Federal Court of Australia

Barnden (Deed Administrator), in the matter of BOD Science Limited (Subject to a Deed of Company Arrangement) [2026] FCA 795

ORDERS

THE COURT ORDERS THAT:

1. Pursuant to section 444GA(1)(b) of the Corporations Act 2001 (Cth) (Act), the First Plaintiff (Deed Administrator) has leave to transfer all of the issued shares in the Second Plaintiff (BOD Science) to Biortica Agrimed Limited (Biortica) in accordance with the terms of the deed of company arrangement dated 24 April 2024 as varied from time to time (DOCA).

2. Pursuant to section 447A(1) of the Act and/or section 90-15(1) of the Insolvency Practice Schedule (Corporations) (Cth) (IPS), the Deed Administrator may:

(a) execute, on behalf of the members (as defined in the Act) of BOD Science, share transfer forms (including, without limitation, a master transfer form) and any other documents ancillary or incidental to effecting the transfer of the shares referred to in Order 1; and

(b) enter, or procure the entry of, the name of Biortica into the share register of BOD Science in respect of all the shares transferred to Biortica in accordance with Order 1.

3. To the extent necessary, pursuant to section 447A(1) of the Act:

(a) Part 5.3A of the Act is to operate in relation to BOD Science as if:

(i) the reference to "shares" in section 444GA(1) of the Act includes all vested or unvested, exercised or unexercised share options, warrants, or shares in BOD Science and other instruments convertible into securities in BOD Science (Options); and

(ii) the reference to "members of the company" in section 444GA(3) of the Act includes the holders of the Options; and

(b) the Deed Administrator has leave to transfer all existing Options from the holders of those Options to Biortica in accordance with the terms of the DOCA.

4. To the extent necessary, pursuant to section 447A(1) of the Act and/or section 90-15(1) of the IPS, the Deed Administrator may:

(a) execute share transfer forms and any other documents ancillary or incidental to effecting the transfer of the Options referred to in Order 3; and

(b) enter, or procure the entry of, the name of Biortica into the share register of BOD Science in respect of all Options transferred to Biortica in accordance with Order 3.

5. The Plaintiffs’ costs of and incidental to this application be costs in the deed administration of BOD Science.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

JACKMAN J:

1 This is an application by the plaintiffs BOD Science Limited (Subject to a Deed of Company Arrangement) (BOD Science or the Company) and its deed administrator, Mr Andrew Barnden (Deed Administrator or Mr Barnden), for orders:

(a) that the Deed Administrator of the Company be granted leave pursuant to s 444GA of the Corporations Act 2001 (Cth) (Act) to transfer all of the existing shares in the capital of BOD Science (Shares), from the current members of the Company to Biortica Agrimed Ltd (Proponent) or its nominee (the Share Transfer), in accordance with the Deed of Company Arrangement dated 24 April 2024 as subsequently varied on different occasions (DOCA);

(b) to the extent that it may be necessary, that Pt 5.3A of the Act operate in relation to the Company such that:

(i) the word “shares” in s 444GA of the Act includes all vested or unvested share options, warrants, performance rights or other instruments convertible into securities in the Company (together Options); and

(ii) the words “member(s) of the Company” in sub-s 444GA(3) includes the holders of such Options;

(c) that the Deed Administrator be granted leave also to transfer the Options to the Proponent; and

(d) ancillary machinery orders pursuant to s 447A of the Act that the Deed Administrator may execute share transfer forms and other incidental documents to give effect to the transfer of the Shares and Options and to effect the entry of the name of the Proponent into the share registry of the Company in respect of the transferred shares.

2 In accordance with the procedural orders made on 14 May 2026, the Deed Administrator has given notice of the application to all interested parties, including the creditors and members of the Company. No person has filed an appearance and grounds of opposition to the orders sought on the application or otherwise indicated an intention to appear. No appearance has been made by any other party today, noting that the matter was called outside the court at the commencement of the hearing.

3 BOD Science is a public company, the securities of which were listed on the Australian Securities Exchange (ASX) on 26 October 2016, but which has recently been delisted. The Company is the parent company of an international group of companies. Prior to its external administration, BOD Science carried on business developing medical cannabis drugs as well as hemp products for consumer markets in Australia, the United Kingdom, the United States and Europe.

4 BOD Science entered a trading halt on the ASX on 24 November 2023 and its securities were suspended from official quotation on 28 November 2023. Administrators were appointed to BOD Science by resolution of its directors under s 436A of the Act on 29 November 2023.

5 The Administrators caused the Company to trade during the administration period. They also took steps to market the Company’s intellectual property assets, which were sold, and the proceeds of sale form part of the fund under the DOCA for distribution to BOD Science’s creditors.

6 On appointment, there were three creditors with registered security interests over the collateral of BOD Science. One of the secured creditors was Burleigh Heads Cannabis Pty Ltd (BHC), which had advanced funds to the Company about one month before the appointment of the Administrators (at the same time as the security interest was registered). BHC’s debt was repaid from trading proceeds (although it has not removed the security interests from the Register).

