340.7 million GSS shares proposed under Microba merger

Shareholder approval becomes a condition of the Microba merger

Genetic Signatures Limited (ASX:GSS) has inserted a potentially decisive fourth resolution into its annual meeting: shareholders must approve the issue of securities that would underpin the proposed acquisition of Microba Life Sciences Limited (ASX:MAP). Without that approval, GSS says the merger cannot proceed in its current form.

The addendum seeks authority to issue up to 340,708,242 new GSS shares and 129,745,003 GSS options to Microba securityholders. The issue would exceed GSS’s 15% placement capacity under ASX Listing Rule 7.1, making a shareholder vote necessary. The securities would be issued as consideration for Microba shares and options rather than for cash.

Revised ownership split leaves Microba shareholders with 60%

The proposal now gives Microba shareholders 60% of the enlarged GSS, while existing GSS shareholders would retain 40%. That is a material change from the original structure, under which Microba holders were expected to own about 67%; the parties’ revised Microba merger split was previously described as improving the position of existing GSS shareholders.

Based on the Microba share count used in the addendum, the revised scheme formula equates to approximately 0.475 new GSS shares for every Microba share and up to 340.7 million consideration shares. The formula is designed to preserve the 60%-40% ownership outcome, meaning further Microba shares issued before the scheme record date would reduce the per-share exchange ratio rather than dilute GSS holders.

Microba placement changes option calculations

Microba’s recently announced $2.025 million placement is expected to increase its shares on issue from 717.1 million to 767.7 million, assuming both tranches complete and no other shares are issued. The indicative exchange ratio would consequently fall to about 0.444 GSS shares per Microba share, while the maximum number of consideration and additional options would fall from 129.7 million to approximately 121.2 million.

The share consideration remains capped at 340.7 million under the figures disclosed. The option count is more fluid because it depends on the Microba securities outstanding at the scheme record date, as well as the treatment of various option classes, including options that can generate further attaching options.

Proposed merger still lacks binding documentation

GSS and Microba have not yet signed the scheme implementation deed. The companies say they have substantially progressed negotiations and intend to execute the deed after GSS shareholder approval and completion of customary due diligence. The proposed transaction would then require Microba shareholder and optionholder approval, court approval, an independent expert’s report and other customary conditions.

The addendum describes the combination as a reverse takeover because the securities issued to Microba holders would exceed 100% of GSS’s current issued share capital. The proposed merged board would contain three existing GSS directors and three Microba nominees. GSS’s illustrative figures show combined FY2026 revenue of approximately $29.6 million, but also a pro forma EBITDA loss of $26.7 million and a loss before tax of $35.0 million. Those figures are unaudited, historical and do not include the proposed $2.5 million to $3.0 million of annual gross cost synergies.

AGM vote is the immediate transaction test

GSS’s board unanimously recommends that shareholders vote in favour of Resolution 4 at the AGM on 16 November 2026. The company says proxy votes must be lodged by 9:00am Sydney time on 14 November, and shareholders who have already submitted the original proxy form will need the replacement form if they want to vote on the new resolution or change earlier votes.

The vote would clear one important hurdle, not complete the merger. The next sequence includes execution of binding documentation, ASIC and court processes, an independent expert’s assessment, and a separate Microba scheme meeting expected in February 2027. Until those steps are completed, the headline ownership split and final securities issued remain proposed rather than settled.