MELODIOL GLOBAL HEALTH LIMITED
(formerly Creso Pharma Limited)
ACN 609 406 911
ANNUAL REPORT FOR THE
YEAR ENDED 31 DECEMBER 2023
Annual Report
For the year ended 31 December 2023
Melodiol Global Health Limited – Annual Report 2023
Contents
About Melodiol
Corporate Directory
Chairman’s Address
CEO’s Report
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
3
4
5
6
8
22
36
37
38
39
40
41
91
92
98
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About Melodiol Global Health
Melodiol Global Health Limited – Annual Report 2023
Melodiol Global Health Limited (“Melodiol”) is predominantly a global cannabis
company with operations in Canada, Europe and Australia. Melodiol strives for the
highest quality in its products. It develops, cultivates and distributes both recreational
and medical cannabis products, as well as having a medical supplies business.
www.melodiolglobalhealth.com
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Melodiol Global Health Limited – Annual Report 2023
Corporate Directory
Board of Directors
Mr Boaz Wachtel
Mr William Lay
Mrs Micheline MacKay
Ms Jodi Scott
Mr Bruce Linton
Mr Ben Quirin
Mr Peter Hatfull
Secretary
Mr Winton Willesee
Registered Office
Non-Executive Chairman
CEO and Managing Director
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Suite 5 CPC, 145 Stirling Highway
Nedlands, WA 6009
Australia
Telephone: +61 8 9389 3180
Website: www.melodiolglobalhealth.com
Stock Exchange Listings
Listed on the Australian Securities Exchange (ASX Code: ME1)
Listed on the Frankfurt Stock Exchange (FRA Code: 1X8)
Auditors
Bankers
Crowe Audit Australia
Level 24, 1 O’Connell Street
Sydney, NSW 2000
Australia
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Australia
Westpac Banking Corporation
Level 4, Brookfield Place, Tower Two
123 St Georges Terrace
Perth WA 6000
Australia
Share Registry
Automic Share Registry
Level 5, 191 St Georges Terrace
Perth WA 6000
Australia
Email: hello@automic.com.au
Telephone: 1300 288 664
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Chairman’s Address
Dear Shareholders,
Melodiol Global Health Limited – Annual Report 2023
Chairman’s Address
I am pleased to present Melodiol Global Health Limited's Annual Report and financial statements for 2023. Throughout
the year, the company has accomplished several significant milestones, demonstrating its unwavering commitment to
its defined strategy and resulting in record revenue growth.
Strategic M&A Growth
During the past year, Melodiol completed the acquisition of Health House International Limited (ASX:HHI). HHI’s
Australian business is a leading distributor of medical cannabis products in the rapidly growing Australian market.
Additionally, HHI’s European business operates a medical supplies distribution channel. The acquisition of HHI was
highly significant for Melodiol, as it allowed the Company to increase its geographical diversification and significant
expand its revenue base.
Overall, Melodiol's M&A activities, combined with its core existing operating divisions, have enabled the company to
build a strategic portfolio of businesses that have the potential to generate significant revenue growth and potential
near-term profitability.
Organisational Structure & Efficiency
The Board and management have been focusing on stringent cost management initiatives across the company's
divisions. The Boards overarching objective is for the Company to reach a state of cash flow positive as soon as practically
possible. This strategy hinges on revenue growth, corporate cost optimisation, and the rationalisation of business units
that produce a drag on cash flow.
During the course of the year, revenue from core operating units grew substantially, while non-core operating units
Sierra Sage Herbs, LLC, impACTIVE Ltd. and Halucenex Life Sciences were discontinued. These businesses were at a life
cycle stage that was capital intensive while having limited contribution to the group’s revenue profile.
The rationalisation of these business units, combined with the strong growth observed at both Mernova and HHI are
expected to assist the company in achieving its overarching objectives.
In conclusion, the Board expresses its gratitude to all of the dedicated employees, fellow directors, and shareholders
for their ongoing support throughout 2023. The company's strong leadership team, diverse operations, and expanding
international presence positions it well for continued growth and success in the years to come.
Yours faithfully,
Signature
Mr Boaz Wachel
Non-Executive Chairman
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CEO’s REPORT
Melodiol Global Health Limited – Annual Report 2023
I would like to thank all shareholders for their ongoing support of the company and invite you to read the full Annual
Report.
I am very pleased to report on Melodiol’s progress for the 2023 fiscal year, which was a transformative year for the
company.
Due to the hard work of our talented global teams and a significant acquisition, Melodiol was able to report a record
year for revenue of $21,564,000, an increase of 148% on prior revenue from the 2022 fiscal year. Additionally, Adjusted
EBITDA loss improved to $13.8 million in 2023 vs. $17.6 million in 2022 (21.6% loss reduction) from operations. The
Company is committed to continuously reducing operating expenses and increasing revenues to contribute to further
improvements in Adjusted EBITDA in 2024.
Melodiol Global Health Limited is pleased to provide the following report detailing the considerable progress achieved
during 2023 (“FY2023”). These milestones have allowed the Company to continue its transition to an international global
cannabis company with the future achievement of business unit profitability being a core focus. Over the course of the
year, not only did the Company materially increase revenue, but it also reduced costs across the entire business, and
this effort remains ongoing.
Financial summary:
Summary of revenue by operating division
Operating Division
Mernova Medicinal Inc.
Sierra Sage Herbsi
Creso Pharma Switzerland
Health House International
Total sales of products
2023
$000’s
6,936
2,643
538
11,447
21,564
Change
58%
8%
-71%
n/a
148%
2022
$000’s
4,390
2,453
1,846
-
8,689
Change
21%
n/a
-28%
-
40%
2021
$000’s
3,638
-
2,580
-
6,218
(i)
Sierra Sage Herbs is now a discontinued operation.
Results of Operations
The Company’s ongoing growth was achieved through strong performances in key divisions such as Mernova Medicinal
Inc., and via M&A and performance at Health House International. Notably Total Revenue from continuing operations
increased 203.4% year on year to $18.9 million and Adjusted EBITDA (loss) from continuing operations improved to
$13.8 million from $17.6 million in 2022 (21.6% loss reduction). The Company is committed to further reductions in
operating expenses and increasing revenues to contribute to further improvements in Adjusted EBITDA in 2024.
Adjusted EBITDA from continuing operations is defined as net earnings before interest, taxes, depreciation,
amortisation, impairment charges, finance costs, and losses attributable to business that were paused at the end of
2023 (Sierra Sage Herbs LLC, impACTIVE and Halucenex). Management considers adjusted EBITDA to be the most
accurate representation of the Company’s go-forward position. As described below, during FY23, the Company paused
several business units in order to focus on Mernova Medicinal and Health House International, which are the key
contributors to the Company’s growing revenue base and demonstrate the strongest cash flow attributes of any
operations within the Company’s portfolio.
Mernova Medicinal
Under the leadership of Micheline MacKay, Mernova posted $6.9 million in revenues in 2023, a 58% increase over 2022.
The division continues to expand its product range and customer base. During FY23, Mernova delivered several
consecutive quarters of record revenue. It listed a variety of new products in existing markets, and entered the following
provincial markets for the first time: Manitoba, Alberta, Newfoundland and Prince Edward Island. The Company expects
that Mernova will continue to increase its breadth of product range in existing markets, and continue to enter new
markets during FY24. The Company looks forward to providing further updates on Mernova Medicinal throughout the
course of FY24.
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CEO’s REPORT
Melodiol Global Health Limited – Annual Report 2023
Health House International
During FY23, the Company closed the acquisition of Health House International (“HHI”). HHI is comprised of a well
established medical cannabis distribution business in the growing Australian market and a medical products company
based in the UK. The acquisition of HHI contributed significant revenues of $11.5 million to the group’s results and
validated the Company’s strategy of growth through strategic M&A. The acquisition of HHI demonstrated the
Company’s ability to pursue accretive, strategic M&A to bolster its revenue base and geographic diversification. As the
Australian medicinal cannabis market continues to grow, the Company believes that HHI can continue to be a significant
contributor to the Company’s revenue base.
Sierra Sage Herbs
Over the course of the year, the Company recognised the challenges of competing in a highly competitive environment
for consumer packaged goods products in a challenging capital markets environment. As a result of this analysis, the
Company made the decision to pause operations at Sierra Sage Herbs pending a sale or closure of the business to focus
on its highest potential business units.
Creso Pharma Switzerland
Revenues from Swiss operations in 2023 declined by 75% from 2022 to $0.5 million due mainly to changes made to
restructure the business in 2022 in order to operate it in a more sustainable manner. During 2023 The business
continued its European business, in addition to achieving a breakthrough sale of products to South Korea.
Creso ImpACTIVE Inc
Over the course of the year, the Company recognised the challenges of competing in a highly competitive environment
for consumer packaged goods products in a challenging capital markets environment. As a result of this analysis, the
Company made the decision to pause operations at Creso impACTIVE pending a sale or closure of the business to focus
on its highest potential business units.
Halucenex Life Sciences Inc
Despite significant progress at Halucenex, the Company recognised the challenges of investing in a clinical stage R&D in
a challenging capital markets environment. As a result of this analysis, the Company made the decision to pause
operations at Halucenex pending a sale or closure of the business to focus on its highest potential business units.
Mr William Lay
Managing Director and Group CEO
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Director’s Report
Melodiol Global Health Limited – Annual Report 2023
The Directors of Melodiol Global Health Limited (“Melodiol” or the “Company”) present their report, together with the
financial statements of the Group, consisting of Melodiol Global Health Limited and its controlled entities (the “Group”)
for the financial year ended 31 December 2023.
CHANGE OF COMPANY NAME
On 31 May 2023, the Company announced that at the Annual General Meeting held on that date a resolution was passed
by shareholders to change the Company’s name from Creso Pharma Limited (ASX: CPH) to Melodiol Global Health
Limited (ASX: ME1). The change of name took effect on ASX from the commencement of trading on 13 June 2023
DIRECTORS
The names and particulars of the Company’s directors in office at any time during or since the end of the reporting
period are:
Mr Boaz Wachtel
Mr William Lay
Mrs Micheline MacKay
Mr Bruce Linton
Ms Jodi Scott
Mr Ben Quirin
Mr Peter Hatfull
Non-Executive Chairman (appointed Chairman on 17 November 2022)
CEO and Managing Director (appointed on 17 January 2022)
Executive Director (appointed on 17 January 2022)
Non-Executive Director (appointed on 17 January 2022)
Non-Executive Director (appointed on 4 January 2024, previously an Executive Director)
Non-Executive Director (appointed on 10 October 2022)
Non-Executive Director (appointed on 30 November 2022)
The Directors held office during the entire reporting period unless otherwise stated.
Boaz Wachtel, MA.
Non-Executive Chairman
Member of Audit and Risk Committee
(Appointed Chairman on 17 November 2022)
Mr Wachtel was Co-Founder and former Managing Director of MMJ-PhytoTech Ltd, Australia's first publicly traded
Medical Cannabis Company. Co-founder of IMCPC – International Medical Cannabis Patient Coalition. He is an Israeli
medical cannabis pioneer/activist, who formulated and assisted the Ministry of Health with the implementation of the
National Medical Cannabis Program – one of only few national programs in the world. He is a frequent lecturer and
adviser to governments, national committees, business and NGO's on medical cannabis program formulation, grow
operations, international laws and UN drug convention compliance, as well as the founder (1999) and former Chairman
of the Green Leaf Party, an Israeli political party for cannabis legalisation/medicalisation, human rights and ecology. Mr
Wachtel is a certified clinical research manager and holds an MA in Management and Marketing from the University of
Maryland.
During the past three years, Mr Wachtel held a directorship in the following other listed entity:
Company
Roots Sustainable Agricultural Technologies Limited (ASX:ROO)
Appointed
April 2009
Resigned
Current
William Lay, B.Com (Hons.)
Managing Director and Chief Executive Officer
(Appointed 17 January 2022)
Mr William Lay is an experienced cannabis executive and previously served as Executive Vice President – Strategy,
Origination & Operations at Melodiol. Mr Lay began his career with leading Canadian full service financial investment
bank, BMO Capital Markets through roles across Canada and London. During his time with BMO Capital Markets, Mr
Lay participated in M&A, equity financing and debt financing transactions totaling >C$3 bn in cumulative value.
Shortly after his time with BMO Capital Markets, Mr Lay joined Canopy Growth Corporation (TSE: WEED, NASDAQ: CGC)
as an M&A Associate, before being promoted to Associate Director, M&A, in 2019. In this role, he assessed and effected
multiple transactions locally and internationally, while concurrently progressing corporate strategy initiatives across the
group. During his time at Canopy Growth, Mr Lay built a strong working relationship with Mr Linton, working on many
high-profile initiatives together. Over the last six years, Mr Lay has managed and supported over C$5 billion in cannabis
M&A transactions, including leading the largest acquisition in the history of the cannabis sector.
Mr Lay has not been a director of any other listed entity within the last three years.
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Director’s Report
Micheline MacKay, M.Sc., B.Sc. (Hons.), PMP
Executive Director
(Appointed on 17 January 2022)
Melodiol Global Health Limited – Annual Report 2023
Mrs MacKay has 23 years of experience in regulatory environments, including pharmaceuticals, medical devices, and
government regulated industries. She has held leadership positions for many years in different areas with a strong focus
on business improvements and product development from laboratory scale to commercial operations.
Mrs MacKay is currently the Managing Director of Melodiol’s wholly owned Canadian subsidiary, Mernova Medicinal
Inc. (“Mernova”). She has been in the position for two years and oversees and manages all functions of this business
unit. Prior to this apppintment, Mrs MacKay was the Corporate Manager for Mernova for nearly three years. Mrs
MacKay is also the Health Canada designated Responsible Person in Charge at Mernova. Leveraging past experience,
she has played a significant role in successfully growing Mernova and has implemented best industry standards. She has
practical experience in managing a business through specified key performance indicators, managing budgets,
conducting regular audits and performance management.
Mrs MacKay has not been a director of any other listed entity within the last three years.
Bruce Linton, BPA
Non-Executive Director
(Appointed on 17 January 2022)
Member of Remuneration and Nomination Committee (appointed on 17 January 2023)
Bruce Linton is the founder, former CEO, and Chairman of Canopy Growth Corporation.
Bruce is currently Co-Chairman and former CEO of Martello Technologies Group Inc., and Chairman of the Advisory
Board for Red Light Holland Corp. Holds positions of Advisor with Celadon Pharmaceuticals and Above Foods. Board
member of the Canadian Olympic Foundation and is an active member of The Ottawa Hospital Foundation, Campaign
Executive Committee.
Formerly, Bruce was the founding Executive Chairman of Gage Growth Corp., prior to being acquired by TerrAscend.
Founding and former Board of Director member and Chairman of the Governance and Compensation Committee at
Mind Medicine Inc and was also Chairman and Chief Executive Officer of Collective Growth Corporation (SPAC) IPO in
May 2020 completing its business combination transaction with Innoviz Technologies Ltd. in April 2021.
During the past three years, Mr Linton held a directorship in the following other listed entites:
Company
Martello Technologies Group Inc. (TSXV: MTLO)
Mind Medicine Inc. (NEO: MMED)
Appointed
August 2018
September 2019
Resigned
February 2023
September 2021
Jodi Scott, M.Sc.TSU
Executive Director
(Appointed 10 October 2022)
Ms Scott has been employed in the position of President US operations by Melodiol Global Health and was respoonsible
for all executive and management matters affecting US retail, manufacturing and distribution of products. Ms Scott has
over 20 years of consumer package goods experience working with all the major national retailers. She has launched
mutpiple brands and products throughout the US. Ms Jodi Scott was co-founder and CEO of Sierra Sage Herbs LLC, based
in Colorado USA. Her in-country presence is expected to unlock several additional value accretive opportunities for
Melodiol Global Health in the USA.
Ms Scott has not been a director of any other listed entity within the last three years.
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Director’s Report
Ben Quirin
Non-Executive Director
(Appointed 10 October 2022)
Member of Remuneration and Nomination Committee (appointed on 17 January 2023)
Member of Audit & Risk Committee (appointed on 17 January 2023)
Melodiol Global Health Limited – Annual Report 2023
Mr Quirin is Australia-based and has over 20 years experience of global leadership in the telecommunications,
technology and pharmaceutical sectors. He has launched multiple new products and led business development in new
and emerging markets including Europe, the Middle East, Africa and the Asia Pacific. Mr Quirin was previously Regional
Managing Director for Canopy Growth Corporation in APAC, one of the world’s largest cannabis companies.
Mr Quirin has not been a director of any other listed entity within the last three years.
Peter Hatfull, MAICD
Non-Executive Director
(Appointed 30 November 2022)
Chairman of the Remuneration and Nomination Committee (appointed on 17 January 2023)
Chairman of the Audit and Risk Committee (appointed on 17 January 2023)
Mr Hatfull has over 30 years’ experience in a range of senior executive positions with Australian and International
companies. He has an extensive skill-set in the areas of business optimisation, capital raising and company
restructuring.
Mr Hatfull has held senior financial and Board positions in Australia, Africa and the UK. He has particular experience in
revitalising business plans, attracting investor funding, and implementing profitable strategies.
Mr Hatfull graduated as a Chartered Accountant in the United Kingdom, where he worked for Coopers and Lybrand
(now PriceWaterhouseCoopers), and subsequently moved to Africa, where he spent 8 years in Malawi. Mr Hatfull
moved to Perth in 1988.
During the past three years, Mr Hatfull held a directorship in the following other listed entities:
Company
Roots Sustainable Agricultural Technologies Limited (ASX:ROO)
Esense-Lab Limited (ASX:ESE) (delisted August 2021)
Pivotal Metals Limited (ASX:PVT)
Roto-Gro International Limited (ASX:RGI)
Appointed
July 2020
July 2020
May 2018
April 2022
Resigned
August 2022
August 2021
August 2023
Current
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Director’s Report
Melodiol Global Health Limited – Annual Report 2023
DIRECTORS INTERESTS IN EQUITY SECURITIES OF THE COMPANY AND RELATED BODIES CORPORATE
The following table sets out each Director’s relevant interest in shares, options and performance rights of the Company
or a related body corporate as at the year end.
Directors
Mr Boaz Wachtel(i)
Mr William Lay(ii)
Mr Bruce Linton(iii)
Mrs Micheline MacKay
Ms Jodi Scott
Mr Ben Quirin(iv)
Mr Peter Hatfull
Total
Ordinary
Shares
10,800,000
42,500,000
13,144,097
3,119,667
267,393,981
-
-
336,957,745
Listed Options
Unlisted Options
Performance
Rights
2,933,334
6,291,667
8,389,417
155,983
11,038,499
-
-
28,808,900
-
30,000,000
40,000,000
-
-
2,000,000
3,000,000
75,000,000
-
57,500,000
-
-
-
-
-
57,500,000
Unless stated below, the interests noted above are held directly:
(i)
(ii)
10,800,000 ordinary shares and 2,933,334 listed options are held by International Water and Energy Savers Ltd,
a related party of Boaz Wachtel.
42,500,000 ordinary shares, 6,291,667 listed options, 30,000,000 unlisted options and 57,500,000 performance
rights are held by Noble House Consulting Ltd, a related party of William Lay.
(iii) 5,000,000 ordinary shares and 5,250,000 listed options are held by HSBC Custody Nominees (Australia) Ltd and
10,000,000 ordinary shares are held by Canaccord Genuity Corp, both are related parties of Bruce Linton.
(iv) 2,000,000 unlisted options are hold by BKAH Pty Ltd, a related party of Ben Quirin.
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Director’s Report
DIRECTORS’ MEETINGS
Melodiol Global Health Limited – Annual Report 2023
The number of Director’s meetings held during the financial year and the number of meetings attended by each Director
during the time the Director held office are:
Director
Board Meetings
Audit and Risk
Committee Meetings
Remuneration and
Nomination Committee
Meetings
Mr Boaz Wachtel
Mr William Lay
Mr Bruce Linton
Mrs Micheline MacKay
Ms Jodi Scott
Mr Ben Quirin
Mr Peter Hatfull
Number
Eligible to
Attend
12
12
12
12
12
12
12
Number
Attended
8
12
11
12
10
9
12
Number
Eligible to
Attend
2
-
-
-
-
2
2
Number
Attended
2
-
-
-
-
2
2
Number
Eligible to
Attend
-
-
2
-
-
2
2
Number
Attended
-
-
1
-
-
2
2
In addition to the scheduled Board meetings, Directors regularly communicate with each other and, where necessary,
circular resolutions are executed to effect decisions.
EXECUTIVES
Chris Grundy B.Com. FCA. FGIA/FCIS. GAICD.
Chief Financial Officer
(Appointed 21 November 2017)
Chris Grundy is a career CFO with more than 25 years’ experience in the life sciences sector in Australia, including
listed and large multi-national companies, in addition to early-stage, rapidly growing businesses. His previous
experience includes roles as CEO and in marketing, including periods in the U.K. and Southern Africa. He qualified as a
Chartered Accountant with Ernst & Young.
COMPANY SECRETARY
Winton Willesee BBus. DipEd. PGDipBus. MCom. FFin. CPA. GAICD. FGIS/FCIS.
Company Secretary
(Appointed 19 October 2018)
Mr Willesee is an experienced company director and secretary with over 20 years’ experience in various roles within
the Australian capital markets. Mr Willesee has considerable experience with ASX listed and other companies over a
broad range of industries having been involved with many successful ventures from early stage through to large capital
development projects. He has a core expertise in strategy, company development, corporate governance, company
public listings, merger and acquisition transactions and corporate finance. Mr Willesee holds formal qualifications in
Commerce, Economics and Finance, Accounting, Applied Finance and Investment, Applied Corporate Governance and
Education. He is a Fellow of the Financial Services Institute of Australasia, the Governance Institute of Australia and the
Institute of Chartered Secretaries and Administrators, Graduate of the Australian Institute of Company Directors and a
Member of CPA Australia.
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Director’s Report
PRINCIPAL ACTIVITIES
Melodiol Global Health Limited – Annual Report 2023
The principal activities of the Group during the year were:
a)
b)
c)
the cultivation, processing and sale of cannabis products;
the distribution of pharmaceuticals internationally, specialising in, but not limited to, the distribution of
medicinal cannabis products across Australasia, and non-cannabis products in the United Kingdom and
Europe; and
the development and sale of beauty and personal care products, produced using proprietary plant-based
processes including under the brands Green Goo, Southern Butter and Good Goo.
Business Risk
The Company’s risk management approach involves the ongoing assessment, monitoring and reporting of risks that
could impede the Company's progress in delivering the Company’s strategic priorities.
Business risks are identified through best practice methodology using industry and professional expertise. All material
business risks have an appropriate mitigation strategy to reduce the risk to an acceptable level for the Company and
its investors. At every board meeting, the Company’s Board of Directors reviews strategy, performance, and business
risk.
Such risks include:
Going concern – see Note 1 to the Consolidated Financial Statements on Page 49 for further explanation.
Competition – the industries in which the Company operates, specifically cannabis and nutraceuticals, are highly
competitive and subject to rapid change. The Company’s strategies require it to compete successfully.
