Scalare Partners Holdings Ltd Gets $5M Note Commitment With Path to $25M

Scalare Partners (ASX: SCP) has received a binding commitment for a $5,000,000 (before costs) Convertible Note Facility from The Blackstone Mercantile Group Ltd. SAC, with provision to scale to up to $25 million subject to conditions and approvals.

The Company advises that proceeds will fund new investments, market communications and general working capital. Both the note issue and a proposed 60:1 share consolidation remain subject to shareholder approval.

Scalare intends to hold a shareholder meeting to approve the facility and all connected aspects of the Transaction.

At a glance:

• Binding commitment: $5,000,000 before costs

• Facility ceiling: up to $25 million (subject to conditions/approvals)

• First tranche: immediate $500,000 loan

• Second tranche: $4,500,000 on shareholder approval

• Investor ownership cap: 19.99% of issued capital

How the facility is structured

The tranches

The facility follows a staged structure. Upon dispatch of the Notice of Meeting, the Investor pays the Company an immediate $500,000 loan. On receipt of shareholder approval, this loan automatically converts into 500,000 $1.00 Convertible Notes (Tranche 1), and the Investor subscribes for a further $4,500,000 of $1.00 Convertible Notes (Tranche 2).

Beyond the initial $5,000,000, any further tranches are subject to Investor request and Company consent, and are not promised. These provide for up to a further 10,000,000 $1.00 Convertible Notes, followed by up to 5,000,000 $2.00 Convertible Notes. If all notes are converted, the Company will have received $25,000,000.

The notes attract interest at 10% per annum, calculated daily and capitalised monthly until conversion. Each note converts into one fully paid ordinary share.

A defining feature is the fixed conversion price of $1.00 (and $2.00 for the later notes). Unlike floating-price facilities, where the conversion price moves with the market, a fixed price provides certainty on the number of shares issued on conversion, a point the Board considers favourable for existing shareholders.

The Fairfax service fee

The Company must use $1,500,000 of the first $5,000,000 to pay the fees of an independent marketing group, Fairfax, with whom the Company has entered into an agreement to provide marketing services (the Service Fee).

CEO Commentary

“This facility provides the company with flexible access to capital to support the Company’s near-term objectives. When compared to other funding options, including traditional placements, we are of the view that the other options available were not on the same commercial terms and were therefore not in the best interests of the Company or our existing shareholders. We welcome The Blackstone Mercantile Group Ltd. SAC as an institutional funding partner and believe the structure is appropriate for the Company at this stage,” said Carolyn Breeze, Chief Executive Officer of Scalare Partners.

The 60:1 consolidation and shareholder protections

A requirement of the facility is that the Company undertakes a 60:1 share consolidation, subject to shareholder approval. The Directors recommend that all shareholders vote in favour of this resolution.

If shareholder approval is not received, the $500,000 loan is repayable immediately in shares in the Company at $0.167 per share.

Bonus issue to offset dilution

As recognition of the support shown by current shareholders and as agreed with the Investor, the Company intends to make a non-renounceable bonus option issue following completion of the consolidation. The terms are 8.7 New Options for every 10 shares held (fractions rounded up), exercisable at $0.01 each (post-consolidation) between 5 February 2027 and 31 March 2027, for shareholders holding shares as at the record date of 21 August 2026.

Each New Option, upon exercise, results in one Share and one additional Piggy Back Option, exercisable at $0.02 each at any time to 31 March 2028. Both the New Options and Piggy Back Options are unlisted and non-transferable.

The bonus issue is designed to reduce the dilution impact of the consolidation and any share issue on conversion. For an existing shareholder who does not dispose of any shares, exercising both the New Options and Piggy Back Options would see the dilutionary impact of converting 5 million Convertible Notes reduced from 67.2% to 42.8%, assuming no further securities are issued.

The Company states these options are designed primarily to protect shareholder value over time, and it will undertake measures to remind shareholders to exercise them.

What convertible notes and a consolidation mean for investors

Why does a fixed conversion price matter? With a floating price, notes can convert at progressively lower share prices, which deepens dilution as the price falls. A fixed price locks in the conversion rate, which is generally more favourable to existing holders.

