Memphasys (ASX:MEM) has received A$3.5mn from major Shareholder Peters Investments under a proposed convertible note arrangement. The company plans to use the funding to expand commercial support, Manufacturing capacity and inventory for its Felix sperm-selection system while progressing international market opportunities.

What did Memphasys announce?

According to the company's ASX announcement, as published on its investor website, Peters Investments Pty Ltd has advanced A$3.5 million under a convertible note subscription agreement. Until the notes are issued, the money is treated as an interest-bearing Loan at 12.5% per annum, compounded monthly and capitalised.

The proposed notes are 3,500,000 unsecured, unquoted notes with a Face Value of A$1 each. Key terms include:

  • Conversion price: A$0.004 per share, or 80% of the lowest price in any later Equity raising completed below A$0.004.
  • Maturity: two years from the advance date, extendable by agreement.
  • Approvals: shareholder approval under item 7 of section 611 of the Corporations Act and ASX confirmation are needed before the notes can be issued. If approval is not obtained, the loan is repayable within 20 Business days after the shareholder meeting.

The company says funds will be used to expand its European commercial team and clinic support, increase manufacturing capacity and build cartridge and console inventory, and progress European and Asian opportunities, including a ringfenced FDA regulatory assessment for the US.

Executive Chairman David Tasker said: "We have reached the point where partners and clinics are placing repeat orders for Felix." Melissa Peters, Managing Director of Peters Investments, has been appointed a Non-Executive Director.

Why could this announcement matter?

Felix is an automated sperm-selection system used in assisted reproduction. The company reports CE Mark approval, Australian TGA inclusion and UK MHRA registration, and says minimum contracted sales now total about A$5.1 million across more than 31 countries. It also reported Revenue of A$150,000 in the June 2026 quarter.

The funding is aimed at scaling operations to meet that demand. Shareholder approval is required for Peters Investments' potential holding after any conversions.

The company's own illustrative figures show the potential effect on share numbers. After the proposed consolidation, there would be about 309.5 million existing shares. If the existing Peters note converted, that would add about 175 million shares, and the new note about 87.5 million, for roughly 572 million in total. That excludes around 779 million unlisted options, and the figures are illustrative only.

Analytically, investors may weigh the operational funding against potential dilution and the 12.5% interest cost.

What should investors watch next?

The company has set out an indicative timetable, subject to change:

  • October 2026: AGM notice dispatched.
  • 25 November 2026: AGM, including the proposed share consolidation.
  • November and December 2026: EGM notice and meeting on the convertible note approvals.

Investors may also be watching further Felix orders, progress on the FDA pathway, and any update on the unmarketable parcel Facility the company is considering.