Intellectual property rights and proprietary technology – the Company may need to defend its rights and to
protect its trade secrets and proprietary technology, possibly in foreign jurisdictions, against infringement and
unauthorised use.
Potential acquisition risk – the Company’s strategies include growth by acquisition, which involves risks and costs
commonly encountered in making acquisitions of businesses and assets, e.g. integrating cultures and business
systems, retaining key personnel and customer and supplier relationships.
Strategic alliances – the Company’s operations include strategic alliances with third parties which are subject to
periodic negotiation and renewal.
Legal and Regulatory changes – many of the Company’s operations and products require compliance with
governmental regulations. The applicable regimes are undergoing significant changes which may affect or restrict
the Company’s operations.
Cultivation risks – part of the Company’s business is the cultivation of cannabis, a perishable agricultural product,
which has attendant risks associated with the health of live plants and the quality and quantity of end-products.
Access to active ingredients – some of the Company’s products contain full plant extracts. The Company needs
access to these materials which depends upon securing supplies and supplier relationships.
Product liability – the Company’s businesses expose it to risks inherent in the R&D, manufacturing, marketing and
use of its products. The Company endeavours to work to rigorous standards and maintains insurance cover, but
these may not be sufficient to protect it from large claims, public controversy or reputational damage.
Supply chain logistic and relationships – the Company has an international pharmaceutical distribution business
that relies on suppliers, transporters and customers to work to ensure the distribution channels work in unison.
The Company works tirelessly to ensure these relationships are maintained.
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Melodiol Global Health Limited – Annual Report 2023
Director’s Report
OPERATING AND FINANCIAL REVIEW
Operating Results
The operating results of the Group for the year ended 31 December 2023 were as follows:
Cash and cash equivalents
Net (liabilities)/assets
Divisional revenue from sale of products from:
Continuing operations
-
-
-
Canada
Asia Pacific
Switzerland
Total revenue from continuing operations
Discontinued operations
- United States
Total revenue
Adjusted EBITDA from operations
Net loss after tax from operations
31-Dec-2023
$000’s
31-Dec-2022
$000’s
692
(4,058)
6,936
7,349
4,636
18,921
2,643
21,564
(13,778)1
(35,520)
1,388
22,294
4,390
-
1,846
6,236
2,453
8,689
(17,618)2
(32,782)2
1 Adjusted EBITDA from operations is defined as net earnings before interest, taxes, depreciation, amortisation,
impairment charges, finance costs, and losses attributable to business that were paused at the end of 2023 (Sierra
Sage Herbs LLC, impACTIVE and Halucenex).
2 As stated in 2022.
The Company’s ongoing growth was achieved through strong performances in key divisions such as Mernova Medicinal
Inc., and via M&A and performance at Health House International. Notably Total Revenue from continuing operations
increased 203.4% year on year to $18.9 million and Adjusted EBITDA (loss) from continuing operations improved to
$13.8 million from $17.6 million in 2022 (21.6% loss reduction). The Company is committed to further reductions in
operating expenses and increasing revenues to contribute to further improvements in Adjusted EBITDA in 2024.
Adjusted EBITDA from continuing operations is defined as net earnings before interest, taxes, depreciation,
amortisation, impairment charges, finance costs, and losses attributable to business that were paused at the end of
2023 (Sierra Sage Herbs LLC, impACTIVE and Halucenex). Management considers adjusted EBITDA to be the most
accurate representation of the Company’s go-forward position.
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Director’s Report
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Results of Operations
Melodiol Global Health Limited – Annual Report 2023
Mernova Medicinal
Mernova posted $6.9 million in revenues in 2023, a 57% increase over 2022. The division continues to expand its
product range and customer base. During FY23, Mernova delivered several consecutive quarters of record revenue.
Health House International
During FY23, the Company closed the acquisition of Health House International (HHI). HHI is comprised of a well
established medical cannabis distribution business in the growing Australian market and a medical products company
based in the UK. The acquisition of HHI contributed significant revenues of $11.5 million to the group’s results and
validated the Company’s strategy of growth through strategic M&A.
Sierra Sage Herbs and Creso impACTIVE Inc.
Over the course of the year, the Company recognised the challenges of competing in a highly competitive environment
for consumer packaged goods products in a challenging capital markets environment. As a result of this analysis, the
Company made the decision to pause operations at Sierra Sage Herbs and Creso impACTIVE Inc, pending a sale or closure
of the business to focus on its highest potential business units. A similar decision was made with respect to Halucenex
Life Sciences Inc, noting the cash flow challenges associated with investing in clinical stage R&D initiatives.
A more detailed review of the operations of the Group and its financial results is set out in the CEO’s Report on page 7.
Dividends
No dividends have been paid or declared by the Group during the year (2022: Nil).
No dividend is recommended in respect of the current financial year (2022: Nil).
15 | P a g e
Director’s Report
IMPAIRMENT TESTING
Melodiol Global Health Limited – Annual Report 2023
The Board recognises that dependent on market conditions and specific circumstances businesses face may result in
the carrying amounts of the Group’s business units exceeding their carrying amount, therefore, the Company
implemented impairment assessments of its operating assets according to its accounting policies, which are detailed in
the notes to the financial statements.
Specifically, the Company determined that the separable cash generating units of the Group were:
Mernova Cannabis Facility;
Health House International Australia;
Health House International UK/Europe;
Halucenex Psilocybin business; and
Switzerland nutraceutical R&D and marketing business;
Switzerland Intellectual Property business;
Sierra Sage Herbs consumer packaged goods business.
Each of these cash generating units was subject to impairment assessment. Management concluded that there were
indicators of impairment for the Switzerland IP business and Health House UK/Europe, these assets have been fully
impaired. It is noted that operations at Halucenex, Impactive and Sierra Sage were discontinued during the year and
have therefore been fully impaired. Management’s 5-year cashflow forecasts for Mernova and Health House Australia
have been carefully reviewed for known and anticipated risks and opportunities. Similarly, the discount rates applied
to the forecasts, which were based upon operational and market risk assessments and assumptions, were determined
to be reasonable and appropriate. It was concluded that no impairment is required for either company.
As a result of the impairment testing, the Company determined that an impairment to the carrying value of intangible
assets of $17,612,000 (2022: $12,521,000) was required for the financial year ending 31 December 2023. Details of this
impairment are disclosed in the notes to the financial statements.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in state of affairs during and subsequent to the end of the financial year other
than disclosed in the Directors’ Report.
Capital Management and Funding
Obsidian Convertible Notes
On 9 January 2023, the Company secured A$500,000 in funding from Obsidian Global GP, LLC ('Obsidian’) via the
issuance of an additional 340,850 convertible notes under the Second Purchase of the convertible note facility
announced on 1 November 2022.
On 24 March 2023, the Company paid AUD$137,580 in partial settlement of the convertible note facility.
During the period, Obsidian converted 500,000 of its First Purchase convertible notes into 41,528,239 Shares, and
subsequently redeemed the remaining existing 968,025 First Purchase and Second Purchase convertible notes for an
aggregate of 69,096,662 Shares (plus the retention of the 57,857,143 Collateral Shares previously issued).
On 24 May 2023, the remaining 260,850 notes were satisfied by the issue of 55,655,738 shares.
August 2022 Placement – Related Party Issues
In January 2023, the Company issued 43,500,000 Shares to Directors and a former Director for their participation in the
placement undertaken in August 2022, which raised $1,740,000 (before costs).
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Director’s Report
Melodiol Global Health Limited – Annual Report 2023
La Plata Capital, LLC Debt
On 27 January 2023, the Company announced that it had agreed with La Plata Capital LLC ('La Plata’), an existing lender
to SSH, to repay USD$717,500 in cash by 31 January 2023, and swap USD$1,282,500 for secured notes valued at
USD$1,282,500. A cash payment of USD$250,000 (of the USD$717,500) was made to La Plata on 27 February 2023, and
on 6 March 2023, the Company announced that La Plata had agreed to rollover its entire remaining loan of USD$467,500
into secured notes, extending the maturity date by 6 months.
On 6 March 2023, the Company agreed to acquire a USD$500,000 interest in a loan from La Plata to (then) acquisition
target, Abby & Finn, LLC (‘A&F') (refer to Matters Subsequent to the Reporting Period below for further updates on this
proposal) for USD$500,000 of secured notes, issuable to La Plata. On 14 June 2023, the Company announced that La
Plata had agreed to extend the maturity date of USD$1,767,500 of its existing secured notes to June 2024, with the
maturity date of the balance (USD$482,500) extended to October 2023 (to be automatically extended to June 2024
upon the repayment of non-La Plata secured noteholders). In consideration for the maturity date extensions, the
Company acquired the remaining USD$900,000 of La Plata’s loan to A&F, for USD$900,000 of secured notes, issuable
to La Plata, with a maturity of June 2024. The Company and La Plata also agreed for the Company to make its March
2023 interest payment to La Plata in equity at a deemed issue price of $0.009 per Share, for which the Company issued
18,981,000 Shares on 26 June 2023.
February Placement
On 17 February 2023, the Company secured firm commitments from new and existing institutional, professional and
sophisticated investors to raise $2m (before costs) through the issue of approximately 132,859,356 fully paid ordinary
shares at an issue price of $0.01506 per Share. The total amount raised included a $100,000 commitment from group
CEO and Managing Director Mr William Lay (or his nominee), which remains subject to shareholder approval. The raising
was satisfied on 24 February 2023 by $1.63 million subscriptions in cash and ~$368,000 subscriptions offset against
outstanding invoices owed by the Company.
SBC Convertible Notes
On 6 March 2023, the Company secured commitments to raise $2.5m through the issuance of secured Convertible
Notes to SBC Global Investment Fund (‘SBC’), comprising of one tranche (issued 15 March 2023) with an aggregate
purchase price of $1,700,000 pursuant to a convertible securities agreement and a second tranche (issued 2 June 2023)
with an aggregate purchase price of $800,000 pursuant to a second convertible securities agreement (together, 'SBC
Convertible Note Facility’).
Proceeds of the issue were used in part to repay a portion of debt due to Obsidian Global GP, LLC. On 24 May 2023, the
Company announced that it had paid its first amortisation payment, and two accelerated amortisation payments under
the SBC Convertible Note Facility (plus accrued interest) totalling $810,000, in equity, at a deemed issue price of $0.009
per Share for an aggregate of 90,000,000 Shares, redeeming 675,007 of the SBC Convertible Notes.
On 14 June 2023, the Company announced it had paid its second amortisation payment, and one accelerated
amortisation payment under the SBC Convertible Note Facility (plus accrued interest) totalling $540,000, in equity, at a
deemed issue price of $0.008 per Share for an aggregate of 67,500,000 Shares, redeeming 450,004 of the SBC
Convertible Notes.
May Placement
On 19 May 2023, the Company announced firm commitments to raise $2.5 million through the issue of 204,918,033
Shares at an issue price of $0.0122 per Share, including a commitment of $900,000 from Mr Adam Blumenthal, which
remains subject to shareholder approval. As at the date of this report, in addition to the commitment from Mr
Blumenthal, $350,000 remains outstanding under the May placement.
May Debt-to-Equity Conversions
On 19 May 2023, the Company also announced that it had agreed with existing debtors to convert liabilities of $368,333
into equity via the issuance of 36,748,607 Shares (plus free attaching Options) on the same terms as the May placement,
and that it had agreed with Director Bruce Linton, subject to shareholder approval, to convert $33,333 worth of
Directors fees into equity, on the same terms as the May placement.
17 | P a g e
Director’s Report
Melodiol Global Health Limited – Annual Report 2023
November Secured Notes - Extensions
On 19 May 2023 the Company also announced that it had reached an in principle agreement with a majority of its
existing November secured note lenders, to extend the maturity date and repayment date of the secured notes to 30
September 2023, in consideration for an aggregate of 80,901,639 Shares (plus free attaching Options), of which
14,344,262 Shares (and all Options) remain subject to shareholder approval.
June Debt-to-Equity Conversions
On 14 June 2023 the Company announced that it had agreed to pay $592,778 of existing debt via the issuance of
59,171,735 Shares, 8,333,333 of which were issued on 21 June 2023 (the balance of which remain subject to shareholder
approval). Separately, on 15 June 2023, the Company issued 17,777,777 Shares in lieu of payment of invoices totalling
$160,000, as approved by shareholders in May 2023.
March 2022 Placement – Related Party Participation
On 15 June 2023, the Company issued 4,612,320 Shares to a nominee of Adam Blumenthal, for his participation in the
placement undertaken in March 2022 (as approved by shareholders on 15 May 2023), which raised $318,250(before
costs).
The Company also agreed to issue a number of free-attaching Options in connection with the above securities issues
throughout the period, which are detailed further in the relevant announcements.
On 8 August 2023, Melodiol announced it received firm commitments to issue 167,445,189 Shares at an issue price of
$0.00821 per Share totalling $1,374,725 for a cash placement and agreements to convert debt to equity.
The Company also agreed to satisfy its obligations under the third amortisation payment to SBC Global Investment Fund
under the existing Convertible Note Facility via the issuance of 33,750,000 Shares, totalling $270,000 (including interest),
redeeming 225,002 Convertible Notes following which, the first tranche of the facility is now two thirds repaid.
September Debt Restructure
On 4 September 2023 the Company announced that it had agreed with La Plata to pay all future interest payments in
equity, extend October maturity date of USD$482,500 to June 2024 in addition to regular offsets against principal.
Additionally, the Company has reached an agreement to convert AUD$200,000 of existing secured notes in addition to
accrued interest (AUD$40,438) to equity via the issue of 53,571,429 shares.
On 18 October 2023, the Company issued the following; 24,847,217 Broker shares to Everblu in relation to the May
Placement; 14,344 262 shares to Adam Blumenthal in relation to the extension of the secured notes announced in the
May Placement; 42,200,183 shares to Everblu in relation to the August Placement; 110,619,469 shares in settlement of
the Atlantic secured loan; 45,000,000 shares to Everblu for corporate advisory services and 26,966,292
to
Everblu for their retainer fee.
shares
On 23 October 2023, the Company announced a bonus issue of options to all eligible shareholders on the basis of 1
option for each 20 shares held, the bonus options are to be issued for nil consideration and will be exercisable at $0.01
up to 5 years from the date of issue.
October Secured Notes – Extension and Interest
On 24 October 2023, the Company issued 100,000,000 shares in consideration for the agreement to extend the maturity
date of existing secured notes from 30 September 2023 to 30 November 2023. The Company also issued 185,675,804
shares to La Plata in lieu of June and September interest payments.
October Placement and Debt Conversion
On 26 October 2023, the Company announced firm commitments to raise $1.0 million through the issue of 200,000,000
Shares at an issue price of $0.005 per Share. The Company also agreed to issue 157,339,296 to creditors having a value
of $786,696 on the same terms as the placement.
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Director’s Report
Melodiol Global Health Limited – Annual Report 2023
October Debt Conversion
On 27 October 2023, the Company issued the following; 154,867,257 shares for the conversion of 630,006 T2 Notes;
37,389,381 shares to SBC. Totalling $700,000, in lieu of interest and standstill agreement; 42,616,180 shares to
unrelated creditors in lieu of cash and 36,405,312 shares to directors in relation salaries and remuneration.
November Re-Price of October Placement and Debt Conversions
On 13 November 2023, the Company announced that it had repriced the October Placement and Debt Conversion from
$0.005 per Share to $0.002904 per Share.
On 16 November 2023, the Company issued 30,737,705 shares for settlement of the Atlantic loan.
On 17 November 2023, the Company issued the following; 183,161,158 shares in relation to the October Placement,
amended by the November Re-Price; 44,972,436 shares in lieu of cash for repayment of a loan and 43,032,787 shares
relating to the May Placement.
On 20 November 2023, the Company issued 32,713,497 shares in relation to the October Placement, amended by the
November Re-Price.
On 27 November 2023, the Company issued the following; 132,233,470 shares in relation to the October Placement,
amended by the November Re-Price; 48,209,366 shares in relation to the October Debt Conversion, amended by the
November Re-Price and 34,435,262 shares for a loan settlement.
On 29 November 2023, the Company issued 180,000,000 shares in consideration for broking services.
December Placement
On 7 December 2023, the Company issued 115,904,030 shares at an issue price of $0.002 per share for gross proceeds
of $231,808.
December Share Consolidation
On 22 December 2023, the Company announced a proposed share consolidation of 1 share for every 20 shares currently
held, subject to shareholder agreement. The shareholder meeting is planned to be on 23 January 2024.
The above reflects the material issues affecting the Company’s funding position over the period. A number of additional
securities were issued over the period in respect of various matters as announced on the Company’s ASX
announcements platform and as reflected in the accounts, including as part of the HHI acquisition, broker and lender
fees, director (and former director) and advisor/ambassador remuneration and fees, conversion of performance rights
and exercises of options and free-attaching options to previous placements.
Acquisitions
On 16 May 2023 the Group acquired 100% of the voting equity instruments of Health House International Limited
(“HHI”), a company whose principal activity is the distribution of medicinal cannabis and other controlled drugs.
Completion of the acquisition follows approval from the second Supreme Court of Western Australia, 100% of the shares
in HHI were acquired, see note 28 for further details.
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Director’s Report
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Melodiol Global Health Limited – Annual Report 2023
On 16 January 2024, the Company issued 167,315,175 shares at an issue price of $0.00128 per share for gross proceeds
of $214,163.
On 2 February 2024, the Company announced that the consolidation of the issued capital on the basis of 1 security for
every 20 securities held had been completed.
On 27 February 2024, the Company issued 91,126,313 shares at an issue price of $0.01019 per share for gross proceeds
of $928,577.
Other than the above, there has been no other matter or circumstance that has arisen since the end of the financial
year that has significantly affected, or may significantly affect, the operations of the Group, the results of those
operations, or the state of affairs of the Group.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Comments on the results of operations and future prospects of the Group are included in the Chairman’s Address, the
CEO’s Report and in Matters Subsequent to the End of the Financial Year – all above.
Further information on likely developments in the operations of the Group and the expected results of operations have
not been included in this Annual Report because the Directors believe it would result in unreasonable prejudice to the
Group.
ENVIRONMENTAL REGULATION
The operations of the Group are not subject to any particular and significant environmental regulations under a law of
the Commonwealth or state. There have been no known significant breaches of any environmental requirement.
The National Greenhouse and Energy Reporting Act (“NGER”) legislation was considered and determined not to be
applicable to the entity.
AUDITED REMUNERATION REPORT
The Audited Remuneration Report comprises a part of this Directors’ Report and is set out in pages 22 to 35.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
During the year ended 31 December 2023, the Company paid premiums in respect of a contract insuring the directors
and officers of the Company against liabilities incurred as directors or officers to the extent permitted by the
Corporations Act 2001.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for them or someone else or to cause detriment to the Company. It is not possible to
apportion the premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF THE AUDITOR
There are no officers of the Company who are former partners of Crowe Audit Australia.
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Director’s Report
AUDITOR’S INDEPENDENCE DECLARATION
Melodiol Global Health Limited – Annual Report 2023
The lead auditor’s independence declaration for the year ended 31 December 2023 has been received and included
within the financial statements section of this report.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 26 to the financial statements.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
Directors are satisfied that the provision of non-audit services by the auditors, as set out below, did not compromise
the auditor independent requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality
and objectivity of the auditor; and
• None of the services undermine the general principles relating to the auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
ANNUAL GENERAL MEETING
The Company will hold its next Annual General Meeting (‘AGM’) on 31 May 2024.
In accordance with ASX Listing Rule 3.13.1, the closing date for the receipt of nominations from persons wishing to be
considered for election as a director of the Company is 9 April 2024.
Any nominations must be received in writing no later than 5.00pm (WST) on 9 April 2024 at the Company’s registered
office.note
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave to the Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a part for the purpose of taking responsibility on behalf of the Company for all or
any part of those proceedings.
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement and its Key to Disclosures, Corporate Governance Council Principles
and Recommendations (ASX Appendix 4G) are provided separately to the ASX on the date that this Annual Report is
provided to the ASX. The Corporate Governance Statement
is available on the Company’s website:
www.melodiolglobalhealth.com
This report, which includes the Remuneration Report, is made in accordance with a resolution of directors, pursuant to
section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
William Lay
CEO and Managing Director
28 March 2024
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Remuneration Report
Melodiol Global Health Limited – Annual Report 2023
This remuneration report for the year ended 31 December 2023 comprises a part of the Directors’ Report. It outlines
the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (“the
Act”) and its regulations. This information has been audited as required by section 308(3C) of the Act.
The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities
of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company.
All monetary amounts stated in this report are in Australian Dollars unless otherwise indicated.
a) Key Management Personnel Disclosed in this Report
The Directors of the Group during or since the end of the financial year were:
Mr Boaz Wachtel
Mr William Lay
Mrs Micheline MacKay
Mr Bruce Linton
Ms Jodi Scott
Mr Ben Quirin
Mr Peter Hatfull
(Non-Executive Chairman) – Appointed Chairman on 17 November 2022
(Managing Director and CEO) – Appointed on 17 January 2022
(Executive Director) – Appointed on 17 January 2022
(Non-Executive Director) – Appointed on 17 January 2022
(Executive Director) – Appointed on 10 October 2022
(Non-Executive Director) – Appointed on 10 October 2022
(Non-Executive Director) – Appointed on 30 November 2022
Dr James Ellingford
Mr Adam Blumenthal
(Executive Chairman) – Resigned on 30 November 2022
(Non-Executive Director) Resigned on 10 October 2022
Senior Executives of the Group during or since the end of the financial year were:
Mr Chris Grundy
Chief Financial Officer
There have been no other changes after reporting date and up to the date that the financial report was authorised for
issue.
The Remuneration Report is set out under the following main headings:
A
B
C
D
E
F
G
H
I
Remuneration Governance, Structure and Approvals
Remuneration Philosophy
Remuneration and Performance
Details of Remuneration
Service Agreements
Share-based Compensation
Equity Instruments Issued on Exercise of Remuneration Options
Loans with KMP
Other Transactions with KMP
A
Remuneration Governance, Structure and Approvals
The Remuneration and Nomination Committee (“RNC”) is a sub-committee of the Board. It is primarily responsible for
making recommendations to the Board on:
the over-arching executive remuneration framework;
operation of the incentive plans which apply to executive directors and senior executives, including key
performance indicators and performance hurdles;
remuneration levels of executives; and
Non-Executive Director fees.
The Committee reviews and determines the Group’s remuneration policy and structure annually to ensure it remains
aligned to business needs, meets the Group’s remuneration principles and is reflective of generally acceptable market
practices.
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Remuneration Report
A
Remuneration Governance, Structure and Approvals (continued)
Melodiol Global Health Limited – Annual Report 2023
In particular, the RNC and Board aim to ensure that remuneration practices are:
competitive and reasonable, enabling the Company to attract and retain key talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder value;
transparent and easily understood; and
acceptable to shareholders.
Non-Executive Directors’ Remuneration Structure
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels to
reflect market conditions and encourage the continued services of the Directors. The nature and amount of
remuneration is collectively considered by the Board of Directors with reference to relevant employment conditions
and fees commensurate to a company of similar size and level of activity, with the overall objective of ensuring
maximum stakeholder benefit from the retention of high performing Directors.
