AHI Raises USD$4M Convertible Note, Eyes AUD$10M Total Funding for MENA Growth

Strategic Funding Boost from UAE Investor

Advanced Health Intelligence Ltd (ASX: AHI) has secured a significant USD$4 million (~AUD$6.45 million) convertible note facility from UAE-based KOR Investments LLC, marking a pivotal step in the company’s capital raising efforts. This initial tranche forms part of a broader AUD$10 million funding target intended to accelerate AHI’s expansion across the Middle East and North Africa (MENA) region while addressing existing debt obligations.

The convertible note facility replaces earlier convertible note arrangements disclosed in April 2024, which did not proceed and incurred no costs or drawdowns. The fresh facility underscores renewed investor confidence, particularly from KOR, a visionary investment firm led by Mohamed Al Marar, known for its commitment to social entrepreneurship and innovation in the UAE.

Terms and Conversion Mechanics

The facility is structured with a 24-month maturity and a 10% per annum simple interest rate. Drawdowns are scheduled in three tranches: USD$200,000 by end of January 2025, USD$1.3 million by February, and USD$2.5 million by March. Conversion of the loan into equity shares is subject to shareholder approval and can occur between six months and the maturity date, with a conversion price set at a 50% discount to the 10-day volume weighted average price prior to conversion notice.

This discount mechanism, while attractive to KOR, implies potential dilution for existing shareholders, estimated between approximately 26% and 52% depending on the conversion price. The company has transparently provided illustrative dilution scenarios to inform investors of the possible equity impact.

Supporting Growth and Debt Reduction

Proceeds from the facility will not only fund AHI’s strategic growth initiatives in the MENA region but also facilitate repayment of a bridging loan from Quarters Academy Sdn Bhd due in March 2025. The bridging loan’s second tranche and accrued interest may also convert into shares, subject to shareholder approval, or be repaid in cash.

AHI’s Founder and Head of Strategy, Vlado Bosanac, highlighted the significance of the partnership with KOR, emphasizing the alignment of both parties’ visions to tackle chronic health challenges in the UAE through innovative digital health technologies. This collaboration is positioned to enhance AHI’s footprint in a region with pressing public health needs.

Innovative Health Technology at the Forefront

AHI’s technology leverages smartphone-based health risk identification tools, enabling individuals to conduct comprehensive health assessments non-invasively. Their solutions span anthropometric analysis, predictive biomarker modelling, cardiovascular risk stratification, dermatological imaging, and atrial fibrillation detection. This suite of digital biomarker-driven tools offers scalable, cost-effective health risk triage, aligning well with healthcare priorities in emerging markets.

The company’s ongoing R&D efforts, supported by an anticipated AUD$1.5 million reimbursement, further underpin its commitment to innovation and scientific validation. The convertible note facility thus provides crucial capital to sustain these initiatives while expanding commercial reach.

Governance and Shareholder Considerations

Shareholder approval remains a critical milestone for the conversion of notes into equity and the issuance of shares to the facility’s advisor, SP Global, which will receive an 8% cash fee and 10 million shares subject to approval. The company has engaged legal counsel to ensure the facility’s terms are market-standard and compliant with ASX regulations.

Investors should monitor upcoming shareholder meetings closely, as approvals will determine the final capital structure and dilution outcomes. The transparent disclosure of terms and potential impacts reflects AHI’s commitment to maintaining investor trust amid its growth trajectory.