Gratifii Limited Completes Issuance of 72 Million Unquoted Options at $0.10 Exercise Price Post Shareholder Approval

Completion of Gratifii's Capital Raise Tranche 2

Gratifii Limited has advanced its capital raising efforts by issuing the second tranche of options as part of a previously announced placement strategy. The company distributed 72,062,500 two-year options with a $0.10 exercise price on a 1-for-2 basis to eligible participants. This structured placement approach aims to raise capital while providing investors with conversion opportunities over a two-year period. The capital raise was initially disclosed to the ASX on 15 May 2026, with this tranche representing a significant step towards full execution.

The issuance followed formal shareholder approval granted on 13 July 2026, ensuring compliance with corporate governance and ASX listing rules. The 1-for-2 allocation reflects a balanced capital management approach, addressing equity funding needs while managing shareholder dilution. Post-issuance, Gratifii confirmed no further securities issuance is required to complete the transaction outlined in the May 2026 Appendix 3B.

Option Terms and Exercise Details

The issued options carry a fixed exercise price of $0.10 per share, granting holders the right to convert options into ordinary fully paid shares. This exercise price is a critical factor for capital inflow, as options will likely be exercised only if the share price exceeds this level plus transaction costs. The options mature on 20 July 2028, providing a two-year window for conversion. Gratifii has not disclosed the valuation methodology used to set the exercise price relative to the share price at issuance.

Upon exercise, each of the 72,062,500 options converts into one ordinary GTI share, the company’s quoted security class. The terms comply with ASX Listing Rule 6.1, confirming fairness and appropriateness. All options are equal in rank from the issue date of 20 July 2026, denominated in Australian dollars, and remain unquoted on the ASX, meaning they are not traded on the exchange but can be exercised or transferred under specified terms.

Shareholder Approval and Governance Compliance

The issuance was preceded by shareholder approval on 13 July 2026, a key governance milestone ensuring transparency and endorsement of the capital raise. This approval aligns with standard requirements for material capital raises and unquoted securities issuance, reinforcing adherence to regulatory timelines and orderly capital management. The 1-for-2 allocation was explicitly approved, reflecting shareholder consent to the terms and scope of the options.

No further securities issuance is necessary to finalize the transaction, indicating the capital raise has been executed as initially planned in May 2026. This process underscores Gratifii’s commitment to governance standards consistent with ASX listing and corporate law obligations.

Effect on Gratifii’s Capital Structure

Following this issuance, Gratifii’s capital structure includes 540,381,609 ordinary fully paid shares quoted on the ASX and an expanded portfolio of unquoted securities. The newly issued 72,062,500 options represent the largest unquoted security tranche by number, significantly increasing the company’s potential dilution exposure.

Prior to this tranche, the company held various unquoted options and performance rights with exercise prices ranging from $0.10 to $0.60 and expiry dates spanning multiple years. The new options add a substantial layer to the capital structure, heightening potential dilution if exercised. The unquoted portfolio now includes options expiring on 1 January 2029 (8,700,000 options at $0.10), 1 June 2028 (3,000,000 options at $0.17), and other smaller tranches, alongside 4,717,742 outstanding performance rights.

Unquoted Securities and Trading Limitations

The 72,062,500 options are unquoted securities not intended for ASX listing, meaning they do not trade on the exchange and lack continuous price discovery. This status affords Gratifii flexibility in option terms while maintaining compliance with ASX Listing Rule 6.1, which ensures fairness despite the unquoted nature.

Optionholders must exercise or transfer options through direct arrangements rather than ASX trading. Material terms are publicly disclosed via ASX filings, ensuring transparency. While these options do not impact the ASX-quoted share price immediately, future exercises may increase the ordinary share count and influence market dynamics.

Sector Context and Capital Management Approach

Issuing options is a common capital management tool among Australian listed companies, enabling capital raising with limited immediate dilution and offering investors conversion optionality. Gratifii’s $0.10 exercise price indicates anticipation of share price appreciation that would incentivize option exercise, while the two-year term provides a reasonable timeframe for value creation.

The staged capital raise and 1-for-2 allocation demonstrate disciplined capital management, balancing dilution concerns with funding needs. Shareholder approval prior to issuance reflects strong governance, and the use of unquoted options alongside other securities shows flexibility in capital raising instruments.

Option Expiry Timeline and Future Considerations

The options issued on 20 July 2026 expire on 20 July 2028, offering holders approximately two years to decide on exercising their rights. This period allows assessment of company performance and market conditions. Unexercised options will lapse at expiry, prompting Gratifii to evaluate implications for capital structure and market sentiment.

Gratifii’s portfolio includes options with varying expiry dates, such as 2,110,135 options expiring 31 December 2026 at $0.30 and 60,000 options expiring 1 September 2026 at $0.60, indicating upcoming capital management decisions. Monitoring exercise patterns will be critical for future dilution and planning.

Investor Implications and Dilution Risks

Investors should consider potential dilution from the 72,062,500 new options alongside existing unquoted securities. Full exercise of all unquoted instruments would materially increase the ordinary shares beyond the current 540,381,609 quoted shares. Dilution depends on share price performance, market conditions, and optionholder strategies.

The $0.10 exercise price serves as a benchmark for evaluating the likelihood of option exercise, with a relatively low price potentially enhancing conversion appeal if share prices rise. Investors should assess how the staged option issuance aligns with their views on capital management and shareholder value creation.

ASX Compliance and Security Fairness

Gratifii received formal ASX confirmation that the option terms comply with Listing Rule 6.1, affirming the fairness and appropriateness of the security structure. This regulatory endorsement provides investors with confidence in the capital raise process.

The company’s adherence to ASX requirements, including shareholder approval and ASX confirmation, demonstrates governance discipline and commitment to transparency. These measures offer baseline protections and ensure the capital raise aligns with market standards and investor interests.