The total aggregate fixed sum per annum to be paid to Non-Executive Directors in accordance with the Company’s
Constitution shall initially be no more than $500,000 and may be varied by ordinary resolution of the Shareholders in a
General Meeting.
In accordance with the Company’s Constitution, the Directors may at any time, subject to the Listing Rules, adopt a
scheme or plan which they consider to be in the interests of the Company and which is designed to provide
superannuation benefits for both present and future Non-Executive Directors, and they may from time to time vary this
scheme or plan.
Remuneration may also include an invitation to participate in share-based incentive programmes in accordance with
Company policy.
The remuneration of Non-Executive Directors is detailed in Table 1 in “Section D – Details of Remuneration” and their
contractual arrangements are disclosed in “Section E – Service Agreements”.
Executive Remuneration Structure
The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective of
ensuring maximum stakeholder benefit from the retention of high- performing executives.
The main objectives sought when reviewing executive remuneration is that the Company has:
Coherent remuneration policies and practices to attract and retain Executives;
Executives who will create value for shareholders;
Competitive remuneration offered benchmarked against the external market; and
Fair and responsible rewards to Executives having regard to the performance of the Group, the performance
of the Executives and the general pay environment.
The remuneration of Executives is detailed in Table 1 in “Section D – Details of Remuneration” and their contractual
arrangements are disclosed in “Section E – Service Agreements”.
Executive Remuneration Approvals
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and aligned with market practice. Executive contracts are reviewed annually by the
Remuneration and Nomination Committee. The process consists of a review of company, business unit and individual
performance, relevant comparative remuneration internally and externally and where appropriate, external advice
independent of management.
Executive remuneration and incentive policies and practices must be aligned with the Company’s vision, values and
overall business objectives. Executive remuneration and incentive policies and practices must be designed to motivate
management to pursue the Company’s long-term growth and success and demonstrate a clear relationship between
the Company’s overall performance and performance of the executives.
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Remuneration Report
B
Remuneration Philosophy
Melodiol Global Health Limited – Annual Report 2023
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of the
Group comprise of the Directors and other senior executives.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and
responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest
quality.
No remuneration consultants were employed during the financial year.
C
Remuneration and Performance
The following table shows the gross revenue, losses, earnings per share (“EPS”) and share price of the Group for the
years ended 31 December 2023 and 31 December 2022.
Revenue from continued operations ($000’s)
Revenue from discontinued operations ($000’s)
Net loss after tax ($000’s)
EPS (cents)
Share price ($)
31-Dec-2023
18,921
2,643
(52,446)
(1.88)
0.004
31-Dec-2022
6,236
2,453
(32,782)
(2.24)
0.020
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development, the Remuneration and Nomination Committee does not
consider earnings during the current and previous financial years when determining the nature and amount of
remuneration of KMP.
The pay and reward framework for key management personnel may consist of the following areas:
a) Fixed Remuneration – base salary
b) Variable Short-Term Incentives
c) Variable Long-Term Incentives
A combination of these comprises the key management personnel’s total remuneration.
a)
Fixed Remuneration – Base Salary
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role
and knowledge, skills and experience required for each position. Fixed remuneration provides a base level of
remuneration which is market competitive and comprises a base salary inclusive of statutory superannuation. It
is structured as a total employment cost package.
Key management personnel are offered a competitive base salary that comprises the fixed component of pay
and rewards. External remuneration consultants may provide analysis and advice to ensure base pay is set to
reflect the market for a comparable role. No external advice was taken this year. Base salary for key management
personnel is reviewed annually to ensure the executives’ pay is competitive with the market. The pay of key
management personnel is also reviewed on promotion. There is no guaranteed pay increase included in the
contract of any KMP.
b)
Variable Remuneration – Short Term Incentives (STI)
Discretionary cash bonuses may be paid to senior executives annually, subject to the requisite Board and
shareholder approvals where applicable.
c)
Variable Remuneration – Long Term Incentives (LTI)
Employee Incentive Plan
The Melodiol Global Health Limited Employee Incentive Plan (“Plan”) was adopted by the Company during the
year ended 31 December 2021.
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Remuneration Report
C
Remuneration and Performance (continued)
Melodiol Global Health Limited – Annual Report 2023
The current Plan provides the Board with the discretion to grant Plan Securities to eligible participants which will
vest subject to the achievement of performance hurdles as determined by the Board at the time the Plan
Securities are granted.
The objective of the Plan is to attract, motivate and retain employees and it is considered that the Plan will enable
the Group to make grants to Eligible Participants so that long-term incentives form a key component of their
total annual remuneration.
The Board believes that grants under the Plan will serve a number of purposes including:
to act as a key retention tool; and
to focus attention on the generation of shareholder value.
Any grants under the Plan will be subject to the achievement of vesting conditions. Appropriate vesting
conditions may be formulated for each Eligible Participant to participate in the Plan based on their role and
responsibilities in the Group.
Performance will be assessed at the end of the performance period. Refer to Schedule 6 of the Notice of Annual
General Meeting dated 19 May 2021 for further information on the Plan.
D
Details of Remuneration
Details of the nature and amount of each major element of the remuneration of each KMP of the Group during the
financial year are:
Table 1 – Remuneration of KMP of the Group for the year ended 31 December 2023 is set out below:
31 December 2023
Directors
William Lay
Micheline MacKay
Jodi Scott
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Total
Short-term Employee Benefits
Salary &
fees
$
Non-
monetary
benefits
$
Other/
bonus
$
Post-
Employment
Share Based
Payments
Total
Termination
payments
Superannuation
& Insurance
Performance
Rights/Options(vi)
$
$
$
$
411,514
184,517
318,390
80,000
80,000
80,000
72,235
306,667
1,533,323
-
-
-
-
-
-
-
-
-
-
53,305
-
-
-
-
-
53,305
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,765
26,346
34,111
483,361
28,077
91,242
-
2,720
2,802
3,256
894,875
265,899
409,633
80,000
82,720
82,802
83,256
295,000
906,458
628,012
2,527,197
25 | P a g e
Remuneration Report
D Details of Remuneration (continued)
Melodiol Global Health Limited – Annual Report 2023
Table 2 – Remuneration of KMP of the Group for the year ended 31 December 2022 is set out below:
31 December 2022
Directors
William Lay (iii)
Micheline MacKay (iii)
Jodi Scott (iv)
James Ellingford (i)
Adam Blumenthal (ii)
Boaz Wachtel
Bruce Linton (iii)
Ben Quirin (iv)
Peter Hatfull (v)
Senior Executives
Chris Grundy
Total
Short-term Employee Benefits
Salary &
fees
$
Non-
monetary
benefits
$
Other/
bonus
$
Post-
Employment
Share Based
Payments
Total
Termination
payments
Superannuation
& Insurance
Performance
Rights/Options(vi)
$
$
$
$
389,043
157,434
87,732
133,833
112,888
80,000
76,825
18,413
6,307
290,000
1,352,475
-
-
-
-
-
-
-
-
-
-
-
-
27,701
456
-
-
-
-
-
-
-
28,157
-
-
-
144,000
-
-
-
-
-
-
144,000
-
-
-
13,688
11,461
-
-
-
662
24,430
50,241
-
-
-
80,000
-
40,000
16,679
-
-
389,043
185,135
88,188
371,521
124,349
120,000
93,504
18,413
6,969
-
136,679
314,430
1,711,552
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Mr Ellingford stepped down as an executive on 26 April 2022 and resigned as a director on 30 November
2022.
Mr Blumenthal’s Kunna SAS, Kunna Canada fee ceased effective from 14 March 2022, and he resigned as
a director on 10 October 2022.
Mr Lay, Ms Mackay and Mr Linton were appointed directors on 17 January 2022.
Ms Scott and Mr Quirin were appointed directors on 10 October 2022.
Mr Hatfull was appointed as a director on 30 November 2022.
Authorisation of shares issued to Mr Ellingford, Mr Boaz and Mr Linton was obtained on 29 December
2022. The shares were issued after 31 December 2022.
The following table shows the relative proportions of remuneration that are linked to performance and those that are
fixed, based on the amounts disclosed as statutory remuneration expense in the tables above:
Table 3 – Relative proportion of fixed vs variable remuneration expense
Name
Directors
William Lay
Micheline MacKay
Jodi Scott
James Ellingford
Adam Blumenthal
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Fixed Remuneration
2022
2023
At Risk – STI (%)
At Risk – LTI (%)
2023
2022
2023
2022
46%
69%
78%
-
-
100%
97%
97%
96%
53%
100%
85%
99%
78%
100%
67%
82%
100%
100%
100%
-
20%
-
-
-
-
-
-
-
-
-
15%
1%
-
-
-
-
-
-
-
54%
11%
22%
-
-
-
3%
3%
4%
47%
-
-
-
22%
-
33%
18%
-
-
-
26 | P a g e
Remuneration Report
D Details of Remuneration (continued)
Table 4 – Shareholdings of KMP (direct and indirect holdings)
Melodiol Global Health Limited – Annual Report 2023
31 December
2023
Balance at
01/01/2023
Granted as
Remuneration
Exercised
Net Change –
Otheri
Sold
Balance at
31/12/2023
Directors
William Lay
Micheline MacKay
Jodi Scott
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Total
10,000,000
-
209,364,678
10,800,000
5,411,884
-
-
25,000,000
3,119,667
11,405,312
-
2,732,213
-
-
940,000
236,516,562
19,000,000
61,257,192
5,000,000
-
-
-
-
-
-
-
5,000,000
2,500,000
-
46,623,991
-
5,000,000
-
-
-
-
-
-
-
-
-
42,500,000
3,119,667
267,393,981
10,800,000
13,144,097
-
-
-
54,123,991
(19,000,000)
(19,000,000)
940,000
337,897,745
iWilliam Lay - placement participation 2,500,000.
Jodi Scot - loan repayment 44,972,436 and purchase 1,651,555.
Bruce Linton - placement participation 5,000,000.
Table 5 – Unlisted Option holdings of KMP (direct and indirect holdings)
31 December
2023
Balance at
01/01/2023
Granted as
Remuneration
Exercise
Net Change –
Other
Sold
Balance at
31/12/2023
Vested &
Exercisable
Directors
William Lay
Micheline MacKay
Jodi Scott
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Total
20,000,000
-
-
-
40,000,000
-
-
10,000,000
-
-
-
-
2,000,000
3,000,000-
-
60,000,000
-
15,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000,000
-
-
-
40,000,000
2,000,000
3,000,000
30,000,000
-
-
-
40,000,000
2,000,000
3,000,000-
-
75,000,000
-
75,000,000
27 | P a g e
Remuneration Report
D Details of Remuneration (continued)
Table 6 – Listed Option holdings of KMP (direct and indirect holdings)
Melodiol Global Health Limited – Annual Report 2023
31 December 2023
Balance at
01/01/2023
Granted as
Remuneration
Exercised
Net Change –
Other
Sold
Balance at
31/12/2023
Vested &
Exercisable
Directors
William Lay
Micheline MacKay
Jodi Scott
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Total
1,666,667
-
-
2,933,334
-
-
-
313,334
4,913,335
-
-
-
-
2,732,213
-
-
-
2,732,213
-
-
-
-
-
-
-
-
-
4,625,000
155,983
11,038,499
-
5,657,204
-
-
-
-
-
-
-
-
-
6,291,667
155,983
11,038,499
2,933,334
8,389,417
-
-
6,291,667
155,983
11,038,499
2,933,334
8,389,417
-
-
47,000
21,523,686
(313,334)
(313,334)
47,000
28,855,900
47,000
28,855,900
Table 7 – Performance rights holdings of KMP (direct and indirect holdings)
31 December 2023
Balance at
01/01/2023
Granted as
Remuneration
Vested and
Exercised
Others-
Lapsed
Balance not
Vested at
31/12/2023
Balance
Vested not
Exercised at
31/12/2023
Directors
William Lay
Micheline MacKay
Jodi Scott
Boaz Wachtel
Bruce Linton
Ben Quirin
Peter Hatfull
Senior Executives
Chris Grundy
Total
10,000,000
-
-
-
-
-
-
57,500,000
-
-
-
-
-
-
(5,000,000)
-
-
-
-
-
-
(5,000,000)
-
-
-
-
-
-
32,500,000
-
-
-
-
-
-
25,000,000
-
-
-
-
-
-
-
10,000,000
15,000,000
72,500,000
-
(5,000,000)
-
(5,000,000)
-
32,500,000
15,000,000
40,000,000
28 | P a g e
Melodiol Global Health Limited – Annual Report 2023
Remuneration Report
E
Service Agreements
Current Key Management Personnel
The following individuals were considered key management personnel as at 31 December 2023:
Mr Boaz Wachtel – Non-Executive Chairman
Contract: Commenced on 18 October 2016.
Appointed Chairman on 17 November 2022.
-
-
- Director’s Fee: $80,000 per annum from 22 May 2021.
- Director’s Fees are paid to International Water and Energy Savers Limited.
-
- Notice Period: 12 months.
-
Term: 3 years or as extended per the Consultant Agreement.
Performance Based Bonus: Mr Wachtel is entitled to a discretionary bonus equal to 50% of the Fee on an
annual basis, subject to meeting performance criteria agreed by the Board each year.
Mr William Lay – Managing Director and Chief Executive Officer
Contract: Commenced on 17 January 2022.
Base Salary: Initially CAD$350,000 per annum increased to CAD$386,000 from 1 August 2022
Performance bonus: None.
Long term incentives: Subject to shareholder approval Mr Lay is entitled to 7,500,000 performance rights
conditional upon Group revenue meeting or exceeding $30 million Australian dollars within 24 months of his
appointment. Subject to shareholder approval Mr Lay is entitled to 10,000,000 unlisted options with an
exercise price of $0.20 per share and an expiry date of 17 January 2024. The options vest on condition that
Mr Lay has maintained continuous employment with the Group for 12 months from the date of his
appointment.
Term: 4 years.
-
- Notice Period: 2 months.
Mrs Micheline MacKay – Executive Director
Contract: Commenced on 17 January 2022.
Base Salary: Initially CAD$122,400 per annum increased to CAD$150,000 from 1 March 2022 and then
increased to CAD$175,000 from 11 March 2023.
Performance bonus: Determined at the sole discretion of the Melodiol Board.
Long term incentives: None
Term: Ongoing.
-
-
-
- Notice Period: 4 weeks.
Ms Jodi Scott– Executive Director
-
-
-
-
-
Contract: Commenced on 10 October 2022.
Base Salary: $250,000 per annum
Performance bonus: Determined at the sole discretion of the Board.
Long term incentives: None
Term: The initial term is 3 years from the appointment of Ms Scott within the role of President, US
Operations of Sierra Sage Herbs LLC (“Initial Term”) and will be automatically extended by two years (“First
Renewal Term”) and a further two years following the First Renewal Term(“Second Renewal Term”), unless
SSH provides notice of its intention not to renew within at least 90 days before the end of the Initial Term,
First Renewal Term or Second Renewal Term.
- Notice Period: 3 months.
Mr Bruce Linton– Non-Executive Director
Contract: Commenced on 17 January 2022.
Base Salary: $80,000 per annum
Performance bonus: Nil
Long term incentives: Mr Linton was issued 10,000,000 unlisted options with an exercise price of $0.09 per
share and an expiry date of 17 January 2024. The options were to vest and become exercisable on the date
that is six months after Mr Linton’s appointment date.
Term: Ongoing, subject to shareholder approval.
-
- Notice Period: None.
-
-
-
-
-
-
-
-
-
-
29 | P a g e
Melodiol Global Health Limited – Annual Report 2023
Remuneration Report
E
Service Agreements (continued)
Mr Ben Quirin– Non-Executive Director
-
-
-
-
Contract: Commenced on 10 October 2022.
Base Salary: $80,000 per annum
Performance bonus: None.
Long term incentives: Subject to shareholder approval, Mr Quirin is entitled to 2,000,000 unlisted options with
an exercise price of $0.04 per share and an expiry date of 10 October 2024. The Options vest and become
exercisable as follows:
-
-
-
1/3 of the options will vest on the date that is six months after the appointment date;
1/3 of the options will vest on the date that is twelve months after the appointment date; and
1/3 of options will vest on the date that is eighteen months after the appointment date.
Term: Ongoing, subject to shareholder approval.
-
- Notice Period: None.
Mr Peter Hatfull– Non-Executive Director
Contract: Commenced on 30 November 2022.
Base Salary: $80,000 per annum
Performance bonus: None.
Long term incentives: None.
Term: Ongoing, subject to shareholder approval.
-
-
-
-
-
- Notice Period: None.
Mr Chris Grundy – Chief Financial Officer
-
-
Contract: Commenced on 21 November 2017.
Base Salary: $290,000 per annum (plus statutory superannuation entitlements) from 26 March 2021 and
increased to $315,000 per annum (plus statutory superannuation entitlements) from 01 May 2023.
-
Performance bonus: Determined at the sole discretion of the Board.
-
Term: No fixed term.
- Notice Period: 12 weeks.
-
Bonus: Mr Grundy is entitled to a discretionary bonus on an annual basis as determined by the Company.
Former Key Management Personnel
The following individuals are no longer key management personnel (KMP) but were considered to have been KMP during
the financial year ending 31 December 2022:
Dr James Ellingford – Executive Chairman (resigned)
Contract: Commenced on 20 November 2015.
Contract: Terminated on 30 November 2022
-
-
- Director’s Fee: $60,000 per annum (plus statutory superannuation entitlements) from 1 June 2020.
- Mernova Medicinal Inc.- Consultancy fee of $5,000 per month.
-
-
-
Audit and Risk Committee Fee: $6,000 per annum.
Remuneration and Nomination Committee Fee: $20,000 per annum.
Term: No fixed term.
Mr Adam Blumenthal – Non-Executive Director (resigned)
Contract: Commenced on 20 November 2015.
Contract: Terminated 19 October 2022
-
-
- Director’s Fee: $48,000 per annum (plus statutory superannuation entitlements).
- Mernova Medicinal Inc.- Consultancy fee of $5,000 per month.
-
-
-
Kunna Canada Limited and Kunna S.A.S – Director’s fee of $6,000 per month.
Remuneration and Nomination Committee Fee: $20,000 per annum.
Term: No fixed term.
30 | P a g e
Remuneration Report
F
Share-based Compensation
Melodiol Global Health Limited – Annual Report 2023
The Company rewards Directors for their performance and aligns their remuneration with the creation of shareholder
wealth by issuing shares, options and/or performance rights. Share-based compensation is at the discretion of the Board
and no individual has a contractual right to receive any guaranteed benefits.
Issue of shares
During the current financial year, shareholders the Company approved the issue of 61,257,192 shares to KMP as part of
their remuneration. refer to Table 4.
Options
During the current financial year, the Company approved the issue of 12,000,000 unlisted options and 2,732,213 listed
options to KMP as part of their remuneration, refer to Table 5 and Table 6.
Performance Rights
The performance rights are expensed over the performance period to which is consistent with the period over which
the services have been performed.
The fair value of the rights is determined based on the market price of the company’s shares at the grant date, with an
adjustment made to take into account the vesting period and expected dividends during that period that will not be
received by the employees.
The terms and conditions of each grant of performance rights affecting remuneration in the current or future reporting
period are as follows:
Code
Grant Date
Vesting date
Performance period
Expiry date
ME1PERR43
ME1PERR43
ME1PERR51
ME1PERR52
6 September 2021
6 September 2021
30 June 2023
27 October 2023
ME1PER53
10 November 2023
17 September 2022
17 September 2022
17 Jan 2024
31 Dec 2023 &
30 Jun 2024
31 Dec 2023
17 September 2021– 17 September 2023
17 September 2021– 17 September 2023
30 June 2023 – 17 January 2024
17 January 2022 – 30 June 2024
17 September 2023
17 September 2023
17 January 2024
27 October 2028
01January 2022– 30 June2023
10 November 2028
Value per
Performance
Right at Grant
Datei
$0.125
$0.125
$0.010
$0.007
$0.007
(i)
The assessed fair value at grant date of Performance Rights granted to the individuals is allocated equally
over the period from grant date to vesting date, and the amount is included in the remuneration tables
above.
31 | P a g e
Remuneration Report
F
Share-based Compensation (continued)
Melodiol Global Health Limited – Annual Report 2023
The performance rights that were granted, vested and forfeited during the year are as follows:
Name/code
William Lay
ME1PERR43
ME1PERR43
ME1PERR51
ME1PERR52
Chris Grundy
ME1PER53
Year
granted
2021
2021
2023
2023
2023
Balance at
start of
year
Granted
during year
Rights to performance rights
Vested/Exercised
Forfeited
Number
Number
Number
%
Number
%
Balance at end
of year
(unvested)
Number
Maximum
value yet to
vesti
$
5,000,000
5,000,000
-
-
-
-
7,500,000
50,000,000
(5,000,000)ii
-
-
25,000,000iii
100
-
-
50
(5,000,000)
-
-
-
-
-
-
-
-
7,500,000
25,000,000
-
-
75,000
175,000
-
15,000,000
15,000,000iii
-
-
(i)
(ii)
(iii)
The maximum value of the performance rights yet to vest has been determined as the amount of the grant
date fair value of the rights that is yet to be expensed. For the 2021 grant, the maximum value yet to vest
for this grant was estimated based on the share price of the company at the grant date. The minimum
value of performance rights yet to vest is nil, as the shares will be forfeited if the vesting conditions are
not met.
Exercised.
Vested.
Further information on the performance rights is set out in note 24 to the financial statements.
G
Equity Instruments Issued on Exercise of Remuneration Options
No remuneration options were exercised by KMP during the financial year (2022: Nil).
32 | P a g e
Remuneration Report
H
Transactions with KMP and Related Parties
(a)
Key Management Personnel Compensation
Details relating to key management personnel, including remuneration paid, are below.
Melodiol Global Health Limited – Annual Report 2023
Short-term benefits
Termination payments
Post-employment benefits
Share-based payments
(b)
Transactions and balances with related parties
During the year, the Group had transactions with related parties as follows:
EverBlu Capital Pty Ltd(i) – a company of which Adam Blumenthal is the Chairman
Capital raising fees payable in cash
Capital raising fees payable in shares
Legal fees
Corporate advisory payable in shares
Monthly retainer
IRESS service fees
Out of scope fees
Cash component of share issues
Balance owing to EverBlu Capital Pty Ltd at 31 December
Balance owing to Melodiol at 31 December
Everblu Capital Corporate Pty Ltd(i) – a company of which Adam Blumenthal is
the Chairman
Capital raising fees
Capital raising fees payable in shares
Monthly retainer
Debt restructuring fees
Business development and investor relations
Facilitation fees
Out of scope fees, including restructuring and corporate advice
Balance owing to EverBlu Capital Corporate Pty Ltd at 31 December
Balance owing to Melodiol at 31 December
The above fees are inclusive of GST.
2023
$
2022
$
1,586,628
-
34,111
906,458
2,527,197
1,380,632
144,000
50,241
136,679
1,711,553
2023
$
2022
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
308,996
829,258
-
70,000
495,000
3,399
-
-
1,706,653
899,258
-
149,838
3,774,815
13,095
-
-
-
-
3,937,748
3,774,815
-
(i) Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including through
companies that he controls, have not been disclosed above as they ceased being a related party.
