mobile diagnostics company. Previously, David held executive leadership positions with Nanogen, Matrix Pharmaceutical, IDEC Pharmaceuticals, MIPS Computer Systems, and other high-tech companies. He began his career at Price Waterhouse. Mr Mark Van Asten Non-Executive Director Mark Van Asten was appointed as non-executive director on 6 December 2016. Mr Van Asten was the managing director and founder of Diagnostic Technology Pty Ltd, Mark has been responsible for the development, introduction, and mainstream healthcare adoption of technologies throughout Australia and Asia. Mark has also held several director-level business development positions with US and Australian diagnostics corporations. 3 Details and effect of the Offer 3.1 Purpose of prospectus The Company has been suspended from trading on the ASX for more than 5 days in the last 12 months and as a result was precluded from issuing a 'cleansing' notice in accordance with section 708A(5) of the Corporations Act to ensure the any fully paid ordinary shares in the capital of the Company (Shares) issued on the conversion of the Convertible Notes issued under this Prospectus, and the Options are not subject to on-sale restrictions. This Prospectus will remove the on-sale restrictions. 3.2 Overview The Offer is placement of up to 242,000 Convertible Notes with a face value of $1.00 per Convertible | Prospectus 5 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 Note and a subscription price of $0.90909 to raise a maximum of approximately $220,000 (before costs including fees paid to advisers and to providers of specific services to cover share registry, printing and postage costs), and for the grant of 2,048,122 Options with an exercise price of $0.11284 each. The Board intends to use the proceeds of the Convertible Notes to fund its short-term working capital requirements. The Offer is only available to the Investor who is participating in the placement announced by the Company today and who has been personally invited to accept the Offer. An Application Form will be provided to the Investor only. The Applicant should be aware that an investment in IBX involves risks. The key risks identified by IBX are set out in section 5.1 of this Prospectus. 3.3 Underwriting The Offer is not underwritten. 3.4 Purpose of the Prospectus This Prospectus has been prepared primarily to facilitate the secondary trading of any Shares issued on the conversion of the Convertible Notes issued under this Prospectus, and the Options. Only the Investor is eligible to receive Convertible Notes and Options under this Prospectus. 3.5 Impact on control The issue of the Convertible Notes and Options under this Prospectus is not expected to have any material effect on the control of the Company. However, the principal effect of the issue of the Convertible Notes on the Company will be: a) the satisfaction of the Company's obligations under the CSA; b) an increase in the number of unquoted Convertible Notes on issue from 3,550,000 to 3,792,000; c) increase in the number of options issued in the capital of the Company by 2,048,122 options; d) the Company having an increase in liability for the aggregate amount of the Face Value (and any accrued but unpaid interest) of the Convertible Notes issued under the CSA; e) if the Convertible Notes issued under this prospectus are converted at the lowest possible conversion price (being $0.50), a maximum increase in the number of Shares by 484,000 Shares; and f) if the Options are exercised, a maximum increase in the number of Shares by 2,048,122 Shares (plus receipt of approximately $231,110 being the aggregate exercise price of the Options). 3.6 Financial position The effect of the Offer on the financial position of the Company is set out in section 5. | Prospectus 6 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 3.7 Taxation considerations The taxation consequences of an investment in the Company depend upon your particular circumstances. You should make your own enquiries about the taxation consequences of an investment in the Company. If you are in doubt about the course you should follow, you should consult your accountant, stockbroker, lawyer or other professional adviser. 3.8 United States This Prospectus does not constitute a general offer to sell, or the solicitation of an offer to buy, any securities in the United States. The Offer or the Convertible Notes have not been, nor will be, registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the United States. This Prospectus may not be released to US wire services or distributed in the United States except by the Company to “accredited investors” (as defined in Rule 501(a) under the US Securities Act). The Convertible Notes and Options will only be offered and sold outside the United States in 'offshore transactions' as defined in and in reliance on Regulation S under the U.S. Securities Act. 3.9 Foreign selling restrictions No action has been taken to register or qualify the Convertible Notes, Options or the Offer in any jurisdiction outside of Australia and New Zealand, or otherwise to permit a public offering of the Convertible Notes outside Australia and New Zealand. The Prospectus does not constitute an offer or invitation in any jurisdiction where, or to any person to whom, the offer or invitation would be unlawful. