Promisia calls Shareholder Meeting for December

Please find enclosed notice of the Promisia Integrative Limited (PIL or Company) special meeting of shareholders which will be held on 4 December 2018 at Level 4, 22 Panama Street, Wellington, starting at 10am. Shareholder registration opens at 9.30am As foreshadowed in announcements to NZX on 5 October and 6 November 2018 the directors have been considering possible courses of action to recapitalise the Company. This action has been necessary due to the adverse impact on sales caused by the Alert issued by Medsafe, a division of the New Zealand Ministry of Health, on 15 February 2018. The Company has had to eliminate almost all advertising and promotional expenditure to conserve cash. The lack of advertising, which had worked so well for the Company in the past, has limited the recovery of sales and thus cash flow from operations has been well down on levels of 2017. The financial position of the Company became precarious and it has only been through the financial support of interests associated with director Tom Brankin, being Thomas David Brankin and Michael John Kirwan Lay as trustees of the Brankin Family Interest Trust (Brankin Trust) that the Company has survived. The directors are proposing the recapitalisation of the Company by way of a three for one rights issue at $0.001 per share to raise up to approximately $1.67 million to open immediately following the meeting (Rights Issue). The Rights Issue has the support of Brankin Trust in the form of an underwriting agreement entered with the Company (Underwriting Agreement) which ensures that the Company raises at least $1,050,000. The Underwriting Agreement is conditional on the resolutions in this notice of meeting being passed. The key resolutions being put forward at the meeting are intended to approve transactions whereby: - Brankin Trust may subscribe for up to $1,300,000 of new capital through the Underwriting Agreement and a potential acquisition of up to 39,027,368 shares in the Company under a put option deed entered by Tom Brankin with Garrick Robert Wells and Wells Investments Limited (Put Option) and described in this notice of meeting. This approval is required under the Takeovers Code as the shareholding of Brankin Trust may move above the 20% level prescribed by the Takeovers Code to a maximum possible 72.92%. - The Company can perform the Underwriting Agreement with Brankin Trust to underwrite the Rights Issue to the extent of $1,050,000. The Underwriting Agreement also allows Brankin Trust to subscribe for a further $250,000 of shares at its discretion but subject to the availability of shortfall shares from the Rights Issue. Approval of the Underwriting Agreement is required as a related party transaction under the NZX Listing Rules. The Rights Issue will only proceed if both Resolutions are passed. If the Rights Issue proceeds and shareholders do not participate in the Rights Issue, their shareholdings will be diluted by 65-75%. The Board estimates that approximately $500,000 of working capital will be raised through the Rights Issue and Underwriting Agreement. The funds received will stabilise the Company and allow the Company to release new product lines. The Company had two new products ready to release to market prior to the Medsafe alert being issued and with these proceeds intends to now release those products to help grow sales. The sufficiency of working capital that is raised will depend on the level of shareholder support for the Rights Issue and the success of growing sales. Brankin Trust has been granted a general security over the assets of the Company to secure amounts owed to Brankin Trust. At the date of the meeting the Company is expected to owe Brankin Trust approximately $1.6 million (in aggregate). This debt will be reduced by approximately $800,000 by being offset against the Underwriting Agreement obligation (or repaid if the underwriting is not called on to a sufficient extent). The general security secures the residual amount owing to Brankin Trust. All surplus amounts raised through the Rights Issue will provide the Company with much needed working capital and the Underwriting Agreement ensures that at least $250,000 in new working capital will be raised. If not approved, the Company will not be in a position to settle its outstanding debts. The Company will continue to have liabilities exceeding assets and negative equity, and will not have sufficient working capital to meet its day to day operational costs. The Company will need to look urgently for other sources of new capital or debt to continue to trade and a failure to secure new capital may result in an insolvency event for the Company. The non-interested directors intend to vote in favour of these resolutions and recommend that shareholders also vote in favour of the resolutions. An independent report from Armillary Limited accompanies this notice of meeting and should be considered by shareholders to support their voting decision on the resolutions Shareholders may submit specific questions to the Board at any time in advance of the meeting by emailing Mr Rene de Wit, the company's Chief Executive at rene@promisia.com The enclosed shareholder voting form has detailed instructions on how shareholders may lodge their vote or appoint a proxy to vote on their behalf if they are unable to attend. I look forward to seeing you at the meeting. End CA:00326992 For:PIL Type:MEETING Time:2018-11-16 17:30:19