33 | P a g e
Remuneration Report
H
Transactions with KMP and Related Parties (continued)
Suburban Holdings Pty Ltd – related party
Amount drawn down by Melodiol
Amount repaid
Balance owing at 31 December
International Water and Energy Savers Ltd - a company controlled by Boaz
Wachtel
Director’s Fees for Boaz Wachtel
Bonus for Boaz Wachtel payable in shares
Balance owing from Melodiol at 31 December
HBAM Holdings Inc - a company controlled by Bruce Linton
Director’s Fees for Bruce Linton
Balance owing from Melodiol at 31 December
BQ Advisory - a company controlled by Ben Quirin
Director’s Fees for Ben Quirin
Director remuneration options
Balance owing from Melodiol at 31 December
Jodi Scott
Loan repayments
Interest on loan
Lease payments
Extinguished debt
Balance owing from Melodiol at 31 December
Kelly Hoyt – a person related to Jodi Scott
Salary
Bonus
Balance owing from Melodiol at 31 December
Kathleen Scott– a person related to Jodi Scott
Salary
Bonus
Balance owing from Melodiol at 31 December
William Lay
Consulting fee
Director remuneration
Director incentive
Loan to ME1
Loan to SSH
Loan to Mernova
Balance owing from Melodiol at 31 December
Melodiol Global Health Limited – Annual Report 2023
2023
$
2022
$
-
-
-
1,000,001
-
-
80,000
-
53,333
82,720
46,667
80,000
2,802
82,802
363,863
42,691
71,343
(453,980)
-
163,465
-
163,465
142,493
-
142,493
222,538
75,028
408,333
(102,517)
-
-
102,517
80,000
40,000
40,000
93,504
23,346
18,413
-
-
136,861
7,136
17,306
386,680
-
-
-
-
-
-
-
-
-
-
18,327
81,673
100,000
(ii) Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including through
companies that he controls, have not been disclosed above as they ceased being a related party.
34 | P a g e
Remuneration Report
H
Transactions with KMP and Related Parties (continued)
Melodiol Global Health Limited – Annual Report 2023
Other Share and Option Transactions with Related Parties
2023
2022
Shares
Options
Performance
Rights
Shares
Options
EverBlu Capital Pty Ltd(i)
Broker fees
Issue of Shares - Corporate Advisory Mandateii
Share issue cost in February-22 Placement
Subtotal
EverBlu Capital Corporate Pty Ltd (i)
Share issue cost in August-22 Placement
Subtotal
International Water and Energy Savings
Director bonus – Boaz Watchel
Subtotal
James Ellingford
Director bonus – James Ellingford(ii)
Subtotal
HBAM Holding Inc
Equity incentive to Director’s remuneration – Bruce
Lintoniii
Subtotal
Quitin Alleaume Trust
Director’s fee – Ben Quirin
Subtotal
Noble House Consulting
Director’s remuneration -Will Lay
Director incentive
Consulting fee
Subtotal
Jodi Scott
Loan and loan interest repayment
Subtotal
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,732,213
2,732,213
2,732,213
2,732,213
2,000,000
2,000,000
10,000,000
25,000,000
7,500,000
50,000,000
25,000,000 10,000,000
62,500,000
44,972,436
44,972,436
-
2,000,000
-
2,000,000
-
-
57,971,032
57,971,032
- 175,000,000
- 175,000,000
2,000,000
2,000,000
4,000,000
4,000,000
-
-
-
-
-
-
10,000,000
10,000,000
(i)
(ii)
Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including
through companies that he controls, have not been disclosed above as they ceased being a related party.
Mr Ellingford resigned as a director on 30 November 2022. Any transactions past this date, including
through companies that he controls, have not been disclosed above as they ceased being a related party.
Terms and conditions
All transactions with related parties were reviewed by the Board and were made on normal commercial terms and
conditions and at market rates.
Other than the above, there were no other transactions with KMP or related parties during the year ended 31 December
2023.
I Additional Information
Voting and comments made at the Company’s 2023 Annual General Meeting (“AGM”):
At the 2023 AGM, 91.83% of the votes received supported the adoption of the remuneration report for the year
ended 31 December 2022. The Company did not receive any specific feedback at the AGM regarding its remuneration
practices.
End of Audited Remuneration Report
35 | P a g e
Crowe Audit Australia
ABN 13 969 921 386
Level 24, 1 O’Connell Street
Sydney NSW 2000
Main +61 (02) 9262 2155
Fax +61 (02) 9262 2190
www.crowe.com.au
Auditor’s Independence Declaration Under Section 307c of the
Corporations Act 2001 to the Directors of Melodiol Global
Health Limited
As lead engagement partner, I declare that, to the best of my knowledge and belief, during the year
ended 31 December 2023 there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Yours sincerely,
Crowe Audit Australia
John Haydon
Senior Partner
28 March 2024
Sydney
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© 2024 Findex (Aust) Pty Ltd
36
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Financial Year Ended 31 December 2023
Melodiol Global Health Limited – Annual Report 2023
Note
4
4
12
5(a)
5(b)
5(c)
13/14
10
5(d)
29
Revenue from continuing operations
Revenue
Other income
Expenses
Raw materials and consumables used
Loss on fair value adjustments
Administrative expenses
Depreciation and amortisation expenses
Employee benefit expenses
Impairment of intangibles and PPE
Impairment of loan
Other expenses
Loss on disposal of assets
Finance costs
(Loss) from continuing operations before income tax
Income tax expense
(Loss) from continuing operations after income tax
(Loss) from discontinued operations
Net result for the period
Other comprehensive income
Exchange differences on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive (loss) for the year
(Loss) for the year attributable to:
Non-controlling interest
Owners of Melodiol Global Health Australia Limited
Total comprehensive (loss) for the year attributable to:
Non-controlling interest
Owners of Melodiol Global Health Australia Limited
(Loss) per share for the year attributable to the members of
Melodiol Global Health Limited:
Basic and Diluted loss per share from continuing and discontinued
operations (cents)
Basic and Diluted loss per share from continuing operations
(cents)
7
7
2023
$000’s
2022
$000’s
18,921
799
(16,586)
(1,518)
(9,430)
(675)
(4,459)
(8,618)
(2,762)
(1,451)
(53)
(9,691)
(35,523)
3
(35,520)
(16,926)
(52,446)
6,236
305
(6,865)
(407)
(9,600)
(1,404)
(3,151)
(5,891)
-
(350)
(307)
(426)
(21,861)
(2)
(21,863)
(10,919)
(32,782)
1,027
1,027
1,525
1,525
(51,419)
(31,257)
-
(52,446)
(52,446)
-
(51,419)
(51,419)
(1.88)
(0.61)
-
(32,782)
(32,782)
-
(31,257)
(31,257)
(2.24)
(0.74)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the notes to the financial statements.
37 | P a g e
Consolidated Statement of Financial Position
As at 31 December 2023
Melodiol Global Health Limited – Annual Report 2023
Note
2023
$000’s
2022
$000’s
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Biological assets
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Lease liability
Borrowings
Total current liabilities
Non-Current liabilities
Lease liability
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued Capital
Reserves
Accumulated losses
Total equity
8
10
11
12
15
13
14
15
16
17
18
19
20
692
2,976
1,461
391
-
5,520
9,655
3,595
274
13,524
1,388
2,563
5,508
265
2,146
11,870
9,978
15,848
286
26,112
19,044
37,982
12,974
482
149
9,413
23,018
84
84
8,642
375
-
6,671
15,688
-
-
23,102
15,688
(4,058)
22,294
150,470
15,332
(169,860)
128,382
20,510
(126,598)
(4,058)
22,294
The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial
statements.
38 | P a g e
Consolidated Statement of Changes in Equity
For the Financial Year ended 31 December 2023
Melodiol Global Health Limited – Annual Report 2023
Foreign
Currency
Translation
Reserve
$000’s
1,383
-
1,525
Accumulated
Losses
$000’s
(94,823)
(32,782)
-
Total
$000’s
27,759
(32,782)
1,525
1,525
(32,782)
(31,257)
-
-
-
-
-
-
-
-
-
2,908
2,908
-
1,027
-
-
-
-
-
-
-
-
1,007
(126,598)
(126,598)
(52,446)
-
9,942
12,874
3,065
130
137
20
49
(425)
-
22,294
22,294
(52,446)
1,027
Issued
Capital
$000’s
Share-based
Payment
Reserve
$000’s
109,951
-
-
-
9,942
12,874
504
-
120
20
-
(5,029)
-
128,382
128,382
-
-
11,248
-
-
-
-
-
2,561
130
17
-
49
4,604
(1,007)
17,602
17,602
-
-
-
-
1,027
(52,446)
(51,419)
5,286
1,342
5,693
5,608
2,827
1,490
1,245
484
333
-
(2,845)
625
150,470
-
136
-
1,939
-
2
-
445
-
7
1,075
(9,809)
11,397
-
-
-
-
-
-
-
-
-
-
-
-
3,935
-
-
-
-
-
-
-
-
-
-
-
9,184
(169,860)
5,286
1,478
5,693
7,547
2,827
1,492
1,245
929
333
7
(1,770)
-
(4,058)
Group
At 1 January 2022
Loss for the year
Other comprehensive income
Total comprehensive income/(loss)
for the year after tax
Transactions with owners in their
capacity as owners:
Issue of share capital
Issue of shares for the acquisition
(see note 28)
Issue of equity for services
Share-based payments
Shares issued to Directors
Exercise of options
Embedded derivative - Convertible
Notes Options
Share issuance costs
Expired options
At 31 December 2022
At 1 January 2023
Loss for the year
Other comprehensive income
Total comprehensive income/(loss)
for the year after tax
Transactions with owners in their
capacity as owners:
Issue of share capital
Issue of shares for the acquisitions
Conversion of convertible notes
Issue of equity for services
Issue of equity to settle loans
Issue of equity for loan extensions
Issue of equity to extinguish liability
Share-based payments
Shares issued to Directors
Embedded derivative
Share issuance costs
Expired options
At 31 December 2023
The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial
statements.
39 | P a g e
Consolidated Statement of Cash Flows
For the Financial Year ended 31 December 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for research
Interest received
Operating cash flows from discontinued operations
Net cash used in operating activities
29
8(a)
Cash flows from investing activities
Payments for plant and equipment
Payments for intangibles
Cash acquired on acquisition of Health House
International Ltd
Loan to Health House International Ltd
Investing cash flows from discontinued operations
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from exercise of options
Proceeds from borrowings
Repayment of borrowings
Borrowing costs
Payment of share issue costs
Financing cash flows from discontinued operations
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect on exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
29
29
8
Melodiol Global Health Limited – Annual Report 2023
Note
2023
$000’s
2022
$000’s
19,250
(22,426)
(6)
5
(4,964)
(8,141)
(313)
-
232
-
-
(81)
5,124
-
565
(1,803)
(318)
(699)
4,636
7,505
(717)
1,388
21
692
6,484
(20,463)
(86)
-
(3,241)
(17,306)
(258)
(5)
-
(2,100)
79
(2,284)
9,942
20
1,457
(266)
(117)
(623)
3,398
13,811
(5,779)
7,184
(17)
1,388
The Consolidated Statement of Cash Flows should read in conjunction with the notes to the financial statements.
40 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Corporate Information
Melodiol Global Health Limited – Annual Report 2023
Melodiol Global Health Limited (referred to as “Melodiol” or the “Company”) is a company domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange.
The consolidated financial statements of the Company as at and for the year ended 31 December 2023 comprise the
Company and its subsidiaries (together referred to as the “Group” or the “Group”).
The Registered Office is disclosed in the Corporate Directory of the Annual Report.
(b) Basis of Preparation
Statement of compliance
The consolidated financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The
consolidated financial statements comply with International Financial Reporting Standards (“IFRS”) adopted by the
International Accounting Standards Board (“IASB”). Melodiol is a for-profit entity for the purpose of preparing the
financial statements.
The annual report was authorised for issue by the Board of Directors on 28 March 2024
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through
other comprehensive income and derivative financial instruments.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 30.
New, revised or amended standards and interpretations adopted by the Group
The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The new and revised
Standards and Interpretations did not have any significant impact.
New standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 31 December 2023. The
Group's assessment of the impact of these new or amended Accounting Standards and Interpretations is that they are
not applicable.
41 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in note 2.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a loss of $52,446,000 (2022: $32,782,000) and had net
cash outflows from operating activities of $8,141,000 (2022: $17,306,000) for the year ended 31 December 2023. The
Group had a deficiency between current assets and current liabilities of $17,498,000 (2022: $3,818,000 surplus) as at
31 December 2023.
As a result of these matters, there is a material uncertainty related to events or conditions that may cast significant
doubt on whether the Group will continue as a going concern and, therefore, whether it will realise its assets and
settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial
report.
The continuing viability of the Group and its ability to continue as a going concern and meet its debts and
commitments as they fall due are dependent upon the Group being successful with the following factors:
The ability of the Group to raise additional funds from shareholders, new investors and debt markets. The
Group has successfully conducted a number of capital raises in the current and recent years. When taking
these into account, there is a reasonable expectation that alternative sources of funding can be sourced, as
and when required. Further, the Company understands it will require further funding to continue to execute
its growth strategy as planned. In its determination on going concern, the Board placed significant reliance
upon the representations of its Corporate Advisor with respect to its confidence in its ability to continue
raising capital on behalf of the Company;
Increased revenue from opportunities with existing and new customers and sales arrangements as they are
realised into sales revenue in the Group’s North American and European operations, or should this fail the
closure of underperforming business units; and
Effective monitoring and reduction of the Group’s overhead expenditures, including the continued realisation
of head office cost reductions.
In the event that the Group is unable to achieve the matters detailed above, it may not be able to continue as a going
concern and therefore the Group may not be able to realise its assets and extinguish its liabilities in the ordinary course
of operations and at the amounts stated in the financial statements.
No adjustments have been made to the recoverability and classification of recorded asset values and the amount and
classification of liabilities that might be necessary should the Group and the Company not continue as going concerns.
42 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(c) Principles of Consolidation
Melodiol Global Health Limited – Annual Report 2023
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Melodiol as at 31
December 2023 and the results of all subsidiaries for the year then ended. Melodiol and its subsidiaries together are
referred to in this financial report as the Group.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date
on which control commences until the date on which control ceases.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board. Management has determined that based on
the report reviewed by the Board and used to make strategic decisions, that the Group has four reportable segments.
(e) Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the Company operates (“functional currency”). The consolidated financial statements
are presented in Australian dollars, which is Melodiol’s functional and presentation currency.
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191
and in accordance with that instrument, amounts in the consolidated financial statements and directors’ report have
been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Transactions and balances
Foreign currency transactions are translated into Australian Dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
43 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(e) Foreign Currency Translation (continued)
Melodiol Global Health Limited – Annual Report 2023
Group companies
The results and financial position of foreign entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
Assets and liabilities for each statement of financial position account presented are translated at the closing
rate at the date of that statement of financial position;
Income and expenses for each statement of profit or loss and other comprehensive income account are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of
the transactions); and
All resulting exchange differences are recognised in other comprehensive income and foreign currently
translation reserve.
(f)
Revenue Recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
The Group generates revenue through the sale of a range of products across its operations:
Mernova Medicinal Inc (“MMI”) generates revenue from the production and distribution of pharmaceutical-
grade and recreational cannabis to large retailers and wholesalers throughout North America.
Health House International Ltd (“HHI”) generates revenue from the distribution of pharmaceutical products to
the United Kingdom, Europe and Australia.
Sierra Sage Herbs LLC (“SSH”) generates revenue from the production and distribution of personal beauty and
health products through a number of distribution channels, including through traditional wholesaling and
retailing channels, as well as via online distribution channels such as Amazon. During the year, SSH discontinued
it’s operations.
Creso Pharma Switzerland (“CPS”) generates revenue from the production and distribution of medicinal
products for both the human and animal markets through wholesale and retail distribution chains.
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. Revenue is recorded net of sales discounts and rebates,
duties and taxes.
44 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods,
which is generally at the time of delivery. Where delivery cannot be determined on an individual order basis, a provision
is recognised for deferred sales as disclosed in note 2 to properly recognise revenue in the period in which it has been
earned.
Goods sold via online systems, such as Amazon, pose a risk of goods being returned or failing to be successfully
delivered. The Group recognises a provision to reflect these risks as disclosed in note 2.
Interest revenue
Interest revenue is recognised as it accrues, using the effective interest method.
(g)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
45 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(h) Trade and Other Receivables
Melodiol Global Health Limited – Annual Report 2023
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(i) Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives to
estimate residual value. The following estimated useful lives are used in the calculation of depreciation:
Buildings and Improvements
Plant and Equipment
Machinery Equipment
Irrigation and Lighting
Security Systems
30 years
3 – 10 years
5 – 10 years
5 – 10 years
5 – 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit
or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect
of those assets to retained earnings.
(j)
Intangible Assets
The Group has acquired significant intangible assets as a result of business acquisitions. Intangible assets acquired as
part of a business combination, other than goodwill, are initially measured at their fair value at the date of the
acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Intellectual property is considered to provide a benefit to the Group over a finite useful life and is amortised using the
straight-line method over the following periods:
Patents and trademarks
Licenses (Canadian)
Client relationships
Useful life
5 – 10 years
5 – 30 years
5 years
46 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Intellectual Property
The estimated useful life and amortisation method are reviewed at the end of each reporting year, with the effect of
any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives are
comprised of certain acquired brand name, product rights, and licences to grow which are carried at cost less
accumulated impairment losses. Indefinite life intangible assets are not amortised but are tested for impairment
annually and when there is an indication of impairment.
Licences
Significant costs associated with licences are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 3 to 30 years.
(k) Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
(l) Trade and Other Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received whether or not billed to
the Group.
(m) Discontinued Operations
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount
as profit or loss after tax from discontinued operations in the statement of profit or loss.
Additional disclosures are provided in Note 29. All other notes to the financial statements include amounts for
continuing operations, unless indicated otherwise.
47 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(n) Borrowings
Melodiol Global Health Limited – Annual Report 2023
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fees are deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fees are capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Convertible Notes
When a conversion feature of a debt instrument results in the conversion of a fixed amount of stated principal into a
fixed number of shares, it satisfies the ‘fixed for fixed’ criterion and, therefore, is classified as an equity instrument.
The value of the liability component and the equity conversion component were determined at the date the instrument
was issued.
The fair value of the liability component at inception is calculated using a market interest rate for an equivalent
instrument without a conversion option.
(o) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated.
(p) Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up
to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
48 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(q) Share-based Payments
Melodiol Global Health Limited – Annual Report 2023
Equity-settled share-based compensation benefits are provided to key management personnel, employees and outside
parties for services provided.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees and outside
parties in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined
using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the
impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award
is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
49 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(r) Contributed Equity
Ordinary shares are classified as equity.
Melodiol Global Health Limited – Annual Report 2023
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition
of a business are not included in the cost of the acquisition as part of the purchase consideration.
(s) Goods and Services Tax (“GST”)
Revenue, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables area stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flows.
(t) Current and Non-Current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
50 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(u) Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a weighted
average basis. Cost comprises direct materials and delivery costs, direct labour and import duties and other taxes. Costs
of purchased inventory are determined after deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Inventories of harvested cannabis and finished goods are valued at the lower of cost and net realisable value. Inventories
of harvested cannabis are transferred from biological assets at their fair value less cost to sell up to the point of harvest,
which becomes the initial deemed cost. All subsequent direct and indirect post-harvest costs are capitalised to inventory
as incurred, including labour related costs, consumables, materials, packaging supplies, utilities, facilities costs, quality
and testing costs, and production related depreciation. Net realisable value is determined as the estimated selling price
in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make
the sale. Inventories for resale and supplies and consumables are valued at the lower of costs and net realisable value,
with cost determined using the weighted average cost basis. The cost of goods sold is comprised of the cost of
inventories expensed in the period and the direct and indirect costs of shipping and fulfilment including labour related
costs, materials, shipping costs, customs and duties, royalties, utilities, facilities costs, and shipping and fulfilment
related depreciation.
AASB 141 Agriculture (Biological assets)
The Group’s biological assets consist of cannabis plants. The Group capitalises all the direct and indirect costs as incurred
related to the biological transformation of the biological assets between the point of initial recognition and the point of
harvest including labour related costs, grow consumables, materials, utilities, facilities costs, quality and testing costs,
and production related depreciation. The Group measures biological assets at fair value less cost to sell up to the point
of harvest, which becomes the basis for the cost inventories after harvest. Costs to sell includes post-harvest production,
shipping and fulfilment costs. The net unrealised gains or losses arising from changes in fair value less cost to sell during
biological transformation are included in profit or loss of the related period. Seeds are measured at fair value. The
Company recognises the mother plants used for cloning the cannabis plants through the statement of profit or loss as
they have a useful life less than one year.
51 | P a g e
Notes to the Consolidated Financial Statements
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
(v) Fair value measurement
Melodiol Global Health Limited – Annual Report 2023
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
(w) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are carried in the statement of financial position at fair value with
net changes in fair value recognised in the statement of profit or loss.
The category includes derivative instruments, including imbedded derivatives, with financial liability or non-financial
host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are
not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded
derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs
if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise
be required or a reclassification of a financial liability out of fair value through profit or loss category.
52 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 2
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events management believes to be reasonable under the circumstances. The resulting accounting judgements
and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below.
Share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either a hybrid Monte Carlo or
the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the
carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity. The valuation model inputs are disclosed in note 24 and include forward-looking assumptions.
Revenue from contracts with customers involving sale of goods
When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the Group
is considered to be the point of delivery of the goods to the customer, as this is deemed to be the time that the customer
obtains control of the promised goods and therefore the benefits of unimpeded access.
Fair value measurement
The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable
inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different
levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
-
-
-
Level 1: Quoted prices in active markets for identical items (unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1 inputs
Level 3: Unobservable inputs (i.e. not derived from market data)
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant
effect on the fair value measurements of the item. Transfers between items between levels are recognised in the period
they occur. The Group measures a number of items at fair value, including the following which are considered level 3 in
the fair value hierarchy:
-
-
Biological assets
Embedded derivative portion of the convertible notes
For more detailed information in relation to the fair value measurement of the items above, please refer to the
applicable notes.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at
each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions (refer
to note 14).
53 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 2
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS AND ASSUMPTIONS (CONTINUED)
Biological assets and inventory
Biological assets
A subsidiary of the Group, Mernova Medicinal Inc. (“MMI”) grows and manufactures a range of biological assets and
harvested cannabis inventories. Management is required to make a number of estimates in calculating the fair value of
biological assets and harvested cannabis inventory including a number of assumptions, such as estimating the stage of
growth of the cannabis, harvesting costs, sales price and expected yields. Refer to note 12 for further detail.