7 The Administrators received a Deed of Company Arrangement proposal from the Proponent, pursuant to which:

(a) the shares in the company will be transferred to the Proponent;

(b) the Proponent was to make a payment into the deed fund of $380,000 (after all of the shares were transferred to the Proponent by agreement of the shareholders or court order);

(c) a creditor’s trust would be established to pay a dividend for the claims of creditors; and

(d) the employment of BOD Science’s employees was to continue and their accrued entitlements would be preserved and met by BOD Science in the ordinary course of business after completion of the restructure. The estimated return to ordinary unsecured creditors was low (between 1.06 and 2.58 cents in the dollar) but better than a liquidation scenario (where the estimated return to such creditors was nil, and it was possible that even priority employee creditors would not be paid in full).

8 The administrators recommended the proposal and the creditors resolved in favour of it.

9 Following execution of the DOCA, it was varied on a number of occasions to extend the completion date (essentially because of delays by the Proponent). The Proponent has provided funding to cover ongoing trading costs while the Deed Administration has continued (which funding is in addition to the amounts payable by the Proponent under the DOCA, thereby preserving the proposed return to creditors under the DOCA). In addition, a significant component of the company’s research and development tax rebate is to form part of the deed fund to meet the claims of creditors. The estimated return to creditors under the DOCA has increased slightly when compared to the estimate when the creditors resolved in favour of it, such that priority employee creditors will receive 100 cents in the dollar and unsecured creditors will receive between 1.10 and 2.59 cents in the dollar.

10 Under the DOCA:

(a) the entire issued capital in BOD Science is to be transferred to the Proponent, subject to, inter alia:

(i) the Deed Administrator obtaining orders granting him leave to do so under s 444GA of the Act (as sought on this application); and

(ii) an exemption being granted by ASIC from the application of Chapter 6 of the Act;

(b) a creditors’ trust (Creditors’ Trust) will be established whereby, upon effectuation of the DOCA, the claims of creditors against BOD Science (except for certain preserved claims such as employee claims) will transfer to, and become claims against, the Creditors’ Trust, with the Deed Administrator to become the trustee of the Creditors’ Trust;

(c) the proponent is to pay the contributions into the Deed Fund, and in turn, the Creditors’ Trust. These contributions consist of a principal sum of $380,000 plus the balance of cash from the Deed Administration plus a component of the research and development tax rebate.

11 The completion date for the DOCA is 30 June 2026 and Mr Barnden is endeavouring to satisfy all the conditions in the DOCA by then.

12 On 3 June 2026, the Deed Administrator applied to ASIC seeking Chapter 6 relief in respect of the proposed Share Transfer. ASIC has made an “in-principle” decision to provide that relief, the relief being conditional on the court making the orders sought in the Originating Process. That position was confirmed by way of email and letter by ASIC yesterday.

13 If the share transfer does not proceed then completion of the restructure and effectuation of the DOCA will not proceed. The comparative consequences are stark. If the DOCA does not proceed, then the liquidation of BOD Science is practically inevitable given the substantial deficiency of its assets to liabilities. If the company is placed in liquidation, the returns to creditors (including priority employee creditors) estimated by Mr Barnden will be nil, thus demonstrating that creditors will be worse off in that scenario.

14 Further, a liquidation will crystallise additional liabilities of BOD Science, having regard to the effective termination of all the Company’s employees in a liquidation scenario, such that avoiding those additional liabilities by completion of the DOCA from arising will benefit the creditor body as a whole.

15 Section 444GA(1)(b) of the Act permits a deed administrator to transfer shares in a company if the administrator has obtained the leave of the court. The critical issue is the Court’s assessment of whether or not the share transfer brings about any “unfair prejudice” to the members of the company: s 444GA(3).

16 As to whether unfair prejudice to the shareholders will arise from the share transfer, the company has 177,338,493 shares on issue. As the Deed Administrator has explained, subject to the restructure to be brought about by DOCA, the company is insolvent and became insolvent from about 30 June 2023 onwards. The Deed Administrator has concluded that there is a very large deficiency in the assets of BOD Science available to satisfy the debts and claims owing to its creditors.

17 That analysis is supported by the reasoning and conclusions in the independent expert report of Mr Bradley Hellen (and which is not contradicted by any other evidence). Mr Hellen’s report includes a valuation of the equity in the company on a liquidation basis by analysing the value of its net assets by sale of the underlying assets, including the equity in the company’s subsidiaries (although these are all worthless). Mr Hellen assessed the residual equity of BOD Science through an estimation of the realisable value for each of the company’s assets on a liquidation basis, aggregating those values and then deducting the total value of creditors’ claims to arrive at the residual equity value of the company. The valuation on that basis yields a deficiency in assets compared to liabilities of $5,319,625. Accordingly, the value of the equity in the company is nil. That is consistent with the company’s own financial statements and management accounts.

