Microba Launches $2M Raise and Targets 30% Cost Cuts Ahead of Merger

Microba launches $2.025 million placement to fund cost reduction

Microba Life Sciences (ASX: MAP) has received firm commitments to raise $2.025 million (before costs) through a two-tranche placement of 50,625,000 new fully paid ordinary shares at $0.04 per share. The Microba placement is supported by substantial shareholder Sonic Healthcare, together with Perennial Partners, Thorney and Microba directors.

Proceeds will fund one-off restructuring costs associated with the cost reduction programme, working capital and the costs of the placement. The funding is intended to strengthen Microba’s position as it progresses the proposed merger with Genetic Signatures Limited (ASX: GSS), announced on 22 September 2026.

The Genetic Signatures merger discussions first surfaced in August 2026 as preliminary talks, with the strategic case built on pairing rapid PCR infectious disease panels with clinical-grade gut microbiome testing and Microba’s Sonic and SYNLAB distribution links.

Sonic, Perennial Partners and Thorney have each committed to participate in both tranches, while directors will participate in the second tranche only. The announcement also updates investors on the cost programme, Board renewal, a proposed sale process for Invivo Supplements and a summary of Q1 FY27 trading.

Placement terms and what they mean for shareholders

The placement is split into two tranches with different conditions. Tranche 1 uses existing placement capacity, while Tranche 2 depends on approvals tied to the proposed merger.

Pricing and share count

• The $0.04 offer price is a 9.1% discount to the last closing price of $0.044 on 19 October 2026.
• It is also a 13.0% discount to the 10-day volume weighted average price (VWAP) of $0.046 per share, up to and including 19 October 2026.
• New shares will rank equally with existing fully paid ordinary shares from the date of issue, and 767,742,274 shares will be on issue following both tranches.

Directors Pasquale Rombola, Stephane Chatonsky and Jacqueline Fernley have committed to subscribe for a total of $75,000 of new shares (1,875,000 shares) under Tranche 2, subject to shareholder approval at the General Meeting.

Sonic Healthcare voting power

On completion of Tranche 1, Sonic’s voting power will increase from approximately 22.6% to approximately 24.5%. Following Tranche 2, Sonic is anticipated to increase its voting power to approximately 26.0%, subject to shareholder approval under item 7 of section 611 of the Corporations Act 2001 (Cth) at the General Meeting.

How a two-tranche placement works

A placement is a capital raising where a company issues shares directly to selected investors rather than to all shareholders. A two-tranche structure splits the raise into two parts, so the first can proceed quickly under existing capacity while the second waits for conditions to be met.

Here, Tranche 2 is conditional on shareholder approval and on Genetic Signatures obtaining the approvals needed for the Proposed Merger. The announcement does not set out further reasoning for linking the two.

Cost reduction programme lifts savings beyond 30%

Since June 2026, Microba has reduced its annualised cash operating costs by approximately $5 million, or over 20%, compared with FY26. Q1 FY27 was the first quarter to reflect these reductions.

Following slower-than-expected revenue growth in the United Kingdom, Microba plans further annualised reductions of approximately $3 million. These would take the total reduction to more than 30% of the FY26 cost base. The planned reductions focus on:

1. Property consolidation
2. A simpler leadership and organisational structure, including a smaller Board
3. Not backfilling vacant roles
4. Lower contractor, marketing, software and overhead costs

Q1 FY27 included approximately $0.45 million of one-off restructuring payments. The full benefit is not yet reflected, as some employment notice periods ran through the quarter.

Cash operating costs exclude cost of goods sold, restructuring and annual payments. The annualised figure is September 2026 payments multiplied by 12, compared with FY26 on the same basis, and these are unaudited, non-IFRS measures and are not a forecast.

Q1 FY27 trading update: record core testing revenue

Microba delivered record core testing revenue of $2.57 million in Q1 FY27, up 31% versus the prior corresponding period (PCP) and the 13th consecutive quarter of core testing growth.

Core testing and own-brand Invivo revenue grew 25% versus PCP. Further points from the quarter include:

• UK tests: 725 Microbiome Explorer tests were sold, down 7%, and lifting UK sales is an immediate priority.
• Revenue timing: A late-September laboratory delay moved $0.21 million of revenue into October.
• Operating cash: Net cash used in operating activities was $3.80 million, including approximately $0.45 million of one-off restructuring payments and $0.34 million of annual payments.
• Cash position: Cash and equivalents were $3.87 million at 30 September 2026, before receipt of placement proceeds.

GI Navigator launched in Australia and the United Kingdom on 7 October 2026. More than 150 tests were ordered through the early access programme ahead of launch, and Microba will report GI Navigator sales from the December 2026 quarter.

The GI Navigator launch drew a waitlist of more than 400 practitioners, over 150 of whom had never ordered a Microba test, with introductory pricing of $549 in Australia and £399 in the UK.

Financial figures are preliminary and unaudited. Further detail is in the Q1 FY27 Quarterly Activities Report and Appendix 4C released the same day.

Board renewal and Invivo Supplements sale process

Genetic Signatures and Microba have agreed that, if the Proposed Merger proceeds, the Combined Group board will comprise six directors, three nominated by each company. Microba’s nominees are Pasquale Rombola, Jacqueline Fernley and Stephane Chatonsky.

Consistent with this and with Microba’s move to a smaller Board, Professor Ian Frazer AC and Professor Gene Tyson have agreed to step down, effective Wednesday 21 October 2026. Both served over the past nine years, through the Company’s formation, its ASX listing and the establishment of its clinical diagnostics business and therapeutic programmes.

The Board thanks them both and wishes them every success.

Geoff Cockerill was appointed Interim Chief Executive Officer, as announced on 25 September 2026.

Proposed sale of Invivo Supplements

Following expressions of interest, Microba plans to commence an advisory process for a potential sale of its UK-based Invivo Supplements business. The business has a clinically formulated range of 26 products targeting gut, vaginal and oral microbiome health, and own-brand supplement revenue was $0.70 million in Q1 FY27, up 6% versus PCP.

Any sale would be subject to receipt of any necessary regulatory approvals, including any approvals required by ASX. There is no certainty that the process will result in a transaction.

Key dates

• 26 October 2026: Tranche 1 settlement expected
• December 2026: General Meeting expected
• December 2026 quarter: GI Navigator sales to be reported

Get Healthcare News Before the Market Moves

Join 20,000+ investors receiving FREE breaking ASX healthcare and biotech news within minutes of release, with in-depth analysis already done. Click the “Free Alerts” button at Big News Blast and stay ahead of the market the moment news breaks.