Obsolescence
The Group grows and manufactures a range of biological products through its subsidiary MMI. These products are
subject to potential obsolescence. Management is required to make assumptions in relation to obsolescence of
products and product categories. An inventory provision is recognised where the realisable value from sale of inventory
is estimated to be lower than the inventory’s carrying value. Inventory provisions for different products and product
categories are estimated based on various factors, including expected sales profile, prevailing sales prices, product
deterioration rates, seasonality and expected losses associated with slow-moving inventory items as well as on specific
identification.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience, historical collection rates and
forward-looking information that is available. The allowance for expected credit losses, as disclosed in note 10 , is
calculated based on the information available at the time of preparation. The actual credit losses in future years may be
higher or lower.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
54 | P a g e
Notes to the Consolidated Financial Statements
NOTE 3
SEGMENT INFORMATION
Melodiol Global Health Limited – Annual Report 2023
The Group requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker (“CODM”) in order to allocate resources to the
segments and to assess their performance. On this basis, the Group’s reportable segments under AASB 8 are as follows:
•
Europe includes Health House International Limited (“HHI”), UK division, who distribute pharmaceutical products
and Creso Pharma Switzerland GmbH (“Switzerland”) which includes the development and commercialisation of its
nutraceutical products – located in Switzerland.
• Canada includes the operating companies; Mernova Medicinal Inc (“Mernova”), Halucenex Life Sciences Inc. and
(“Halucenex”), Creso Impactive Ltd (“Impactive”), together with corporate holding companies Creso Canada
Corporate Limited, Creso Canada Limited, 3321739 Nova Scotia Limited, 4340965 Nova Scotia Limited ("4NS”) and
Kunna Canada Limited, all located in Canada. Impactive, Halucenex and 4NS discontinued operations during the
year.
• United States of America (USA) includes the operating company Sierra Sage Herbs LLC which develops and sells
personal beauty and health products, together with corporate holding company Creso Pharma US, Inc., all located
in USA. All USA compaines discontinued operations during the year.
• Asia Pacific includes the parent company Melodiol Global Health Limited (“Melodiol”) which provides the Group’s
corporate administration – located in Australia and Health House International Limited (“HHI”), Australia division,
who distribute pharmaceutical products.
Such structural organisation is determined by the nature of risks and returns associated with each business segment
and defines the management structure as well as the internal reporting system. It represents the basis on which the
group reports its primary segment information to the Board.
The following table presents details of revenue and operating profit by business segment as well as reconciliation
between the information disclosed for reportable segments and the aggregated information in the financial statements.
The information disclosed in the table below is derived directly from the internal financial reporting system used by the
Board of Directors to monitor and evaluate the performance of our operating segments separately.
Year ended 31 December
2023
Revenue
Royalty income
Total segment revenue
Other income
Asia
Pacific
$000’s
7,349
-
7,349
680
Europe
Canada
USA
$000’s
$000’s
$000’s
All other
segments
$000’s
4,636
24
4,660
6,936
-
6,936
30
89
-
-
-
-
Loss before tax expensei
Total Segment Assets
Total Segment Liabilities
(26,306)
6,047
14,559
(2,345)
622
1,609
(6,872)
12,244
2,863
-
131
4,071
Total
$000’s
18,921
-
18,921
799
(35,523)
19,044
23,102
-
(24)
(24)
-
-
-
-
(i)
Included in profit and loss are impairments to operating segments of the Group as follows:
Year ended 31 December
2023
Impairment of intangible
assets and investments
Asia
Pacific
$000’s
11,142
Europe
Canada
USA
$000’s
$000’s
$000’s
All other
segments
$000’s
-
-
-
-
Total
$000’s
11,142
55 | P a g e
Notes to the Consolidated Financial Statements
NOTE 3
SEGMENT INFORMATION (CONTINUED)
Year ended 31 December
2022
Revenue
Total segment revenue
Other income
Asia
Pacific
$000’s
Europe
Canada
USA
$000’s
$000’s
$000’s
-
-
-
84
1,846
192
2,038
4,390
-
4,390
-
221
-
-
-
-
Loss before in tax expense
Total Segment Assets
Total Segment Liabilities
(6,023)
3,113
6,067
(7,931)
6,490
183
(7,907)
21,671
1,114
-
6,708
8,324
Europe
Canada
USA
$000’s
5,891
$000’s
$000’s
-
-
-
Year ended 31 December
2022
Impairment of intangible
assets
Asia
Pacific
$000’s
-
NOTE 4
REVENUE AND OTHER INCOME
Revenue from continuing operations
Revenue from sale of products
Other income
Interest received
Other Income
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
Major product lines
Pharmaceutical products
Nutraceutical products
Cannabis products
Total
Geographical regions
Asia Pacific
Europe
Canada
Total
Timing of revenue recognition
Goods transferred at a point in time
Total
Melodiol Global Health Limited – Annual Report 2023
South
America
$000’s
-
(192)
(192)
-
-
-
-
All other
segments
$000’s
Total
$000’s
6,236
-
6,236
305
(21,861)
37,982
15,688
Total
$000’s
5,891
2023
$000’s
2022
$000’s
18,921
18,921
679
120
799
7,349
4,636
6,936
18,921
7,349
4,636
6,936
18,921
18,921
18,921
6,236
6,236
84
221
305
-
1,846
4,390
6,236
-
1,846
4,390
6,236
6,236
6,236
56 | P a g e
Notes to the Consolidated Financial Statements
NOTE 5
EXPENSES
(a) Administrative expenses
Accounting and company secretarial fees
Travel costs
General and administration expenses
Compliance and regulatory expenses
Consulting fees
Corporate advisory and business development
Legal fees
Investor and Media Relations
Marketing
US based Marketing & Media Relations
(b) Depreciation and amortisation expense
Total depreciation per note 13
Less: capitalised to inventory
Amortisation expense per note 14
(c) Employee benefit expenses
Director fees
Wages and salaries
Recruitment fees
Superannuation
Other employee expenses
(d) Finance costs
Interest Expense
Bank Charges
Capital Raising Fees
Loan Settlement Fees
Realised Foreign Exchange Gain/Loss
Gain on embedded derivative
Loss on extinguish of liability
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
1,838
144
805
1,097
2,103
1,588
714
347
794
-
9,430
691
(507)
491
675
962
2,249
88
189
971
4,459
2,384
42
726
5,695
(36)
-
880
9,691
2,232
257
636
481
3,374
674
1,021
486
387
52
9,600
620
(629)
1,413
1,404
1,301
1,605
4
95
146
3,151
34
(16)
176
1
15
(17)
235
426
57 | P a g e
Notes to the Consolidated Financial Statements
NOTE 6
INCOME TAX EXPENSE
The components of tax expense comprise:
Current tax
Adjustments for current tax of prior periods
(a)
Income tax expense reported in the of profit or loss and other comprehensive
income
The prima facie tax on loss from ordinary activities before income tax is
reconciled to the income tax as follows:
Loss before income tax expense
Prima facie tax benefit on loss before income tax at 25% (2022: 25%)
(b) Tax effect of:
Tax effect on different tax rate of overseas subsidiaries
Share-based payments
Travel expenses
Legal expenses
Capital raising costs
Others non-deductible expenses
Temporary differences
Tax losses not recognised
Total
(c) Deferred tax assets not brought to account are:
Carried forward losses
Total
The benefit for tax losses will only be obtained if:
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
24
24
2
2
(52,443)
(13,111)
(32,780)
(8,195)
1,912
105
-
-
(384)
6,197
(1,090)
6,390
24
2,518
33
57
251
(441)
-
(1,162)
6,941
2
52,323
52,323
35,266
35,266
The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the losses to be realised; and
The losses are transferred to an eligible entity in the Group; and
The Group continues to comply with the conditions for deductibility imposed by tax legislation; and
No changes in tax legislation adversely affect the consolidated in realising the benefit from the deduction
for the losses.
58 | P a g e
Notes to the Consolidated Financial Statements
NOTE 7
LOSS PER SHARE
Melodiol Global Health Limited – Annual Report 2023
Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of
the Company by the weighted average number of ordinary shares outstanding during the year.
Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares.
Net loss for the year
Non-controlling interest
Net loss for the year attributable to the owners of Melodiol Global Health Limited
2023
$000’s
(52,446)
-
(52,446)
2022
$000’s
(32,782)
-
(32,782)
Weighted average number of ordinary shares for basic and diluted loss per
share.
2,788,444,701
1,466,246,213
Options on issue are not considered dilutive to the earnings per share as the Company is in a loss-making position.
Continuing and discontinuing operations
Basic and diluted loss per share (cents)
Discontinuing operations
Basic and diluted loss per share (cents)
NOTE 8
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
(1.88)
(0.61)
(2.24)
(0.74)
692
692
1,388
1,388
Some cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made in varying
periods, depending on the immediate cash requirements of the Group and earn interest at the respective short-term
deposit rate, currently 0.85% (2022: 0.01%), this rate can change frequently.
(a) Reconciliation of net loss after tax to net cash flows from operations
Loss for the financial year
(52,446)
(32,782)
Adjustments for:
Depreciation and amortisation
(Gain) on foreign exchange
Share based payments
NRV adjustments to inventory and fair value adjustments to biological assets
Loss on disposal of tangible assets
Impairment of intangible assets
Impairment of tangible assets
Impairment of investments
Issue of equity for services
Issue of equity to extinguish liability
Absorption of depreciation costs in biological assets and inventory (see note 5)
Accretion of finance costs/income on convertible notes
Issue of equity to settle interest charges
Other non-cash items
Changes in assets and liabilities
Receivables
Inventories
Biological assets
Trade and other payables
Provisions
Net cash used in operating activities
NOTE 8CASH AND CASH EQUIVALENTS (CONTINUED)
2,027
(21)
1,074
1,541
53
17,612
238
2,762
6,475
6,532
(507)
1,328
498
(152)
(171)
4,329
(126)
706
107
(8,141)
2,578
(17)
130
(3,448)
307
12,521
-
-
3,202
-
(629)
-
-
147
(196)
(1,724)
192
2,270
143
(17,306)
59 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
(b) Non-cash investing and financing activities
2023
$000’s
2022
$000’s
Equity issued for the conversion of convertible notes
Equity issued as share issue costs
Issue of shares and options for the acquisitions of Health House International Ltd (see
note 28)
Issue of shares for the acquisitions of Sierra Sage Herbs LLC
Issue of share to settle loans
(5,693)
(1,073)
1,479
-
(2,827)
(49)
(4,604)
-
12,874
-
(c) Changes in liabilities arising from financing activities
Movement in debt instruments
Sierra Sage Herbs LLC acquisition
Abby & Finn Investments (note 10)
Health House
acquisition
International Ltd
Movement in debt instruments
Sierra Sage Herbs LLC acquisition
31 December 2022
$000’s
Cash Flows
$000’s
Non-cash Flows
$000’s
31 December 2023
$000’s
3,293
3,378
-
-
6,671
(2,847)
(369)
-
(182)
(3,398)
(446)
(106)
2,762
825
3,035
3,105
2,903
2,762
643
9,413
31 December 2021
$000’s
Cash Flows
$000’s
Non-cash Flows
$000’s
31 December 2022
$000’s
-
-
-
4,471
-
4,471
(1,178)
3,378
2,200
3,293
3,378
6,671
NOTE 9
INVESTMENT USING EQUITY METHOD
Interests in associate is accounted for using the equity method of accounting. Information relating to associates is set
out below:
Name
Activity
Principal place of business/
Country of incorporation
CLV Frontier Brands Pty Ltd
Developing terpene beers and
non-alcoholic beverages
Estonia/
Australia
Reconciliation of the group’s carrying amount
Opening carrying amount
Share of (loss) after income tax
Closing carrying amount
Ownership interest
2022
2023
%
%
33⅓%
33⅓%
-
-
-
-
-
-
60 | P a g e
Notes to the Consolidated Financial Statements
NOTE 10 TRADE AND OTHER RECEIVABLES
Trade debtors
Less: provision for expected credit losses
Value added taxes receivable
Other deposits and receivables
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
2,394
(595)
13
1,164
2,976
1,939
(47)
24
647
2,563
Allowance for expected credit losses
A provision for credit loss of $595,000 was recognised in the income statement for the year ended 31 December
2023 (2022: $47,000).
During the year the Company provided $2,762,000 against a loan due from Abby & Finn that was deemed to be
irrecoverable, see notes 8 (C) and 18 for further details.
The ageing for Trade debtors is as follows; December $1,033,000, November $556,000, October $283,000,
September and older $522,000.
NOTE 11
INVENTORIES
Finished goods
Work in progress
Consumables
2023
$000’s
2022
$000’s
360
1,041
60
1,461
1,842
3,416
250
5,508
During the year ended 31 December 2023, the Group gained $1,681,000 (2022: gained $590,000) of fair value
adjustments on the growth of its biological assets included in inventory sold. As at 31 December 2023, the Group holds
693 kilograms of harvested cannabis (2022: 791 kilograms).
Inventories recognised as an expense during the year ended 31 December 2023 amounted to $17,282,000 (2022:
$6,695,000). During the year a gain of $599,000 (2022: charge of $1,703,000) was recognised in relation to product.
NOTE 12
BIOLOGICAL ASSETS
The Group’s biological assets consist of 4,768 cannabis plants as at 31 December 2023 (2022: 4,313 cannabis plants).
The continuity of biological assets is as follows:
Carrying amount at 1 January
Production costs capitalised
Increase/(decrease) in FVLCS due to biological transformation
Foreign exchange translation
Less: Transfer to inventory upon harvest
Carrying amount at 31 December
2023
$000’s
2022
$000’s
265
5,352
(1,518)
(30)
(3,678)
391
457
5,025
(407)
8
(4,818)
265
The fair value of biological assets is determined using a valuation model to estimate expected harvest yield per plant
applied to the estimated price per gram less processing and selling costs. The expected cash flow model assumes the
biological assets as at 31 December 2023 will grow to maturity, be harvested and converted into finished goods
inventory and sold to Canadian and overseas customers.
61 | P a g e
Notes to the Consolidated Financial Statements
NOTE 12
BIOLOGICAL ASSETS (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
The sales price used in the valuation of biological assets is based on the average expected selling price of cannabis
products and can vary based on different strains being grown. Selling costs vary depending on methods of selling and
are considered based on the expected method of selling and the determined additional costs which would be incurred.
Expected yields for the cannabis plant is also subject to a variety of factors, such as strains being grown, length of
growing cycle, and space allocated for growing.
The Group’s method of accounting for biological assets attributes value accretion on a straight-line basis throughout
the life of the biological asset from initial cloning to the point of harvest.
Management reviews all significant inputs based on historical information obtained as well as based on planned
production schedules. Only when there is a material change from expected fair value used for cannabis does the Group
make any adjustments to the fair value used. During the year, there was no material change to these inputs and
therefore there has been no change in the determined fair value per plant.
Dried Flower
The dried flower model utilises the following significant assumptions:
Weighted average of expected loss of plants until harvest
Expected yields for cannabis plants (average grams per plant)
Expected number of growing weeks
Weighted average number of growing weeks completed as a
percentage of total growing weeks at period-end
Estimated selling price per gram
After harvest costs to complete and sell per gram
Reasonable margin on after harvest costs to complete and sell per gram
Shake
The shake model utilises the following significant assumptions:
Expected yields for cannabis plants (average grams per plant)
Expected number of growing weeks
Estimated selling price per gram
After harvest costs to complete and sell per gram
Reasonable margin on after harvest costs to complete and sell per gram
Weighted Average
31 December 2023
5%
40
12
56%
C$4.00
C$0.80
C$3.20
Weighted Average
31 December 2023
20
12
C$0.00
C$0.00
C$0.00
Weighted Average
31 December 2022
5%
37
12
57%
C$4.00
C$1.22
C$2.78
Weighted Average
31 December 2022
11
12
C$0.00
C$0.00
C$0.00
Sensitivity analysis
Assuming all other unobservable inputs are held constant, management has quantified the sensitivity of the inputs and
determined the following:
Selling price per gram – a decrease in the average selling price per gram by 10% would result in the biological
asset value decreasing by C$49,000 and inventory decreasing by C$97,000.
Harvest yield per plant – a decrease in the harvest yield per plant of 10% would result in the biological asset
value decreasing by C$82,000.
These inputs are level 3 on the fair value hierarchy and are subject to volatility in market prices, unanticipated regulatory
changes, harvest yields, loss of crops, and several uncontrollable factors, which could significantly affect the fair value of
biological assets in future periods. The average exchange rate is 1.1157 CAD/AUD.
Other disclosures
No cannabis, whether as finished goods or biological assets, were not pledged as security for the Group’s loans or
borrowings in 2023 (2022: none).
At 31 December 2023, the Group had no commitments in relation to growing its cannabis (2022: nil).
62 | P a g e
Notes to the Consolidated Financial Statements
NOTE 13
PROPERTY, PLANT AND EQUIPMENT
Opening net book amount
Additions (Capital Expenditure and Acquired assets)
Disposals
Depreciation charge
Provision for impairment
Foreign exchange translation
Closing net book amount
Cost
Accumulated depreciation
Net book amount
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
9,978
727
(53)
(1,055)
(238)
296
9,655
13,073
(3,418)
9,655
10,436
364
(307)
(663)
-
148
9,978
12,340
(2,362)
9,978
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Disposals
Provision
for
impairm’t
Foreign
currency
fluctuation
$000’s
Deprec’n
expense
Balance at
31 Dec 2023
$000’s
$000’s
Balance at
1 Jan 2023
Additions
$000’s
$000’s
Acquired
on
acquisition
$000’s
387
8,082
203
149
936
221
-
9,978
-
-
163
3
142
4
-
312
-
-
84
-
-
-
331
415
Land
Buildings &
Improvement
Plant and equipment
Machinery &
Equipment
Irrigation & Lighting
Security System
Other assets
Total
$000’s
$000’s
-
-
-
(1)
(52)
-
-
(53)
-
(26)
-
-
-
(212)
(238)
4
48
(20)
49
62
3
150
296
-
(310)
(94)
(85)
(269)
(58)
(239)
(1,055)
391
7,820
310
115
819
170
30
9,655
Balance at
1 Jan 2022
Additions
Acquired on
acquisition
Disposals
$000’s
$000’s
$000’s
$000’s
Foreign
currency
fluctuation
$000’s
Depreciation
expense
Balance at
31 Dec 2022
$000’s
$000’s
382
8,210
191
185
1,199
269
10,436
-
100
59
1
178
5
343
-
-
21
-
-
-
21
-
-
-
-
(307)i
-
(307)
5
113
4
4
18
4
148
-
(341)
(72)
(41)
(152)
(57)
(663)
387
8,082
203
149
936
221
9,978
Land
Buildings & Improvement
Plant and equipment
Machine & Equipment
Irrigation & Lighting
Security System
Total
(i)
During the period, the Group reviewed the plant and equipment in use and determined that irrigation and
lighting equipment with a carrying value of $53,000 (2022: $307,000) was obsolete or otherwise no longer
providing ongoing economic value to the Group. As a result, the Group recognised a loss on disposal of
the equipment equal to its carrying value during the period.
63 | P a g e
Notes to the Consolidated Financial Statements
NOTE 14
INTANGIBLE ASSETS
Licences (Canadian) (i)
Intellectual property acquired on acquisition
Goodwill acquired on acquisition (ii)
Intellectual property purchased
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
103
-
3,462
30
3,595
280
15,560
-
8
15,848
(i)
(ii)
Licences (Canadian)
Comprise the cannabis cultivation licence granted by Health Canada to Mernova Medicinal Inc in March 2019.
The directors have considered the recoverability of the Canadian licence. The Mernova facility commenced
cultivation in 2019, its operations have grown continuously since then and the directors are confident of the
growth prospects of the business.
Goodwill acquired on acquisition
Comprises of Goodwill acquired on the acquisition of Health House International Limited (see note 28) for
details).
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 January 2023
Additions
Acquired on acquisition (see note 28)
Impairment from discontinuing operationsi
Impairment from continuing operationsi
Foreign exchange translation
Amortisation expense
Balance at 31 December 2023
Remaining amortisation period (years)
Consolidated
Balance at 1 January 2022
Additions
Acquired on acquisition (see note 28)
Impairment from discontinuing operationsi
Impairment from continuing operationsi
Foreign exchange translation
Amortisation expense
Balance at 31 December 2022
Licences
(Canadian)
$000’s
280
-
-
-
-
4
(181)
103
25
Licences
(Canadian)
$000’s
1,156
-
-
-
-
(28)
(848)
280
Intellectual
Property
$000’s
15,568
-
-
(9,232)
(5,928)
142
(520)
30
5
Intellectual
Property
$000’s
7,158
5
18,403
(6,630)
(3,459)
1,158
(1,067)
15,568
Computer
Software
$000’s
-
-
-
-
-
-
-
-
-
Computer
Software
$000’s
-
-
-
-
-
-
-
-
Goodwill
$000’s
-
-
5,914
-
(2,452)
-
-
3,462
-
Goodwill
$000’s
-
-
2,429
-
(2,432)
3
-
-
Total
$000’s
15,848
-
5,914
(9,232)
(8,380)
146
(701)
3,595
Total
$000’s
8,314
5
20,832
(6,630)
(5,891)
1,133
(1,915)
15,848
(i)
The Group conducted impairment testing as detailed below. As a result, an impairment charge against
intangible assets of $17,612,000 (2022: $12,521,000) for continued operations was recognised during the
period. Note 3 discloses the breakdown of impairment by segment.
64 | P a g e
Notes to the Consolidated Financial Statements
NOTE 14
INTANGIBLE ASSETS (CONTINUED)
Impairment indicators
Melodiol Global Health Limited – Annual Report 2023
As noted in note 1(k), at the end of each reporting period, the Group assesses whether there were events or changes in
circumstances that would indicate that a Cash Generating Unit (“CGU”) was impaired. The following factors were
identified in the consideration of impairment indicators:
The Mernova CGU of the Company’s business is in its relatively early phase and needs to continue its
development to grow its revenues and become cash flow positive.
The Swiss CGU of the Company’s business has been affected by changes in the regulations of its products in its
principal markets in Europe, leading to the need to re-formulate the products and rediscuss them with its
distribution partners for those markets.
The Swiss IP CGU of the Company’s business holds intellectual property rights acquired from Sierra Sage Herbs.
The Health House UK/Europe CGU was acquired on 16 May 2023, the company distributes pharmaceutical
products to UK, Europe and Asia.
The Health House Australia CGU was acquired on 16 May 2023, the company distributes pharmaceutical
products in Australia.
Impairment Testing – Value-in-use
Mernova Cannabis Operations CGU
The Group’s Mernova Cannabis operations CGU represents its operations dedicated to the cultivation, processing and
sale of cannabis to both wholesale and retail customers. This CGU is attributed to the Group’s Canadian operating
segment.
The impairment testing performed at 31 December 2023 supported the recoverable amount of the CGU and did not
result in any impairment charge during the period (2022: $Nil).
Switzerland Research & Development CGU
The Group’s Switzerland Research & Development CGU represents its operations dedicated to the research and
development of hemp and cannabis biotechnology, including the development of novel formulations and delivery
forms, and the sale and distribution of hemp derived products. This CGU is attributed to the Company’s European
operating segment.
The impairment testing performed at 31 December 2023 supported the recoverable amount of the CGU and did not
result in any impairment charge during the period (2022: $Nil).
Switzerland Intellectual Property CGU
The Group’s Switzerland Intellectual Property CGU, acquired during the period, represents its operations, being the
exploitation of intellectual property rights. This CGU is attributed to the Company’s European operating segment.