Applied to this update, the structure gives Scalare funding certainty of at least $5,000,000 while the bonus options act as the mechanism intended to soften dilution.

Dilution scenarios investors should understand

The transaction carries a material dilution impact, which varies by the number of notes converted and whether shareholders exercise their options. Representative scenarios drawn from the announcement are set out below.

A full comparison, including a floating-price placement scenario, appears in Annexure E of the announcement. The figures underscore the significance of the bonus options: exercising them is the primary mechanism intended to protect shareholder value against dilution.

Why Scalare chose this facility

The Board has set out its rationale for pursuing the facility over alternatives. The Company notes it has very limited daily share trading volumes, has seen a reduction in share price and market capitalisation, and faces current global economic uncertainty. Together, these factors mean a traditional placement or rights issue would only be possible at a significant discount to the current share price, typically with an attaching option and greater long-term dilution.

An alternative floating-price convertible facility was also considered. Such facilities can convert future funding at lower share prices, resulting in a greater dilutionary impact on shareholders.

By contrast, the Board considers this facility offers a better financial outcome through its fixed conversion price, along with certainty that at least $5,000,000 will be raised (before costs) and the potential for further capital that alternatives did not allow.

The Board is candid that the discount to the post-consolidation market price and the Service Fee reflect the Company’s constrained bargaining position, but considers the terms superior to other opportunities considered. The notes were negotiated at arm’s length with a sophisticated, professional and independent third-party investor. The Company confirms it obtained legal advice that the terms are market standard for an investment of this nature and do not contain any unacceptable features described in section 5.9 of ASX Guidance Note 21.

Key dates ahead

The following indicative timetable is conditional on the resolutions passing.

• Dispatch of the Notice of Meeting: 2 July 2026

• The Company announces the consolidation: 2 July 2026

• General Meeting to approve the Consolidation: 4 August 2026

• The Company notifies that shareholders have approved the Consolidation: 4 August 2026

• Effective date of consolidation: 4 August 2026

• Last day for pre-consolidation trading: 5 August 2026

• Post Consolidation trading commences on a deferred settlement basis: 6 August 2026

• Record Date for Consolidation (Last day for the Company to register transfers on pre-Consolidation basis): 7 August 2026

• First Day for the Company to register securities on a post Consolidation basis, and the first day for sending of Holding Statements: 10 August 2026

• Last day for securities to be entered into holders’ security holdings: 14 August 2026

• Last Day for the company to send notice for each holder of the change in their details of holdings and notify ASX this has occurred: 14 August 2026

• Commencement of normal settlement trading of securities on a consolidated basis: 17 August 2026

• Company formally announces Bonus Issue, Lodges Appendix 3B and Prospectus: 17 August 2026

• Ex Date for Bonus Issues: 20 August 2026

• Bonus Issue record date: 21 August 2026

• First Day for Conversion of Convertible Notes: 24 August 2026

• Last Day for Company to Issue New Options under Bonus Issue: 28 August 2026

• First Day to Exercise New Options issued under Bonus Issue: 5 February 2027

• Last Day to Exercise New Options issued under Bonus Issue: 31 March 2027

• Last Day to Exercise Piggy Back Options: 31 March 2027

What it means for Scalare’s growth plans

Scalare provides advice and services to early-stage technology companies and invests directly in them. The Company’s intention had been to invest in up to eight technology companies per annum, a target its financial position had previously constrained.

The funding is positioned to restore capacity to pursue that investment pipeline. The Company supports early-stage technology founders across Australia, the USA, New Zealand, Singapore, the UK and Europe, with initiatives including Tech Ready Women and the Australian Technologies Competition.

The Fishburners acquisition, completed in June 2026, expanded Scalare’s startup ecosystem to over 40,000 founders and added alumni with a collective $5.4 billion funding track record, reinforcing the pipeline the new capital facility is intended to serve.

The facility offers Scalare funding certainty alongside a shareholder-protection mechanism, both dependent on the outcome of the August shareholder vote. Forward-looking statements in the announcement remain subject to risks, uncertainties and assumptions, and actual outcomes may differ.

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