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of those restrictions. Any failure to comply with the restrictions may constitute a violation of applicable securities laws. The Applicant warrants and represents that they will not offer or sell the Convertible Notes or Options in the United States or in any other jurisdiction outside Australia or New Zealand, or to a United States person, except in transactions exempt from registration under the US Securities Act 1933 as amended, and in compliance with all applicable laws in the jurisdiction in which the Convertible Notes or Options are offered and sold. The Applicant warrants and represents that they have not and will not send any materials relating to the Offer to any person in the United States or a person acting for the account or benefit of a person in the United States 3.10 Withdrawal The Company reserves the right to withdraw the Offer, at any time before the allotment of Convertible Notes or grant of the Options. If the Offer does not proceed, the Application Money will be refunded. No interest will be paid to the Investor on any Application Money refunded because of the withdrawal of the Offer. 3.11 Enquiries If you have questions about the Offer, please contact the Company Secretary on +61 3 9692 7222. | Prospectus 7 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 4 How to apply 4.1 Applying for Convertible Notes The Offer is only available to the Investor who is participating in the Placement announced by the Company today and who has been personally invited to accept the Offer. An Application Form will be provided to the Investor only. A completed Application Form for Convertible Notes must be mailed or delivered to the Company by the Closing Date set out in section 1.2 in accordance with the instructions provided by the Company to the Investor. The Opening Date and Closing Date for the Offer (as set out in section 1.2) are indicative only and subject to change without notice. The Company may vary these dates, including to close the Offer early, extend the Closing Date or to withdraw the Offer at any time prior to issue. If any of the dates are changed, subsequent dates may also change. You are encouraged to lodge your Application Form as soon as possible after the opening date. 4.2 Payment The consideration for the Convertible Notes is payable in full on application. The Company will contact the Investor with details regarding how payment can be made. 4.3 Application Form is binding A completed and lodged Application Form, or a payment made through BPAY or directly to the Company, constitutes a binding offer to acquire Convertible Notes and Options on the terms of this Prospectus and cannot be withdrawn. If the Application Form is not completed correctly it may still be treated as a valid application. The Directors’ (or their delegates’) decision whether to treat an acceptance as valid and how to construe, amend or complete the Application Form is final. By completing and returning an Application Form with the requisite Application Money or making a payment by BPAY or directly to the Company, you will also be taken to have acknowledged, represented and warranted on behalf of each person on whose account you are acting that you: (a) are not a person to whom it would be illegal to make an offer or issue Convertible Notes or Options under the Offer; and (b) acknowledge that the Convertible Notes and Options have not been, and will not be, registered under the US Securities Act of 1933 or under the laws of any other jurisdiction outside Australia or New Zealand. 4.4 Validity of Application Forms By completing and lodging an Application Form received with this Prospectus, the Applicant represents and warrants that the Applicant has personally received a complete and unaltered copy of this Prospectus before completing the Application Form. The Company does not accept a completed Application Form if it has reason to believe the Applicant has not received a complete copy of the Prospectus or it has reason to believe that the Application Form has been altered in any way. 4.5 Brokerage and Stamp Duty No brokerage fee is payable by the Applicant under the Offer. No stamp duty is payable for | Prospectus 8 DocuSign Envelope ID: 5E0274A7-DC6C-4B07-BDE4-B131761525D7 subscribing under the Offer. 4.6 Information Availability The Applicant can obtain a copy of this Prospectus from IBX’s website at www.imagionbiosystems.com or by calling the share registry on 1300 737 760 (within Australia) and +61 9290 9600 (outside Australia) at any time from 8.30am to 5.00pm (AEST) until the Closing Date. 5 Financial information 5.1 Historical and pro forma consolidated balance sheet as at 31 December 2023 Set out below is a summary of the historical financial information for IBX as at 31 December 2023 (Historical Financial Information) and a pro-forma historical statement of the financial position as at 31 December 2023 (Pro Forma Historical Financial Information) (collectively, Financial Information). The Financial Information has been prepared to illustrate the effect of the Of