The impairment testing performed at 31 December 2023 indicated the recoverable amount of the CGU on a relief from
royalty method to the carrying value of the associated intangibles, being brand names. The relief from royalty method
is a calculation of the amount of the hypothetical royalty that would be paid if the brands were licensed from an
independent third party. When the recoverable amount of the brand is less than the carrying amount, an impairment
loss is recognised.
This resulted in the Group recognising an impairment charge of $8,690,000 (2022: $5,891,000) against the CGU during
the period.
65 | P a g e
Notes to the Consolidated Financial Statements
NOTE 14
INTANGIBLE ASSETS (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Halucenex CGU
The Group’s Halucenex CGU, discontinued operations during the year, and was therefore fully impaired. The impairment
charge in the year was $7,157,000 (2022: $Nil).
Sierra Sage Herbs CGU
The Group’s Sierra Sage Herbs CGU, discontinued operations during the year, and was therefore fully impaired. The
impairment charge in the year was $1,852,000 (2022: $6,630,000).
Health House UK/Europe CGU
The Group’s Health House International UK/Europe CGU, acquired during the period, represents its operations which
distributes pharmaceutical products to UK, Europe and Asia. This CGU is attributed to the Company’s Europe operating
segment.
The impairment testing performed resulted in an impairment charge of $2,452,000 (2022: n/a) against the CGU.
Health House Australia CGU
The Group’s Health House International Australia CGU, acquired during the period, represents its operations which
distributes pharmaceutical products to Australia. This CGU is attributed to the Company’s Asia Pacific operating
segment.
The impairment testing performed at 31 December 2023 supported the recoverable amount of the CGU and did not
result in any impairment charge during the period (2022: $n/a).
Significant Judgements and Estimates
The following key assumptions were used in the impairment testing model for each of the CGU’s:
Forecast period and short-term revenue growth rate (a)
Terminal / long term revenue growth rate (b)
Pre-tax discount rate (c)
Mernova Health House Australia
5 years
3% terminal rate
23%
5 years
3% terminal rate
19%
Assumption
(a)
Forecast period and
short-term revenue
growth rate
Approach used to determine values
The forecast is based on a Board approved budget for FY23 and growth estimates for
four periods beyond the budget period. Specific factors considered in the forecasts used
in the impairment model:
The Mernova CGU is becoming well-established, with revenues continuously
increasing as a result of production efficiencies, improvements in quality and
yields, an expanded product range including premium products, penetration
of new provinces and increased market share through a growing customer
base. The CGU has an average forecast growth of 8% across the forecast
period. This growth trend is also supported by revenues increasing by 61% in
FY2023 (2022: 21%), highlighting the growth phase that the Company has
experienced as it moved to full production.
The Health House Australia CGU is an established business presenting
performance-enhancing opportunities under new management. Given the
changing competitive environment, particularly
in Australia, and the
business’s evolving operations, management has judged that it would be
prudent to apply a growth rate of 7% to the forecast cash flows of the CGU.
(b) Terminal / long term
growth rate
This is the weighted average growth rate used to extrapolate cash flows beyond the
forecast period. The long-term growth rate has been set at 3% to reflect the uncertainty
in the forecast future cash flows.
66 | P a g e
Notes to the Consolidated Financial Statements
NOTE 14
INTANGIBLE ASSETS (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
(c)
Pre-tax discount rate
As at December 2023, the pre-tax discount rate for Mernova is 19%, based on the
progress and de-risking of the business that has occurred in FY23. As noted above, this
is supported by the significant increase in FY23 revenue and the plans in place to
deliver continued growth. The discount rate as at 31 December 2023 still includes a
risk premium based on management’s assessment of risks specific to the CGU,
including changes in the industry environment as it matures, the still early-stage nature
of Mernova’s business and general execution risks inherent in the forecasts.
The Health House Australia CGU is an established, EBITDA-positive business presenting
performance-enhancing opportunities under new management. Given the changing
competitive environment, particularly in Australia, and the business’s evolving
operations, management has judged that it would be prudent to apply a pre-tax
discount rate of 23% to the forecast cash flows of the CGU.
For the Swiss Operations CGU, the directors and management have considered and assessed reasonably possible
changes for other key assumptions and have not identified any instances that could cause a significant impact to the
impairment model.
For the Mernova and Health House UK/Europe CGUs, any change of 5% to the key assumptions would not cause any
additional impairment.
This sensitivity assumes the specific assumption moves in isolation, whilst all other assumptions are held constant. In
reality, a change in this assumption may accompany a change in another assumption. For HHI, it would take a discount
rate of 26% to affect the carrying value of Goodwill.
NOTE 15 OTHER ASSETS
Current Assets
Loan to Health House International Limitedi
Non-current Assets
Other assets
2023
$000’s
2022
$000’s
-
2,146
274
274
286
286
I The Company entered into a facility agreement with Health House International Limited (“HHI”) during the prior period.
Under the terms of the agreement and a subsequent amendment entered into in November 2022, the key terms are:
Interest of 12% is payable in arrears on the principal outstanding;
The facility limit is $3,400,000; and
Restricts the right of HHI to dispose of its assets or allow an encumbrance over any such assets without the
authorisation of Melodiol Global Health.
After the Company acquired HHI the loan is eliminated on consolidation and therefore there is no balance at the year
end.
NOTE 16
TRADE AND OTHER PAYABLES
Trade payables
Payables to related parties (note 23)
Accrued expenses
Accrued expenses for related parties (note 23)
Income in Advance
Other payables
2023
$000’s
8,964
193
3,448
55
60
254
12,974
2022
$000’s
4,036
113
2,971
-
26
1,496
8,642
67 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 17 PROVISIONS
Employee provisions
2023
$000’s
2022
$000’s
482
375
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have completed
the required period of service and also those where employees are entitled to pro-rata payments in certain
circumstances. The entire amount is presented as current, since the Group does not have an unconditional right to defer
settlement.
NOTE 18
BORROWINGS
Secured borrowings
Deed of trust loansi
Other loansii
Total secured borrowings
Unsecured borrowings
Convertible notesiii
Related party loansiv
Other loans
Total unsecured borrowings
Total borrowings
Unused facilities
i.
Secured deed of trust loans
2023
$000’s
2022
$000’s
2,689
5,510
8,199
1
103
1,110
1,214
9,413
111
2,393
2,952
5,345
851
475
-
1,326
6,671
2,780
The company entered into a loan facility via a Loan Trust Deed between Melodiol Global Health Limited and Briant
Nominees Pty Ltd, denominated in Australian dollars. The facility operates with the following key terms:
Maximum drawdown of $5,000,000 Australian dollars;
Annualised interest rate of 30%;
Original Repayment date of 21 May 2023;
Capacity based on mutual agreement to rollover loans into convertible notes if required conditions are met by
31 January 2023, 24 March 2023, negotiations are ongoing regarding an extension of the loan or potential
conversion to convertible loan note; and
Secured by a fixed charge against Mernova Medicinal Inc’s (‘MMI’) Cannabis Cultivation Facility located in Nova
Scotia, Canada.
During the period $500,000 was drawn down against the facility and $734,792 of accumulated interest has been
recognised.
The conditions of the loans enable the loan to be rolled over by subscription into convertible notes with each note
having a face value of A$100,000. The conditions precedent for rollover of loans into convertible notes are:
the Company has made an offer to the lender, inviting them to subscribe for Convertible Notes; and
the Company has obtained shareholder approval for the issue of the Convertible Notes to lenders or their
nominees; and
the lender has subscribed for convertible notes in accordance with the conditions as set out in the loan deed.
68 | P a g e
Notes to the Consolidated Financial Statements
NOTE 18
BORROWINGS (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Attached to each Convertible Note (face value of A$100,000) are 1,000,000 options with an exercise price of $0.08 and
an expiry date 4 years from date of issue. The notes are convertible into ordinary shares of the Company at a conversion
price of $0.05 per share. In addition, on conversion, the note holder is entitled to one option for every 4 ordinary shares
acquired on conversion. The exercise price of the options is $0.08 with options being able to be exercised on or before
the elapse of four years after the first issue within the class of options.
The security charge is over MMI’s facilities which is a purpose-built facility to Health Canada GPP standard, scalable to
200,000 sq. ft. It contains 10 grow rooms with potential to produce 4,000kg annually.
ii.
Secured other loans
On 27 January 2023, the group restructured the La Plata loan and announced that it had agreed with La Plata Capital
LLC ('La Plata’ – the “Lender”), an existing lender to SSH, to repay US$717,500 under the Loan Trust Deed (“LTD”) in cash
by 31 January 2023, and swap US$1,282,500 for secured notes valued at US$1,282,500 (“the First Loan”). A cash
payment of US$250,000 (of the US$717,500) was made to La Plata on 27 February 2023.
During the year, The group issued 18,981,000 shares at AU$0.01 on 26 June 2023 and 185,675,804 shares at AU$0.00576
on 24 October 2023 to settle Jan-Sep interest payable to the Lender.
Pursuant to a Continuing Guaranty dated on or about January 11, 2023, the Guarantors (Jodi Scott and Michael Hoyt)
have guaranteed repayment to Lender of US$1,750,000 in total of the amounts due under the Restated converting Loan
Deed (“CLD”) (US$1,282,500 of the First Loan) and US$467,500 due under the LTD.
On 2 March 2023, the Group issued an additional US$500,000 (“Second Loan”) of Melodiol Convertible Notes pursuant
to the Amended and Restated CLD, in exchange for a 31.25% interest in Lender’s participation commercial loan to
Abby&Finn, LLC (“A&F”). The combination of the restructure Laplata loan of US$1,282,500 (“First loan) and US$500,000
Convertible notes (“Second loan”) have formed the restated CLD.
On 14 June 2023, the Company announced that La Plata had agreed to extend the maturity date of US$1,782,500 of its
existing secured notes to June 2024.
In consideration for the maturity date extensions, the Group agreed to purchase the Lender’s remaining 68.75%
participation interest in the commercial loan to A&F, to obtain 100% of the participation interests in the A&F loan, by
increasing the amount owed under the Restated CLD by US$900,000 (“Third loan”). At the year-end, an assessment was
made on the recoverability of the A&F loan which stood at US$2,762,000, it was concluded that the loan was likely to
be irrecoverable and therefore provided against, see note 10.
The Second and Third Loan under the Restated CLD facility operates with the following key terms:
Maximum drawdown of US$1,500,000;
Undrawn facility of US$100,000.
Annualised interest rate of 13%;
Repayment date: June 2024.
Secured by the Second Land Security Instruments and the Second Security Agreement. See note 31 for further
details of the assets pledged as security.
69 | P a g e
Notes to the Consolidated Financial Statements
NOTE 18
BORROWINGS (CONTINUED)
iii.
Unsecured convertible notes – Obsidian Global GP LLC
Melodiol Global Health Limited – Annual Report 2023
The company entered into a convertible note loan facility with Obsidian Global GP LLC (“Obsidian”) on 27 October 2022,
denominated in Unites States dollars. The maximum drawdown under the facility was $5,000,000 in three tranches as
follows:
Tranche 1 $1,750,000 5 business days after execution of the agreement;
Tranche 2 $1,750,000 5 business days after shareholder approval; and
Tranche 3 $1,500,000 on a date to be agreed between the Company and investor.
Since 31 December 2022, $500,000 was drawn in relation to Tranche 2. Tranche 2 was reduced from $1,750,000 to
$500,000 on mutual agreement between the Company and Obsidian. Tranche 3 was not utilised and no longer available
after the company entered into the convertible notes’ agreement with SBC Global Investment Fund.
As at 31 December 2023, tranche 1 and tranche 2 have been exercised and settled by shares. The fair value of the
liability components recorded was Nil (2022: $851,000).
i.
Unsecured convertible notes – SBC Global Investment Fund
The company entered into a convertible note loan facility with SBC Global Investment Fund (“SBC”) on 5 March 2023
denominated in Australian dollars. The facility includes two tranches as follows:
Funding (Purchase Price)
Number of convertible securities
Purchase date
Maturity date
Period (Months)
Face value
Total face value
Tranche 1
$1,700,000
1,700,000
15/03/2023
15/12/2023
9
$1.1111
$1,888,870
Tranche 2
$800,000
800,000
2/06/2023
2/03/2024
9
$1.1111
$888,880
As at 31 December 2023, the convertible notes comprise of:
Convertible note facilities issued in Tranche 1 of 349,987 notes at an issue price of US$0.011 per note and
Convertible note facilities issued in Tranche 2 of 169,994 notes at an issue price of US$0.009 per note.
On issue, the notes are convertible at the lower of $0.04 or 150% of the average of the 5 daily VWAPs during the 5
Actual Trading Days prior to the Purchase Date, rounded down to the nearest A$0.001. Notwithstanding the price above
notes are subject to a minimum conversion price of A$0.008 per share. Redemption is subject to certain conditions
being met. The Group notes that the maturity date of the facility has passed and is undertaking ongoing discussions
with SBC to address the situation.
Amortisation payment amount
Tranche 1: Amortisation amount is $250,000, commencing 60 days after the purchase date and continuing until
the maturity date.
Tranche 2: Amortisation amount is $125,000, commencing 60 days after the purchase date and continuing until
the maturity date.
First amortisation Payment under the First Convertible Securities Agreement was due on 12 May 2023. The
Parties also agree: (i) to accelerate two Amortisation Payments, with those payments being due and payable
no later than 24 May 2023; (ii) that the first Amortisation Payment and two accelerated Amortisation
Payments, together with interest due and payable at the time of these payments, be settled by the issue of
Amortisation Shares to the Investor at an Amortisation Price of $0.009 each, being a total of 90,000,000 Shares
which must be issued no later than 24 May 2023; The Company agrees to use reasonable endeavours to settle
the Amortisation Payment due in June 2023 by the issue of Amortisation Shares.
Amortisation price is the lower of 93% of the lowest 1-day VWAP during the 10 Actual Trading Days immediately
prior to the relevant redemption or conversion, rounded down to the nearest A$0.001, or the conversion price.
70 | P a g e
Melodiol Global Health Limited – Annual Report 2023
Notes to the Consolidated Financial Statements
NOTE 18
BORROWINGS (CONTINUED)
Committed options.
Tranche 1: As part of the convertible note facilities, a maximum of 50,000,000 of quoted options will be issued
at an exercise price of $0.08 with an expiration date of 31 January 2027, a maximum of 20,00,000 of unquoted
options will be issued at an exercise price of $0.03 with an expiry date of 31 January 2027 and a commitment
options payment of $194,580 due for payment no later than 26 May 2023.
As at 31 December 2023, no options have been issued.
The net proceeds received from the issue of the convertible notes was $1,700,000 for tranche 1 and $400,000 for
tranche 2. These proceeds have been split between a financial liability element and an equity component. The financial
liability component comprises the fair value of the convertible note together with the embedded derivative financial
liability relating to the conversion feature and the committed options given.
The equity component represents the embedded derivative relating to the committed options and has been credited
to the options reserve.
The net proceeds on issue have been classified as
follows:
Equity component – broker options
Liability component – convertible notes
Liability component – embedded derivative
Tranche 1
Tranche 2
$
$
156,854
1,196,335
346,831
61,773
336,627
1,600
Net proceeds on inception
1,700,020
400,000
Liability component – convertible notes
Transaction costs capitalised
Net borrowings recorded on inception
1,196,335
(214,906)
981,429
336,627
(56,537)
280,090
At 31 December 2023, the fair value of the liability components recorded was
Tranche 1 $388,870.
Tranche 2 $177,718.
The derivative instruments of the convertible notes have been valued using Black-Scholes model (inclusive of risk-free
rate, simulation price, and Dividend yield).
On 26 February 2024, the investor forbear from taking any enforcement actions under the Convertible Security
agreements in respect of known present default until 4 March 2024, subject to a payment of $40,000 in reduction of
the amount outstanding under the First Security Agreement no later than 29 February 2024 and $30,000 in reduction
of the amount outstanding under the First Security Agreement no later than 8 March 2024.
ii.
Unsecured related party loans
On 22 December 2022, William Lay advanced $75,000 Canadian dollars and $12,391 United States dollars to the
Company, resulting a liability of AU$100,000. On 10 January 2023, the Group settled a AU$100,000 loan owing to
William Lay through the issuance of 2,500,000 shares at AU$0.04 price. On 11 January 2023, William Lay advanced
another AU$115,390 for operating expenses, leaving a liability of AU$102,517 as at the end of December 2023, which
is reflected in note 23. The loan has free interest rate and no fixed term of repayment.
In June 2021, Sierra Sage Herbs LLC. (‘SSH’) and the controlling shareholder Jodi Scott entered into a revolving line of
credit denominated in Unites States dollars. Between 15 June 2022 and 30 September 2022, a total of $361,000 United
States dollars were drawn down against the facility. After which a total of $120,000 Unites States dollars has been
repaid in four equal instalments and the outstanding balance of US$273,481 was settled by 44,972,436 shares on 17
November 2023.
71 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 18
BORROWINGS (CONTINUED)
iii.
Unsecured other loans
Unsecured other loans comprise of
Nandil loan of $225,000 with an interest rate of 20% with the repayment date of 15 Dec 2023. On 27 Nov 2023,
the company settled a $100,000 of the loan amount by issuing of 34,435,262 shares. If the loan repayment is
not made by due date, interest will accrue at 8% per quarter until both principal and interest amounts are
repaid. In addition, the company will also pay the lender a fee of $100,000 for making the facility available to
the company, with payment of this fee to occur upon expiry of the facility.
Corporate Mining loan, amounting to $366,000 with the repayment date of 21 February 2024 and the company
will pay the Lender interest in the amount of $183,000 on the earlier of: (i) the Repayment Date; or (ii) the date
the Lender demands repayment of the Total Amount Owing.
HHI loan balance of $683,000 in relation to
o 150,00 Euro between HHP Malta and Gees Pharma Limited with an interest rate of 5%. The purpose
of the loan to provide a performance bond to the government of Malta. Repayment date is 30 June
2024.
o 73,440 GBP between HHP UK and Oakways with an interest rate of 5%. Repayment date is 30 June
2024.
o AU$50,035 between HHI Australia and AttVest with an interest rate of 5.3% and the repayment date
of 31 May 2024.
iv.
Fair value
The borrowings of the Group are of a short-term nature for which there is not a material difference between their fair
value and carrying amount.
v.
Risk
Detail of the group’s exposure to risk arising from borrowings are set out in note 21.
72 | P a g e
Notes to the Consolidated Financial Statements
Melodiol Global Health Limited – Annual Report 2023
NOTE 19
ISSUED CAPITAL
(a) Issued and fully paid
Ordinary shares
(b) Movement in issued shares – 2023
At 1 January 2023
Issuance of shares pursuant to a placement
Issue of Shares as part consideration for acquisitions
Issue of shares to employees & consultants
Exercise of options
Conversion of employee performance rights
Conversion of convertible notes
Issue of shares to settle loan
Issue of shares for services
Issue of shares to Directors
Issue of share capital for extinguish of liability
Less: Equity raising costs
At 31 December 2023
Movement in issued shares – 2022
At 1 January 2022
Issuance of shares pursuant to a Placement
Issue of Shares as consideration for acquisitions
Exercise of options
Conversion of Employee Performance Rights
Issue of shares for services
Shares issued to Directors
Issue of shares as collateral shares to Obsidian
Less: Equity raising costs
At 31 December 2022
2023
2022
No.
4,728,824,027
$000’s
150,470
No.
1,835,962,135
$000’s
128,382
Number
1,835,962,135
742,739,192
78,961,436
19,000,000
225
5,533,000
567,041,445
680,512,531
648,575,710
55,757,192
94,741,161
-
4,728,824,027
Number
1,226,370,447
199,351,467
357,614,203
405,430
5,550,000
1,670,588
-
45,000,000
-
1,835,962,135
$000’s
128,382
5,286
1,342
190
-
625
5,693
4,316
5,606
628
1,245
(2,843)
150,470
$000’s
109,951
9,942
12,874
20
-
504
120
(5,029)
128,382
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
73 | P a g e
Notes to the Consolidated Financial Statements
NOTE 20
RESERVES
Share-based payments
Foreign currency translation reserve
Movement reconciliation
Share-based payments reserve
Balance at the beginning of the year
Equity settled share-based payment transactions (Note 23)
Embedded derivative – convertible notes options
Issue of options for services
Issue of options for acquisitions
Issue of options for loan extensions
Expired options
Balance at the end of the year
Foreign currency translation reserve
Balance at the beginning of the year
Effect of translation of foreign currency operations to group presentation
Balance at the end of the year
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
11,397
3,935
15,332
17,602
884
7
2,575
136
2
(9,809)
11,397
2,908
1,027
3,935
17,602
2,908
20,510
11,248
130
49
7,182
-
-
(1,007)
17,602
1,383
1,525
2,908
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to outside parties,
and share-based remuneration provided to employees and directors. The issue of the exchangeable shares are
considered a share-based payment and are valued using the Black-Scholes model.
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
74 | P a g e
Notes to the Consolidated Financial Statements
NOTE 21
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Melodiol Global Health Limited – Annual Report 2023
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit
risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives (‘Finance’) under policies approved by the Board of
Directors (‘the Board’). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
Group’s operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity
analysis and cash flow forecasting.
The carrying amount of the Group’s foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Cash and cash equivalents
Trade and other receivables
Trade and other payables
GBP
€000’s
115
467
(712)
EUR
£000’s
57
-
-
GBP
€000’s
EUR
£000’s
-
-
-
-
-
-
2023
CHF
Fr.000’s
67
271
(178)
2022
CHF
Fr.000’s
203
154
(114)
CAD
$000’s
104
706
(2,724)
USD
$000’s
31
95
(4,106)
CAD
$000’s
79
729
(871)
USD
$000’s
238
973
(3,392)
The Group’s profit and loss has limited exposure to movements in foreign currencies as the Company and its
subsidiaries substantially operated in their respective functional currencies. The foreign exchange gain recognised in
financing costs in the profit and loss for the year ended 31 December 2023 was $36,000 (2022: loss of $15,000).
The predominant risk from fluctuations in foreign currencies is changes to net assets and other comprehensive income
resulting from translation of subsidiary operations whose functional currency is different from the functional currency
of the Company. The Group had net assets denominated in foreign currencies of $5,084,000 as at 31 December 2023
(2022: $25,247,000). Based on this exposure, had the Australian dollar weakened by 5%/strengthened by 5% (2022:
weakened by 5%/strengthened by 5%) against these foreign currencies with all other variables held constant, the
Group’s other comprehensive income for the year would have been $254,000 lower/$254,000 higher (2022:
$1,262,000 lower/$1,262,000 higher) and equity would have been $254,000 lower/$254,000 higher (2022: $1,262,000
lower/$1,262,000 higher). The percentage change is the expected overall volatility of the significant currencies, which
is based on management’s assessment of reasonable possible fluctuations taking into consideration movements over
the last 6 months each year and the spot rate at each reporting date.
Price risk
The Group is not exposed to any significant price risk.
75 | P a g e
Notes to the Consolidated Financial Statements
NOTE 21
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Interest rate risk
The Group’s main interest rate risk arises from Short-term borrowings. Borrowings obtained at fixed rates expose the
Group to fair value risk (no borrowings with a variable rate).
