Medinex Limited to Issue 2,666,667 Shares to Seller Following Profitable Acquisition of Carlin Management Services

Key Developments:

• Medinex Limited has announced the issuance and allotment of 2,666,667 new ordinary shares to Ms. Lee Lay Lian, the seller of Carlin Management Services Pte. Ltd.
• This move is part of the completion terms of the acquisition of Carlin Management Services, after the acquired entity met its guaranteed profit target over a three-year period.
• The new shares are being issued at S\$0.225 per share, amounting to a total deferred consideration of S\$600,000.
• Medinex has received the Listing and Quotation Notice (LQN) from the Singapore Exchange Securities Trading Limited (SGX-ST) for the listing and quotation of 1,852,667 of these shares on the Catalist board.
• The remaining balance of the consideration (814,000 shares) will be satisfied through the transfer of treasury shares to the seller.

Details and Shareholder Implications:

• The acquisition was completed on 1 April 2022. The seller has now fulfilled the requirement of a cumulative net profit after tax of at least S\$1,800,000 over the three-year period ending 1 April 2025.
• As a result, the company is fulfilling its contractual obligation by issuing the agreed consideration shares.
• Shareholders should note that the SGX-ST’s LQN is not an endorsement of the merits of the acquisition, the shares, or the company.
• There is a regulatory caveat: If Medinex acquires additional assets or businesses from the seller or their related parties in the future, the SGX-ST may aggregate these transactions, potentially classifying them as a very substantial acquisition or even a reverse takeover under Catalist Rule 1015. This could have significant implications for the company’s listing status and regulatory requirements.
• The company will make further announcements about the actual allotment and issuance of consideration shares in due course.

Potential Share Price Impact:

• The successful achievement of the profit guarantee by the acquired entity is a positive signal for investors, indicating that the acquisition has yielded the expected financial returns.
• The share issuance, while potentially dilutive, was anticipated and is directly tied to the company’s growth through acquisition strategy.
• The regulatory warning from SGX-ST regarding future asset injections is noteworthy. Any further related party acquisitions could trigger a reclassification of the company’s transactions, which may affect investor perception and share price volatility.

Other Noteworthy Points:

• The announcement has been reviewed by the company’s sponsor, Novus Corporate Finance Pte. Ltd., but has not been examined or approved by SGX-ST, which assumes no responsibility for its contents.

Conclusion:

This announcement is significant for shareholders as it marks the successful completion of the profit guarantee associated with a major acquisition and signals further integration of Carlin Management Services into Medinex’s operations. Investors should monitor future disclosures, especially regarding any additional acquisitions from related parties, as these may have regulatory and share price implications.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The Singapore Exchange Securities Trading Limited assumes no responsibility for the contents of this announcement.

View Medinex Historical chart here