18 In terms of possible voidable transaction recoveries in a liquidation scenario, the only potential claim that the Deed Administrator has identified is a potential claim available to a liquidator estimated to be in the vicinity of $1.674 million. Even taken at its highest, such a claim would not result in any positive residual value in the company’s equity, noting the deficiency of about $5.32 million.

19 The shares in the company therefore have no economic value. The shareholders would be in the same financial position regardless of whether the DOCA is completed or the DOCA fails and the company is wound up. In either case, shareholders will not receive any return. If anything, completion of the DOCA could lead to shareholders benefiting by being entitled to claim any tax loss from the diminution of the value of the Shares at an earlier point in time than if the restructure does not proceed.

20 In contrast, completion of the DOCA provides for a greater estimated return to creditors in comparison to realising the assets of BOD Science in a winding up. Further, the restructure under the DOCA will enable employees to retain their employment with the Company and will enable the business of the company to continue.

21 The Deed Administrator has identified that, prior to the appointment of the Administrators, BOD Science had issued unlisted Options. The only Options that have not lapsed expire on 30 November 2027.

22 Insofar as the holders of the Options have a right to be issued shares in the Company, then the DOCA treats any such rights as a claim that is compromised by the DOCA. Clause 8(a) of the DOCA provides that a “Creditor’s Claim” (other than an “Excluded Claim”, which definition does not pick up the Options) are extinguished, released and discharged (and replaced with a right to claim under the Creditors’ Trust) upon completion. Pursuant to the definition in cl 1 of the DOCA, “Claim” is given a broad meaning. To the extent that holders of the Options have Claims in respect of the Options, then they appear likely to be released under the DOCA.

23 However, if (contrary to my view) the DOCA does not compromise such claims (perhaps because the holders of the Options have claims that are arguably conceived of as equity in the Company), then (to the extent necessary) the Deed Administrator seeks orders pursuant to s 447A(1) of the Act that Pt 5.3A of the Act is to operate as if the reference to the word “shares” in subs 444GA(1) and “members” in subs 444GA(3) includes:

(a) all vested or unvested share options, warrants or shares in the Company; or

(b) instruments convertible into securities in the Company, including any shares or options to which the Instrument Beneficiaries may be entitled,

and that the Deed Administrator be given leave under s 444GA (as so modified) to transfer the options to the Proponent.

24 This relief is sought consistently with the approach recently taken by Beach J in Clubb (Deed Administrator), In the Matter of Toys ‘R’ Us ANZ Ltd (Subject to Deed of Company Arrangement) [2025] FCA 1135. In that case, Beach J observed at [82] that s 444GA contains no reference to options (or other securities convertible to shares) and is limited to shares, and accepted at [91] that the transfer of options would serve the same purpose as the transfer of shares (that is, to meet the transferee’s commercial requirements for control of the company through ownership of its share capital). His Honour also noted at [92] that the option holders would not be unfairly prejudiced by the transfer of their options to the transferee where, in that case (in the absence of the deed of company arrangement), there would be no market for the options, the options would not be capable of exercise and the value of the options was nil. In deciding to make orders to facilitate the transfer of the options to the deed proponent, Beach J concluded at [101]–[106] that if the Deed of Company Arrangement did not deal with the claims, then s 447A was an available source of power to modify s 444GA to bring about a result that the securities would be transferred (together with the shares in the company).

25 It is appropriate in this case to grant the relief sought by the Deed Administrator in relation to the options in order to ensure certainty. As the Shares in the Company have no economic value, whether in a DOCA scenario or a liquidation scenario, the Options in respect of the Shares in the Company presently have no economic value and, consequently, no prejudice to the holders of the Options would be occasioned. If the DOCA is not completed, then for the reasons given above, it is practically inevitable that the Company would be placed into liquidation and the Options would have no residual value (whether they are treated as a claim for the purposes of s 553 or as equity). In other words, the position of the holders of the Options is relevantly the same as that of the Shareholders.

26 A number of additional considerations should be noted. First, a detailed description of the structure and the impact on members has been provided in the form of an Initial Explanatory Statement and a Supplementary Explanatory Statement and shareholders have been given a full opportunity to appear in opposition to the application. No shareholder has sought to appear or otherwise raised any objections. Second, ASIC has now granted “in-principle” relief from the takeover provisions in Chapter 6 of the Act. ASIC was provided with the relevant materials, including Mr Hellen’s expert report. It has had an opportunity to evaluate the restructure and has raised no objection. Third, the transaction contemplated by the DOCA advances the objects of Pt 5.3A of the Act as set out in s 435A(a), in that it provides for a continuation of the business of BOD Science and the retention of its employees.

27 Accordingly, I make the orders sought by the plaintiffs.

Associate:

Dated:    19 June 2026