The group’s risk to movements in interest rates is set out in the following table:
Non-interest bearing borrowings
Fixed interest borrowings
Total borrowings
2023
$000’s
2022
$000’s
103
9,310
9,413
100
6,571
6,671
The group is not subject to interest rate risk on current borrowings. Had the group required refinancing of its
existing debt facilities, an increase in the weighted average interest rate applicable to borrowings of 1% per annum
would have resulted in an additional $94,000 financing costs during the period.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group has a strict code of credit, including obtaining agency credit information, confirming
references and setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit
risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade and other
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the Group based on recent sales experience, historical collection
rates and forward-looking information that is available.
Generally, trade receivables and other receivables are written off when there is no reasonable expectation of
recovery. Indicators of this include the failure of a debtor or partner to engage in a repayment plan, no active
enforcement activity and a failure to make contractual payments for a period greater than 1 year.
Liquidity Risk
Liquidity risk arises from the possibility that Melodiol might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group seeks to manage its liquidity risk through the following mechanisms:
Maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and
forecast cash flows
Comparing the maturity profile of financial liabilities with the realisation profile of financial assets
Matching the maturity profiles of financial assets and liabilities
Maintaining the support of lenders
Negotiating with stakeholders to defer payments and/or settle payments in equity
Maintaining a reputable credit profile
Managing credit risk related to financial assets
76 | P a g e
Notes to the Consolidated Financial Statements
NOTE 21
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Melodiol Global Health Limited – Annual Report 2023
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Weighted
average
interest rate
%
1 year or less
$000’s
Between 1 and
2 years
$000’s
Between 2 and
5 years
$000’s
Remaining
contractual
maturities
$000’s
Consolidated – 2023
Non-derivatives
Non-interest bearing
Trade and other payables
Borrowings
Interest-bearing – fixed
rate
Borrowings
Maturity Analysis
1 – 3 months
4 – 6 months
1 -2 years
Total non-derivatives
-
-
12,974
103
13,077
27.05
9,310
16,774
5,510
103
22,387
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,974
103
13,077
9,310
16,774
5,510
103
22,387
Weighted
average
interest rate
%
1 year or less
$000’s
Between 1 and
2 years
$000’s
Between 2 and
5 years
$000’s
Remaining
contractual
maturities
$000’s
Consolidated – 2022
Non-derivatives
Non-interest bearing
Trade and other payables
Borrowings
Interest-bearing – fixed
rate
Borrowings
Maturity Analysis
1 – 3 months
4 – 6 months
1 -2 years
Total non-derivatives
-
-
8,642
100
8,742
-
-
-
18.70
5,720
851
11,694
2,768
-
14,462
-
-
851
851
-
-
-
-
-
-
-
-
8,642
100
8,742
6,571
11,694
2,768
851
15,313
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
77 | P a g e
Notes to the Consolidated Financial Statements
NOTE 22
CAPITAL RISK MANAGEMENT
Melodiol Global Health Limited – Annual Report 2023
For the purpose of the Company’s capital includes issued capital and all other equity reserves attributable to the equity
holders of the parent. The primary objective of the Company’s capital management is to maximise shareholder value.
The Company’s objective when managing capital is to safeguard the ability to continue as a going concern so that it can
provide returns to shareholders and benefits to other stakeholders and to maintain an optimal capital structure.
Management effectively manages the company’s capital by regularly assessing the company’s financial risks and its
capital structure in response to changes in these risks and the market.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
NOTE 23
RELATED PARTY DISCLOSURE
(a) Key Management Personnel Compensation
Details relating to key management personnel, including remuneration paid, are below.
EverBlu Capital Pty Ltd(i) – a company of which Adam Blumenthal is the Chairman
Capital raising fees payable in cash
Capital raising fees payable in shares
Legal fees
Corporate advisory payable in shares
Monthly retainer
IRESS service fees
Out of scope fees
Balance owing to EverBlu Capital Pty Ltd at 31 December
Balance owing to Melodiol at 31 December
Everblu Capital Corporate Pty Ltd(i) – a company of which Adam Blumenthal is
the Chairman
Capital raising fees
Capital raising fees payable in shares
Monthly retainer
Debt restructuring fees
Business development and investor relations
Facilitation fees
Out of scope fees, including restructuring and corporate advice
Balance owing to EverBlu Capital Corporate Pty Ltd at 31 December
Balance owing to Melodiol at 31 December
The above fees are inclusive of GST.
2023
$
2022
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
308,996
829,258
-
70,000
495,000
3,399
1,706,653
899,258
-
149,838
3,774,815
13,095
-
-
-
-
3,937,748
3,774,815
-
(i) Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including through
companies that he controls, have not been disclosed above as they ceased being a related party.
78 | P a g e
Notes to the Consolidated Financial Statements
NOTE 23
RELATED PARTY DISCLOSURE (CONTINUED)
Suburban Holdings Pty Ltd – related partyi
Amount drawn down by Melodiol
Amount repaid
Balance owing at 31 December
International Water and Energy Savers Ltd – a company controlled by Boaz
Wachtel
Director’s Fees for Boaz Wachtel
Bonus for Boaz Wachtel payable in shares
Balance owing from Melodiol at 31 December
HBAM Holdings Inc – a company controlled by Bruce Linton
Director’s Fees for Bruce Linton
Balance owing from Melodiol at 31 December
BQ Advisory – a company controlled by Ben Quirin
Director’s Fees for Ben Quirin
Director remuneration options
Balance owing from Melodiol at 31 December
Jodi Scott
Loan repayments
Interest on loan
Lease payments
Extinguished debt
Balance owing from Melodiol at 31 December
William Lay
Consulting fee
Director remuneration
Director incentive
Loan to ME1
Loan to SSH
Loan to Mernova
Balance owing from Melodiol at 31 December
Melodiol Global Health Limited – Annual Report 2023
2023
$
2022
$
-
-
-
1,000,001
-
-
80,000
-
53,333
82,720
46,667
18,413
2,802
53,333
363,863
42,691
71,343
(453,980)
-
222,538
75,028
408,333
(102,517)
-
-
102,517
80,000
40,000
40,000
93,504
23,346
18,413
-
-
136,861
7,136
17,306
-
386,680
-
-
-
-
18,327
81,673
100,000
(i)
Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including
through companies that he controls, have not been disclosed above as they ceased being a related party.
79 | P a g e
Notes to the Consolidated Financial Statements
NOTE 23
RELATED PARTY DISCLOSURE (CONTINUED)
(b)
Transactions with related parties – non-cash
Melodiol Global Health Limited – Annual Report 2023
Other Share and Option Transactions with Related Parties
2023
2022
Shares
Options
Performance
Rights
Shares
Options
EverBlu Capital Pty Ltd(i)
Broker fees
Issue of Shares – Corporate Advisory Mandateii
Share issue cost in February-22 Placement
Subtotal
EverBlu Capital Corporate Pty Ltd (i)
Share issue cost in August-22 Placement
Subtotal
International Water and Energy Savings
Director bonus – Boaz Watchel
Subtotal
James Ellingford
Director bonus – James Ellingford(ii)
Subtotal
HBAM Holding Inc
Equity incentive to Director’s remuneration – Bruce
Lintoniii
Subtotal
Quitin Alleaume Trust
Director’s fee – Ben Quirin
Subtotal
Noble House Consulting
Director’s remuneration – Will Lay
Director incentive
Consulting fee
Subtotal
Jodi Scott
Loan and loan interest repayment
Subtotal
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,732,213
2,732,213
2,732,213
2,732,213
2,000,000
2,000,000
10,000,000
25,000,000
7,500,000
50,000,000
25,000,000 10,000,000
62,500,000
44,972,436
44,972,436
-
2,000,000
-
2,000,000
-
-
57,971,032
57,971,032
- 175,000,000
- 175,000,000
2,000,000
2,000,000
4,000,000
4,000,000
-
-
-
-
-
-
10,000,000
10,000,000
(i)
(ii)
Mr Blumenthal resigned as a director on 10 October 2022. Any transactions past this date, including
through companies that he controls, have not been disclosed above as they ceased being a related party.
Mr Ellingford resigned as a director on 30 November 2022. Any transactions past this date, including
through companies that he controls, have not been disclosed above as they ceased being a related party.
Terms and conditions
All transactions with related parties were reviewed by the Board and were made on normal commercial terms and
conditions and at market rates.
(c) Key Management Personnel Compensation
Details relating to key management personnel, including remuneration paid, are below.
Short-term benefits
Termination payments
Post-employment benefits
Share-based payments
2023
$
2022
$
1,586,628
-
34,111
906,458
2,527,197
1,380,632
144,000
50,241
136,679
1,711,553
Other than the above, there were no other transactions with KMP during the year ended 31 December 2022.
80 | P a g e
Notes to the Consolidated Financial Statements
NOTE 24
SHARE BASED PAYMENTS
Recognised share-based payment transactions
(a)
Unlisted options issued to employees and consultants
Performance rights issued to employees and consultants
Shares issued to employee and consultants
Melodiol Global Health Limited – Annual Report 2023
2023
$
2022
$
18,827
425,896
484,319
929,042
48,298
81,815
-
130,113
Share based payments are valued on the basis set out in note 1 (q).
For share-based payments issued during a financial year the parameters used in the valuations are set out in the
share-based payments note to the financial statements in that year.
(b)
Movements in unlisted options during the year
Grant Date
Issue Date
Date of
Expiry
Exercise
Price
Balance at
the start of
the year
Issued
during the
year
Exercised
during the
year
12-02-2020
12-02-2020
25-06-2020
02-06-2020
02-06-2020
02-06-2020
23-12-2020
23-12-2020
11-01-2021
11-01-2021
11-01-2021
11-01-2021
11-01-2021
14-07-2021
31-08-2021
31-08-2021
06-09-2021
06-09-2021
25-10-2021
12-12-2022
27-01-2023
10-06-2023
16-05-2023
16-05-2023
16-05-2023
16-05-2023
16-05-2023
30-06-2023
07-07-2023
30-06-2023
16-05-2023
10-11-2023
16-11-2023
12-02-2020
12-02-2020
25-06-2020
02-06-2020
02-06-2020
02-06-2020
23-12-2020
23-12-2020
11-01-2021
11-01-2021
11-01-2021
11-01-2021
11-01-2021
14-07-2021
31-08-2021
31-08-2021
06-09-2021
06-09-2021
25-10-2021
12-12-2022
27-01-2023
10-06-2023
16-05-2023
16-05-2023
16-05-2023
16-05-2023
16-05-2023
30-06-2023
07-07-2023
30-06-2023
16-05-2023
10-11-2023
16-11-2023
12-02-2023
12-02-2023
25-06-2023
02-06-2023
02-06-2023
02-06-2023
23-12-2023
23-12-2025
11-01-2023
11-01-2023
11-01-2023
11-01-2023
11-01-2023
14-07-2024
01-08-2024
01-08-2024
06-09-2024
06-09-2024
25-10-2024
12-06-2024
17-01-2024
17-01-2024
08-06-2024
10-06-2024
10-06-2024
10-06-2024
10-06-2024
24-08-2024
24-08-2024
10-10-2024
28-06-2025
30-11-2024
16-11-2027
$0.35
$0.40
$0.1389
$0.17
$0.25
$0.20
$0.20
$0.039
$0.24
$0.27
$0.30
$0.40
$0.40
$0.38
$0.15
$0.18
$0.18
$0.25
$0.1375
$0.14
$0.09
$0.02
$0.38
$0.4
$1.34
$2.00
$2.65
$0.03
$0.03
$0.04
$0.02
$0.04
$0.02
2,128,387
6,847,725
5,752,688
27,764,706
4,000,000
8,000,000
833,333
30,000,000
8,000,000
8,000,000
8,000,000
2,500,000
300,000
12,000,000
12,000,000
12,000,000
10,000,000
10,000,000
1,000,000
53,358,712
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
62,583,352
10,000,000
10,000,000
27,999,934
626,250
626,250
626,250
626,250
132,859,360
126,219,254
2,000,000
1,648,263
3,000,000
10,654,042
222,485,551 389,469,205
Weighted average exercise price
$0.18
$0.08
Expired/
Cancelled
during the
year
(2,128,387)
(6,847,725)
(5,752,688)
(27,764,706)
(4,000,000)
(8,000,000)
-
-
(8,000,000)
(8,000,000)
(8,000,000)
(2,500,000)
(300,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(81,293,506)
Balance at
the end of
the year
-
-
-
-
-
-
833,333
30,000,000
-
-
-
-
-
12,000,000
12,000,000
12,000,000
10,000,000
10,000,000
1,000,000
115,942,064
10,000,000
10,000,000
27,999,934
626,250
626,250
626,250
626,250
132,859,360
126,219,254
2,000,000
1,648,263
3,000,000
10,654,042
530,661,250
$0.236
$0.103
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
81 | P a g e
Notes to the Consolidated Financial Statements
(d) Movements of listed options during the year
Melodiol Global Health Limited – Annual Report 2023
Options
Issue Date
Date of
Expiry
Issue
Price
Exercise
Price
Balance at
start of the
year
Issued during
the year
Exercised
during the
year
ME10
ME10A
ME10D
ME10E
02-11-2021
02-11-2024
$0.00
$0.25
422,941,788
356,890,378
22-01-2021
22-01-2023
$0.00
$0.05
63,954,018
2023
31-01-2027
$0.00
$0.08
13-11-2023
13-11-2028
$0.00
$0.01
-
-
1,330,481,743
184,867,992
486,895,806
1,872,240,113
-
-
-
-
-
Expired/
Cancelled
during the
year
Balance at
end of the
year
(225)
779,831,941
(63,954,081)
-
-
-
1,330,481,743
184,867,992
(63,954,243)
2,295,181,676
(e)
Summary of performance rights granted and vested during the year
Balance at the start of the
year
Granted during the year
Vested during the year
Cancelled/Lapsed during
the year
Balance at the end of the
year
10,549,000
106,500,000
(5,533,000)
(5,016,000)
106,500,000
NOTE 25
COMMITMENTS AND CONTINGENCIES
There are no contractual commitments or contingent liabilities at 31 December 2023 (2022: Nil).
82 | P a g e
Notes to the Consolidated Financial Statements
NOTE 26
AUDITOR’S REMUNERATION
Melodiol Global Health Limited – Annual Report 2023
During the financial year the following fees were paid or payable for services provided by Crowe Audit Australia and
BDO Audit Pty Ltd, the auditor of the company and unrelated firms:
Auditors of the Group – Crowe
Audit Services
Audit of the Group and controlled entities
Total services provided by Crowe
Auditors of the Group – BDO
Audit Services
Audit and review of annual and half-year of the Group and controlled entities
Other services
– Independent Expert Report
– Income tax return and GST audit
Total services provided by BDO
Other firms
Audit and reviews of the financial statements – MNP
Audit and reviews of the financial statements – PwC
Other services
– Independent Expert Report
– Income tax return and GST audit
Total services provided by other firms
2023
$
2022
$
340,000
340,000
-
-
182,970
520,220
249,992
22,967
-
-
455,929
520,220
65,603
34,138
118,500
102,770
66,349
80,043
517,700
40,459
246,133
779,429
1,042,062
1,299,649
83 | P a g e
Notes to the Consolidated Financial Statements
NOTE 27
INVESTMENT IN CONTROLLED ENTITIES
Company Name
Principal Activities
Melodiol Global Health Limited – Annual Report 2023
Country of
Incorporation
Ownership interest
2023
2022
Creso Pharma Switzerland
GmbH
Creso Canada Limited
Creso Canada Corporate
Limited
Mernova Medicinal Inc.
3321739 Nova Scotia
Limited
Kunna Canada Limited
Kunna S.A.S
Halucenex Life Sciences
Inc.
Creso Impactive Limited
Sierra Sage Herb LLC
Creso Pharma US Inc.
4340965 Nova Scotia
Limited
Health House
International Limited
Development of nutraceutical products
Switzerland
Corporate entity
Corporate entity
Cultivation of cannabis plants and sale of
cannabis products
Corporate Entity
Corporate entity
Holder of cannabis licenses in Colombia
Clinical stage psychedelic drug development
company
CBD based life sciences company
Manufacture and sale of packaged consumer
products
Corporate entity
Corporate entity
Distributor of medicinal cannabis and other
controlled drugs
Canada
Canada
Canada
Canada
Canada
Colombia
Canada
Canada
United States
of America
United States
of America
Canada
Australia
%
100
100
100
100
100
100
100
100
100
100
100
100
100
%
100
100
100
100
100
100
100
100
100
100
100
100
-
84 | P a g e
Notes to the Consolidated Financial Statements
NOTE 28
BUSINESS COMBINATIONS
Melodiol Global Health Limited – Annual Report 2023
On 16 May 2023 the Group acquired 100% of the voting equity instruments of Health House International Limited, a
company whose principal activity is the distribution of medicinal cannabis and other controlled drugs.
Details of the provisional fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill
are as follows:
Cash and cash equivalents
Inventories
Receivables
Property, plant and equipment
Borrowings
Payables
Lease liabilities
Total net liabilities
Fair value of consideration paid
Issue of ordinary shares
Issue of options
Pre-acquisition loan
Total consideration
Provisionally determined value of intangibles (including goodwill)
Fair value
provisionally
determined
$'000
621
282
2,185
415
(825)
(3,608)
(349)
(1,279)
1,343
136
3,156
4,635
5,914
Acquisition costs of $212,000 were incurred as a result of the transaction and have been expensed in the Statement of
Profit or Loss and Other Comprehensive Income.
As at 31 December 2023, the Group has recorded a provisionally determined value of intangibles (including goodwill)
or $5,914,000 in respect of the acquisition of Health House International Limited. Subsequent to the acquisition, the
Group conducted impairment testing on the goodwill acquired. As a result, an impairment charge against goodwill of
$2,452,000 (2022: $Nil) was recognised during the period, leaving a balance of $3,462,000 at the year end (2022: N/A)
The goodwill recognised will not be deductible for tax purposes.
85 | P a g e
Notes to the Consolidated Financial Statements
NOTE 29
DISCONTINUED OPERATIONS
Melodiol Global Health Limited – Annual Report 2023
During the year the Group discontinued the following operations, at the year-end these operations were in
abandonment:
Halucenex Life Sciences Inc. and
4340965 Nova Scotia Limited
Creso Impactive Limited
Sierra Sage Herb LLC and
Creso Pharma US Inc.
The results of the discontinued operations are presented below:
Statement of Profit and Loss from Discontinued Operations
Revenue from discontinued operations
Revenue
Other income
Expenses
Raw materials and consumables used
Loss on fair value adjustments
Administrative expenses
Depreciation and amortisation expenses
Employee benefit expenses
Impairment of intangibles (note 14)
Other expenses
Loss on disposal of assets
Finance costs
(Loss) from discontinued operations before income
tax
Income tax expense
(Loss) from discontinued operations
2023
$000’s
2022
$000’s
2,643
2,453
139
34
(2,878)
-
(2,562)
(844)
(3,638)
(9,233)
(388)
-
(138)
(16,899)
(27)
(16,926)
(1,537)
-
(1,823)
(544)
(2,093)
(6,630)
(513)
-
(266)
(10,919)
-
(10,919)
86 | P a g e
Notes to the Consolidated Financial Statements
NOTE 29
DISCONTINUED OPERATIONS (CONTINUED)
Statement of Cash Flows from Discontinued Operations
Cash flows from discontinued operating activities
Receipts from customers
Payments to suppliers and employees
Payments for research
Interest received
Interest paid
Net cash used in discontinued operating activities
Cash flows from discontinued investing activities
Payments for plant and equipment
Cash acquired on acquisition of Sierra Sage Herbs LLC
Net cash from in discontinued investing activities
Cash flows from discontinued financing activities
Proceeds from borrowings from the Parent entity
Net cash from discontinued financing activities
Net cash (outflow)/inflow from discontinued
activities
Melodiol Global Health Limited – Annual Report 2023
2023
$000’s
2022
$000’s
4,559
(9,377)
(124)
35
(57)
(4,964)
-
-
-
2,367
(5,166)
(339)
-
(103)
(3,241)
(86)
165
79
4,636
4,636
3,398
3,398
(327)
236
87 | P a g e
Notes to the Consolidated Financial Statements
NOTE 30
PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income
Melodiol Global Health Limited – Annual Report 2023
Total current assets
Loans receivable and investments in controlled entities
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
2023
$000’s
2022
$000’s
6,043
2,478
8,521
12,579
12,579
3,113
25,248
28,361
6,066
6,066
150,470
11,397
(165,925)
(4,058)
128,382
17,602
(123,690)
22,294
Total comprehensive profit/(loss)
(42,235)
(31,257)
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2023 and 31 December 2022.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2023 and 31
December 2022.
Material accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except
for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its
receipt may be an indicator of an impairment of the investment.
88 | P a g e
Notes to the Consolidated Financial Statements
NOTE 31
ASSETS PLEDGED AS SECURITY
The carrying amount of assets pledged as security for borrowings are:
Melodiol Global Health Limited – Annual Report 2023
Current
Floating charge
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets pledged as security
Non-current assets
First mortgage
Land and buildings
Floating charge
Plant and equipment
Intangible assets
Total non-current assets pledged as security
Total assets pledged as security
2023
$000’s
2022
$000’s
31
95
5
131
8,070
-
-
-
8,070
8,201
352
1,436
2,548
4,336
8,288
16
2,353
2,369
10,657
14,993
The Group has loans which are subject to security pledges. The pledged assets include a fixed charge over the production
facility owned by Mernova Medicinal Inc. and a floating charge over the assets of Sierra Sage Herbs LLC. Further
information regarding the borrowings is presented at note 18.
89 | P a g e
Notes to the Consolidated Financial Statements
NOTE 32
EVENTS AFTER THE REPORTING DATE
Melodiol Global Health Limited – Annual Report 2023
On 16 January 2024, the Company issued 167,315,175 shares at an issue price of $0.00128 per share for gross proceeds
of $214,163.
On 2 February 2024, the Company announced that the consolidation of the issued capital on the basis of 1 security for
every 20 securities held had been completed.
On 27 February 2024, the Company issued 91,126,313 shares at an issue price of $0.01019 per share for gross proceeds
of $928,577.
Other than the above, there has been no other matter or circumstance that has arisen since the end of the financial
year that has significantly affected, or may significantly affect, the operations of the Group, the results of those
operations, or the state of affairs of the Group.
90 | P a g e
Directors’ Declaration
In the directors' opinion:
Melodiol Global Health Limited – Annual Report 2023
the financial statements and notes set out on pages 37 to 90 are in accordance with the Corporations Act
2001, including:
-
-
-
complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
complying with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 to the financial statements; and
giving a true and fair view of the Group's financial position as at 31 December 2023 and of its
performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Mr Wiliam Lay
CEO and Managing Director
28 March 2024
91 | P a g e
Crowe Audit Australia
ABN 13 969 921 386
Level 24, 1 O’Connell Street
Sydney NSW 2000
Main +61 (02) 9262 2155
Fax +61 (02) 9262 2190
www.crowe.com.au
Independent Auditor’s Report to the Members of
Melodiol Global Health Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Melodiol Global Health Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31
December 2023, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including material accounting policy information
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its
financial performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer applies
to them. If you have any questions about the applicability of Professional Standards Legislation Crowe’s personnel involved in preparing this
document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an equity
interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership is
external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by Findex
Group Limited are conducted by a privately owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a separate
and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe Global or any
other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or partnership interest in
Findex (Aust) Pty Ltd. Services are provided by Crowe Audit Australia, an affiliate of Findex (Aust) Pty Ltd.
© 2024 Findex (Aust) Pty Ltd
92
Independent Auditor’s Report Melodiol Global Health Limited
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report under the heading ‘Going Concern’ which outlines
the directors’ assessment in relation to the appropriateness of the going concern basis for the
preparation of the financial statements. The matters as set out in Note 1 indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern, and whether it will realise the assets and extinguish its liabilities in the normal course of
business, at the amounts stated in the financial report. Our opinion is not modified in respect of this
matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material Uncertainty
Related to Going Concern section, we have determined the matters described below to be the key
audit matters to be communicated in our report.
Key Audit Matter
Acquisition of HHI Group
As disclosed in Note 28 of the financial report,
on 16 May 2023 the Group acquired 100% of
the voting equity instruments of Health House
International Limited.
Accounting for business combinations can be
complex, requiring the Group to exercise
judgement in how the structure and substance
of the transaction is treated in accordance with
AASB 3 Business Combinations, including the
requirement to identify and determine the fair
value of the assets and liabilities acquired.
Due to the magnitude of the transaction and the
significant judgement and complexity involved in
accounting for the transaction, this acquisition is
considered to be a key audit matter.
How We Addressed the Key Audit Matter
Our audit procedures included:
• Reviewing the business sale agreement to
understand the terms and conditions of the
acquisition and evaluating management’s
accounting thereof and application of the
relevant accounting standards;
• Comparing the assets and liabilities
recognised on acquisition against the
executed agreements and the historical
financial information of the acquired entity;
• Evaluating and challenging the
assumptions made and methodology used
in management’s determination of the fair
value of assets and liabilities acquired,
including goodwill, and the consideration
paid; and
• Considering the adequacy of the business
combination disclosures and accounting
policy in light of the requirements of the
Australian Accounting Standards.
Impairment of Intangibles
At 31 December 2023, the carrying value of
intangible assets was $3,595,000 as disclosed
in Note 14.
Under AASB 136 Impairment of Assets,
indefinite life assets and assets with indicators
of impairment, must be assessed for impairment
on an annual basis. Impairment testing requires
management to make significant judgements
and estimates as part of the assumptions used.
Our audit procedures included:
• Obtaining management’s assessment of
impairment indicators under AASB 136 for
each cash generating unit and reviewing
the resulting conclusion;
• Assessing whether the impairment testing
methodology used by the Group meets the
requirements of the Australian Accounting
Standards;
© 2024 Findex (Aust) Pty Ltd
www.crowe.com.au
93
Independent Auditor’s Report Melodiol Global Health Limited
Key Audit Matter
How We Addressed the Key Audit Matter
Detailed disclosures are contained in Note 14 to
the financial report, which includes the related
accounting policies and the critical accounting
judgements and estimates used to determine
whether the carrying value of assets are
recoverable.
During the year, the Group has impaired a
significant portion of intangibles across the
Group, which given the significance of the
intangible assets, the material amount of the
impairment charge recorded and the estimates
and judgements exercised when assessing
impairment, gives rise to being treated as a key
audit matter.
Convertible Notes
As disclosed in note 18 of the financial report,
the Group has issued convertible notes during
the year.
The accounting for convertible notes was
considered a key audit matter due to the
complexity involved in assessing whether to
account for the notes as equity, liability or a
combination of both, as well as the subsequent
measurement of the individual components,
based on the terms and conditions of the
agreements.
Assessment of whether convertible notes are to
be accounted for as equity, liabilities or a
combination of both involves significant
judgement and a high degree of estimation in
determining the fair values of the respective
components.
• Assessing whether the cash generating
units identified by management are
appropriate and consistent with our
understanding of the Group’s internal
reporting and operations;
• Evaluating the estimates and judgements,
including but not limited to, cash flow
forecasts, growth rates and discount rates,
used in the Group’s valuation models by
our internal valuation experts;
• Checking the mathematical accuracy of
the Group’s valuation models; and
• Evaluating the adequacy of the impairment
disclosures in the financial report,
particularly those relating to intangible
assets and to judgements and estimates.
Our audit procedures included:
• Obtaining an understanding of the terms
and conditions of the convertible note
agreements and assessing management’s
accounting for the convertible note
balances;
• Agreeing balances to supporting
documentation and obtaining confirmations
from lenders, as appropriate;
• Assessing the classification of each
component as debt or equity under AASB
132 Financial Instruments: Presentation;
• Considering the appropriateness of the
valuation methodology used by
management against the requirements of
the relevant Australian Accounting
Standards;
• Assessing the reasonableness of the
inputs to the valuation with assistance from
our internal valuation experts;
• Assessing the accounting and
measurement of convertible notes
subsequent to initial recognition; and
• Reviewing the disclosures made within the
financial report to ensure they are in
accordance with the requirements of AASB
7 Financial Instruments – Disclosures.
© 2024 Findex (Aust) Pty Ltd
www.crowe.com.au
94
Independent Auditor’s Report Melodiol Global Health Limited
Key Audit Matter
How We Addressed the Key Audit Matter
Related Party Transactions
The Group has disclosed related party
transactions as required by AASB 124 Related
Party Transactions in Note 23 of the financial
report.
The Group has transactions with related parties
during the year which includes the issue of
shares and options to related parties.
There is a risk that these transactions may not
have been entered into on an arm’s length basis
and that the completeness of related party
transactions has not been adequately captured
and disclosed in the financial statements and
has therefore been considered a key audit
matter.
Other Information
Our audit procedures included, amongst
others:
• Reviewing the documentation supporting
related party transactions to gain an
understanding of the transactions and
assess whether they are at arm’s length,
are recorded correctly and appropriately
disclosed; and
• Obtaining the confirmations of related
party transactions from all key
management personnel and review in line
with disclosures to ensure completeness.
The directors are responsible for the other information. The other information comprises the
information included in the Group’s Annual Report for the year ended 31 December 2023 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Other Matter
The financial report of the Group for the year ended 31 December 2022 was audited by another
auditor who expressed an unmodified opinion on that financial report on 31 March 2023.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
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Independent Auditor’s Report Melodiol Global Health Limited
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the group as a basis for forming an
opinion on the group financial report. We are responsible for the direction, supervision and review
of the audit work performed for the purposes of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
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Independent Auditor’s Report Melodiol Global Health Limited
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in pages 22 to 35 of the directors’ report of the
directors’ report for the year ended 31 December 2023.
In our opinion, the remuneration report of Melodiol Global Health Limited, for the year ended 31
December 2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
Crowe Audit Australia
John Haydon
Senior Partner
28 March 2024
Sydney
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97
Shareholder Information
The shareholder information set out below was applicable as at 1 March 2024.
1. QUOTATION
Melodiol Global Health Limited – Annual Report 2023
Listed securities in Melodiol Global Health Limited are quoted on the Australian Securities Exchange under ASX codes
ME1 (Fully Paid Ordinary Shares), ME1O (Listed Options), ME1OD (Listed Options) and ME1OE (Listed Options).
2. VOTING RIGHTS
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
(a)
(b)
at a meeting of members or classes of members each member entitled to vote may vote in person or by
proxy or by attorney; and
on a show of hands every person present who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options, Performance Rights, Performance Shares or Convertible Notes on
issue.
3. ON MARKET BUY-BACK
There is no on-market buy back in place.
4. RESTRICTED SECURITIES
There are no restricted securities listed on the Company’s register as at 1 March 2024:
5. DISTRIBUTION OF SECURITY HOLDERS
5.1 Fully Paid Ordinary Shares
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
17,624
5,354
1,096
1,899
458
26,431
Units
5,389,677
13,053,493
8,189,554
65,787,248
300,576,111
392,996,083
%
1.37%
3.32%
2.08%
16.74%
76.48%
100.00%
On 1 March 2024, there were 25,460 holders of unmarketable parcels of less than 50,000 ordinary shares (based on the
closing share price of $0.01).
5.2 Listed ME1O Options exercisable at $5.00 on or before 2 November 2024
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
21,829
1,828
200
223
54
24,134
Units
4,005,596
3,904,519
1,448,166
6,439,863
23,183,313
38,981,457
%
10.28%
10.02%
3.72%
16.52%
59.47%
100.00%
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Shareholder Information
Melodiol Global Health Limited – Annual Report 2023
5.3 Listed ME1OD Options exercisable at $1.60 on or before 31 January 2027
Shares Range
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1,370
105
26
140
58
1,699
Units
148,419
235,089
202,369
5,996,441
59,941,134
66,523,452
5.4 Listed ME1OE Options exercisable at $0.12 on or before 13 November 2028
Shares Range
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1,370
105
26
140
58
1,699
Units
148,419
235,089
202,369
5,996,441
59,941,134
66,523,452
%
0.22%
0.35%
0.30%
9.01%
90.11%
100.00%
%
0.22%
0.35%
0.30%
9.01%
90.11%
100.00%
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Shareholder Information
5.5
Unlisted Options
Class
ME1OPT33 Options
($0.78, 23/12/2025)
ME1OPT38 Options
($7.60, 14/07/2024)
ME1OPT39 Options
($3.00, 01/08/2024)
Quantity on
Issue
1,500,000
600,000
6,000,000
ME1OPT40 Options
($3.60, 01/08/2024)
600,000
ME1OPT41 Options
($3.60, 06/09/2024)
ME1OPT42 Options
($5.00, 06/09/2024)
ME1OPT43 Options
($2.75, 25/10/2024)
500,000
500,000
50,000
ME1OPT45 Options
($2.80, 12/06/2024)
5,797,079
Melodiol Global Health Limited – Annual Report 2023
Distribution of Holders
All the securities in this class are held by:
-
Bruce Linton
All the securities in this class are held by:
-
Atlantic Capital Holdings Pty Ltd
There are 2 security holders holding between 10,001 and
100,000 securities in this class and 1 security holder holding
more than 100,001 of securities in this class.
The following holder holds more than 20% of securities in
this class:
- Mr Edward Sugar holds 450,000 securities (75%)
There are 2 security holders holding between 10,001 and
100,000 securities in this class and 1 security holder holding
more than 100,001 of securities in this class.
The following holder holds more than 20% of securities in
this class:
- Mr Edward Sugar holds 450,000 securities (75%)
All the securities in this class are held by:
- Noble House Consulting Ltd
All the securities in this class are held by:
- Noble House Consulting Ltd
There are 2 security holders, each holding between 10,001
and 100,000 securities in this class.
The following holders hold more than 20% of securities in
this class:
- Mr Kevin Tansey holds 25,000 securities (50%)
- Mr Brett Ayers holds 25,000 securities (50%)
There are 33 security holders holding between 1,001 and
5,000 securities in this class, there are 3 security holders
holding between 5,001 and 10,000 securities in this class,
there are 22 security holders holding between 10,001 and
100,000 securities in this class and there are 10 security
holders holding more than 100,001 of securities in this class.
The following holder holds more than 20% of securities in
this class:
-
Everblu Capital Corporate P/L (46.02%)
ME1OPT48 Options
($8.00, 28/06/2024)
ME1OPT49 Options
($26.80, 28/06/2024)
ME1OPT50 Options
($40.00, 28/06/2024)
ME1OPT51 Options
($53.00, 28/06/2024)
31,312
31,312
31,312
31,312
All the securities in this class are held by:
- Mr Antony Samios
All the securities in this class are held by:
- Mr Antony Samios
All the securities in this class are held by:
- Mr Antony Samios
All the securities in this class are held by:
- Mr Antony Samios
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Shareholder Information
ME1OPT52 Options
($0.40, 28/06/2025)
ME1OPT53 Options
($7.60, 08/06/2024)
82,413
1,399,916
ME1OPT54 Options
($0.60, 24/08/2024)
12,953,911
ME1OPT55 Options
($0.80, 10/10/2024)
ME1OPT57 Options
($0.44, 16/11/2027)
100,000
532,700
Melodiol Global Health Limited – Annual Report 2023
All the securities in this class are held by:
-
Zelira Therapeutics Limited
There are 62 security holders holding between 0 and 1,000
securities in this class, there are 95 security holders holding
between 1,001 and 5,000 securities in this class, there are 19
security holders holding between 5,001 and 10,000
securities in this class, there are 22 security holders holding
between 10,001 and 100,000 securities in this class and
there are 3 security holders holding more than 100,001 of
securities in this class.
No holder holds more than 20% of securities in this class.
There are 17 security holders holding between 10,001 and
100,000 securities in this class and there are 19 security
holders holding more than 100,001 of securities in this class.
The following holder holds more than 20% of securities in
this class:
-
Everblu Capital Corporate P/L (51.28%)
All the securities in this class are held by:
-
BKAH Pty Ltd < Quirin Alleaume A/C>
There is 1 security holder holding between 5,001 and 10,000
securities in this class, there are 3 security holders holding
between 10,001 and 100,000 securities in this class and
there are 2 security holders holding more than 100,001 of
securities in this class.
The following holders hold more than 20% of securities in
this class:
-
Pathways Corp Investments Pty Ltd holds 163,888 securities (30.77%)
T Slate Nominees Pty Ltd holds
137,953 securities (25.90%)
-
ME1OPT58 Options
($0.80, 30/11/2024)
150,000
All the securities in this class are held by:
- Mr Peter Ernest Hatfull
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Shareholder Information
5.6
Performance Rights
Class
ME1PERR45
Performance Rights
ME1PERR46
Performance Rights
ME1PERR47
Performance Rights
ME1PERR48
Performance Rights
ME1PERR49
Performance Rights
ME1PERR50
Performance Rights
ME1PERR52
Performance Rights
ME1PERR54
Performance Rights
Quantity on
Issue
25,000
25,000
50,000
25,000
25,000
50,000
2,500,000
1,500,000
5.7
Performance Shares
Class
ME1PERS2
Performance Shares
Quantity on
Issue
150,000
ME1PERS3 Performance
Shares
150,000
Melodiol Global Health Limited – Annual Report 2023
Distribution of Holders
All the securities in this class are held by:
-
Kolby Wayne Tullier & Tracy Theriot Tullier
Kolby Wayne Tullier & Tracy Theriot Tullier
Kolby Wayne Tullier & Tracy Theriot Tullier
Troy Van Biezen
All the securities in this class are held by:
-
All the securities in this class are held by:
-
All the securities in this class are held by:
-
All the securities in this class are held by:
-
All the securities in this class are held by:
-
All the securities in this class are held by:
- Noble House Consulting Ltd
All the securities in this class are held by:
- Chincherinchee Nominees Pty Ltd
Troy Van Biezen
Troy Van Biezen
Distribution of Holders
There are 2 security holders, each holding between 10,001
and 100,000 securities in this class.
The following holders hold more than 20% of securities in
this class:
- Mr Kevin Tansey holds 75,000 securities (50%)
- Mr Brett Ayers holds 75,000 securities (50%)
There are 2 security holders, each holding between 10,001
and 100,000 securities in this class.
The following holders hold more than 20% of securities in
this class:
- Mr Kevin Tansey holds 75,000 securities (50%)
- Mr Brett Ayers holds 75,000 securities (50%)
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Shareholder Information
Melodiol Global Health Limited – Annual Report 2023
5.8
Convertible Notes
Class
ME1CON7
Convertible Notes
ME1CON8
Convertible Notes
Quantity on
Issue
17,499
Distribution of Holders
All the securities in this class are held by:
-
SBC Global Investment Fund
8,499
All the securities in this class are held by:
-
SBC Global Investment Fund
6.
TWENTY LARGEST SHAREHOLDERS AS AT 25 MARCH 2024
The following shareholders have provided substantial shareholder notices to the Company as at 1 March 2024:
Name: Jodi Scott
Holder of: 267,393,981 fully paid ordinary shares, representing 5.80% as at 21 November 2023
Notice Received: 21 November 2023
7. TWENTY LARGEST SHAREHOLDERS AS AT 1 MARCH 2024
LTD
7
8
9
NOMINEES
1
2
3
4
5
6
Name
10 BAY STREET PTY LIMITED
SABA NOMINEES PTY LTD
MR SAMER HILAL & MRS NIDAA HILAL
JODI SCOTT
MR MAN CHUN KUNG
GREGORY DENISE PTY LTD
BEIRNE TRADING PTY LTD
ROTHERWOOD ENTERPRISES PTY LTD
STATE
PTY
ONE
10 MR PEPPI SCHIANO DICOLA
11
12
7 SCOOPS PTY LTD
JAMBER INVESTMENTS PTY LTD
HASNIE4 PTY LTD
HADDED CONSULTING GROUP PTY LTD
HADDED
SUPERANNUATION
SRGG PTY LTD
EUTHENIA TYCHE PTY LTD
BNP PARIBAS NOMS PTY LTD
15
16
17
18 MR POH SENG TAN
19
STRUCTURE INVESTMENTS PTY LTD
13
14
14
LTD
PTY
20 MORSEC NOMINEES PTY LTD
Totals
Shares Held
26,857,703
14,186,900
14,000,000
13,287,121
6,979,242
5,652,391
4,869,792
4,464,087
4,000,000
3,400,000
3,273,594
3,076,213
3,048,298
3,000,000
3,000,000
2,804,160
2,700,000
2,693,348
2,600,000
2,453,385
2,431,211
%
6.83%
3.61%
3.56%
3.38%
1.78%
1.44%
1.24%
1.14%
1.02%
0.87%
0.83%
0.78%
0.78%
0.76%
0.76%
0.71%
0.69%
0.69%
0.66%
0.62%
0.62%
128,777,445
32.77%
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Shareholder Information
Melodiol Global Health Limited – Annual Report 2023
8. TWENTY LARGEST LISTED ME1O OPTION HOLDERS AS AT 1 March 2024
1
2
3
4
5
6
7
7
7
8
9
10
11
12
13
14
15
16
17
18
19
20
LTD
PARTY NOMINEES
Name
NANDIL PTY LTD
MR LEON SPENCER WILLIAM HUNTER
THIRD
PTY
MR PERNA PERERA
JAMBER INVESTMENTS PTY LTD
R AND K JONES SUPERANNUATION PTY LTD
ABN AMRO CLEARING SYDNEY NOMINEES
PTY LTD
SIX DEGREES GROUP HOLDINGS PTY LTD
HIRSCH FINANCIAL PTY LTD
CASCADE COMPANY PTY LTD
HSBC CUSTODY NOMINEES
LIMITED-GSCO ECA
MR PRADEEP SURANGA BOGAHAWALAGE
MR YASHPAL THAKUR
MRS VICKI PATRICIA ANN BRIXEY
MR GEORGE NITSOS
MASTER BLAYNE LAIDLAW
MR STACEY HUBERT CARTER
BNP PARIBAS NOMS PTY LTD
MR ASHRAF ADIEB ABADER GHOBRIAL
MR BRANDON MARK LEE
SUBURBAN HOLDINGS PTY LTD
MR BILL FLEMING
Totals
(AUSTRALIA)
Shares Held
4,567,600
1,522,819
1,230,000
1,000,000
839,867
656,433
609,013
609,013
609,013
583,470
545,741
524,371
511,397
504,450
500,066
500,050
500,000
486,792
462,090
400,000
345,720
318,419
%
11.72%
3.91%
3.16%
2.57%
2.15%
1.68%
1.56%
1.56%
1.56%
1.50%
1.40%
1.35%
1.31%
1.29%
1.28%
1.28%
1.28%
1.25%
1.19%
1.03%
0.89%
0.82%
17,826,324
45.73%
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Shareholder Information
9. TWENTY LARGEST LISTED ME1OD OPTION HOLDERS AS AT 1 March 2024
Melodiol Global Health Limited – Annual Report 2023
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
18
18
19
20
Name
EVERBLU CAPITAL CORPORATE P/L
ATLANTIC CAPITAL HOLDINGS PTY LTD
EVERBLU CAPITAL PTY LTD
CPS CAPITAL GROUP PTY LTD
MR LUCAS GUY HALL
MR PAUL DUREY
RIMOYNE PTY LTD
MR PERNA PERERA
ORCA CAPITAL GMBH
PHEAKES PTY LTD
MRS KRISHNA SMIT NAYAK
ACHIEVEMENT NOMINEES PTY LTD
CELTIC CAPITAL PTY LTD
MR SMIT DIPAKKUMAR NAYAK
MR MARC LOUIS GILCHRIST
MR SUSHIL KUMAR MAINALI
JAMBER INVESTMENTS PTY LTD
CHIFLEY PORTFOLIOS PTY LTD
CHINCHERINCHEE NOMINEES PTY LTD
DRH SUPERANNUATION PTY LTD
HSBC CUSTODY NOMINEES
LIMITED-GSCO ECA
MR JOHN WALTERS & MS BERNADETTE
PARKER
Totals
(AUSTRALIA)
Shares Held
25,472,242
5,500,955
4,807,831
3,327,868
1,524,000
1,338,492
1,024,590
1,000,000
983,606
950,000
836,070
676,229
617,922
550,211
544,886
526,000
500,000
498,007
498,007
498,007
440,179
374,400
%
38.29%
8.27%
7.23%
5.00%
2.29%
2.01%
1.54%
1.50%
1.48%
1.43%
1.26%
1.02%
0.93%
0.83%
0.82%
0.79%
0.75%
0.75%
0.75%
0.75%
0.66%
0.56%
52,489,502
78.90%
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Shareholder Information
10. TWENTY LARGEST LISTED ME1OE OPTION HOLDERS AS AT 1 March 2024
Melodiol Global Health Limited – Annual Report 2023
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
JODI SCOTT
HASNIE4 PTY LTD
JAMBER INVESTMENTS PTY LTD
ROBERT LEE-STEERE AUSTRALIA PTY LTD
MR HIMANSHU GUPTA & MRS NIDHI GUPTA
SBC GLOBAL INVESTMENT FUND
MR GARY BENJAMIN MUNN
SOIRHU PTY LTD
MR RICHARD GUY DARLING
NOBLE HOUSE CONSULTING LTD
ALM EQUITY'S PTY LTD
BNP PARIBAS NOMS PTY LTD
MR POH SENG TAN
MR PEPPI SCHIANO DICOLA
CITICORP NOMINEES PTY LIMITED
JENNIFER SCOTT
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
KATHY SCOTT
ATLANTIC CAPITAL HOLDINGS PTY LTD
MR CRAIG JOSEPH CRIDDLE
Totals
Shares Held
551,924
222,414
153,810
140,335
132,518
124,391
107,550
107,500
105,000
100,000
98,853
92,783
82,500
80,000
79,039
72,579
69,718
67,792
57,299
%
5.98%
2.41%
1.67%
1.52%
1.44%
1.35%
1.16%
1.16%
1.14%
1.08%
1.07%
1.00%
0.89%
0.87%
0.86%
0.79%
0.75%
0.73%
0.62%
54,665
2,500,670
0.59%
27.08%
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