Morella : Compliance Prospectus

ASX Announcement

For personal use only

24 January 2022

Lodgement of Prospectus

Morella Corporation Limited (ASX: 1MC "Morella" or "the Company") is pleased to advise that the Company has today lodged the attached Prospectus with the ASIC.

This Prospectus has been prepared for the purposes of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of Shares issued by the Company prior to the Closing Date without disclosure under Part 6D of the Corporations Act and to allow the Shares that are issued on exercise of the Canaccord Options to be on-sold without disclosure in accordance with ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2016/80.

The Offers are only available to those persons who are personally invited by the Company to accept the Offers.

Contact for further information

Investors | Shareholders	Media
Alex Cheeseman	Michael Weir
Chief Executive Officer	Citadel Magnus
E:[e-mail]	M: 0402 347 032

This announcement has been authorised for release by the Board of Morella Corporation Limited.

About Morella Corporation Limited Morella is an exploration and resource development company focused on lithium and battery minerals. Morella is currently engaged in exploration activities on two project opportunities, strategically located, in Tier 1 mining jurisdictions in both Australia and the United States of America. Morella will secure and develop raw materials to support the surging demand for battery minerals, critical in enabling the global transition to green energy.

ACN 093 391 774

Suite 5 • 680 Murray Street • West Perth • WA • 60051 www.morellacorp.com

For personal use only

MORELLA CORPORATION LIMITED

ACN 093 391 774

PROSPECTUS

For the offer of:

1. 1,000 New Shares at an issue price of $0.035 per New Share (Cleansing Offer); and
2. 150,000,000 Canaccord Options (Options Offer),

(together, the Offers).

This Prospectus has been prepared for the purposes of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of Shares issued by the Company prior to the Closing Date without disclosure under Part 6D of the Corporations Act and to allow the Shares that are issued on exercise of the Canaccord Options to be on-sold without disclosure in accordance with ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2016/80.

Important Notice

This document is important and should be read in its entirety (including the 'Risk Factors' in section 4)

before deciding whether to apply for New Shares or Canaccord Options. If, after reading this Prospectus, you have any questions about the New Shares or Canaccord Options being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser.

The New Shares and Canaccord Options offered by this Prospectus should be considered

speculative.

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IMPORTANT NOTES

This Prospectus is dated 24 January 2022 and a copy of this Prospectus was lodged with ASIC on that date. ASIC, ASX and its officers, respectively, take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. The Company will apply to ASX for the New Shares to be granted quotation on ASX.

Neither of the Offers are available to the general public. The Offers are only available to those persons who are personally invited by the Company to accept the Offers. The Company will provide an Offer Application Form to those persons only.

This Prospectus does not constitute an offer in any place in which or to any person to whom it would not be lawful to make such an offer. Applications for securities offered pursuant to this Prospectus can only be submitted on an original Application Form which accompanies this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore, persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply

with these restrictions constitutes a violation of those laws.

Applicants should rely on their own knowledge of the Company, refer to disclosures made by the Company to the ASX and consult their professional advisers before deciding whether to accept the Offers. Announcements made by the Company to ASX are available from the ASX website at http://www.asx.com.au/. The information in this Prospectus does not constitute a securities recommendation or financial product advice.

In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

This Prospectus, including each of the documents attached to it and which form part of this Prospectus, is important and should be read in its entirety prior to making an investment decision. If you do not fully understand this Prospectus or are in any doubt as to how to deal with it, you should consult your professional adviser.

In particular, it is important that you consider the risk factors in section 4 that could affect the performance of the Company before making an investment decision.

Some words and expressions used in this Prospectus have defined meanings which are explained in section 6.

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CONTENTS
1.	DETAILS OF THE OFFERS ...............................................................................................	2
2.	USE OF FUNDS AND EFFECT OF THE ISSUE ................................................................	5
3.	RIGHTS AND LIABILITIES ATTACHING TO NEW SECURITIES.....................................	6
4.	RISK FACTORS .................................................................................................................	9
5.	ADDITIONAL INFORMATION..........................................................................................	16
6.	GLOSSARY ......................................................................................................................	21

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1. DETAILS OF THE OFFERS

1.1 Purpose of the Offers

On 21 January 2022, the Company announced the Share Issue.

Further, as previously disclosed by the Company, Canaccord Genuity (Australia) Limited (Canaccord) was appointed as corporate adviser to the Company for the Company's December 2021 Entitlement Offer. As part of that appointment and in accordance with the Corporate Adviser Mandate between the Company and Canaccord, the Company agreed to issue 150,000,000 Options, in three tranches, to Canaccord as consideration for the services provided.

The Share Issue and Option issue, were conducted under the Company's existing placement capacity pursuant to Listing Rule 7.1.

Generally, section 707(3) of the Corporations Act requires that a prospectus is issued in order for a person to whom securities were issued without disclosure under Part 6D of the Corporations Act to on-sell those securities within 12 months of the date of their issue.

Section 708A(11) of the Corporations Act provides an exemption from this general requirement where:

1. the relevant securities are in a class of securities of the company that are already quoted on ASX;
2. a prospectus is lodged with ASIC either:
3. 1. on or after the day on which the relevant securities were issued; or
   2. before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are still open for acceptance on the day on which the relevant securities were issued; and
4. the prospectus is for offers of securities issued by the company that are in the same class of securities as the relevant securities.

The purpose of this Prospectus and the Offers is to:

1. comply with section 708A(11) of the Corporations Act so that the holders of Shares issued without disclosure (including those under the Share Issue) can, if they choose to, sell those Shares within the next 12 months without disclosure; and
2. in accordance with ASIC Corporations (Sale Offers That Do Not Need Disclosure) Instrument 2016/80, to allow the holders of Shares issued upon exercise of the Canaccord Options the ability to sell those Shares within the next 12 months without disclosure.

The under the Share Issue, and any issue of Shares pursuant to the exercise of the Canaccord Options, was not undertaken by the Company with the purpose of selling or transferring. However, the Directors consider that the holders should be able to sell the Placement Shares and any issue of Shares pursuant to the exercise of the Canaccord Options, without the need for disclosure under Part 6D.2 of the Corporations Act.

1.2 Details of the Cleansing Offer

The Company offers for subscription 1,000 New Shares at an issue price of $0.035 per New Share under this Prospectus. The Offer is being extended to unrelated persons who are invited by the Company to subscribe for Shares and is not open to the general public.

Any funds raised from the Cleansing Offer will be applied towards the expenses of the Offers.

The New Shares offered under this Prospectus will rank equally with the Shares on issue. A summary of the rights and liabilities attaching to the Shares is set out in section 3.1.

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1.3 Details of the Options Offer

By this Prospectus, the Company invites the Eligible Participant (or their nominee) to apply for 150,000,000 unlisted Options, through the issue of Options in three tranches, consisting of:

1. 50,000,000 Options with an exercise price of $0.006 per option and expiry date of 3 years from the date of issue (Tranche 1 Canaccord Option);
2. 50,000,000 Options with an exercise price of $0.007 per option and expiry date of 3 years from the date of issue (Tranche 2 Canaccord Option); and
3. 50,000,000 Options with an exercise price of $0.008 per option and expiry date of 3 years from the date of issue (Tranche 3 Canaccord Option),

(the Canaccord Options).

The Canaccord Options are issued pursuant to the terms of the Corporate Adviser Mandate as consideration for the services to be performed by Canaccord.

Only the Eligible Participant (or their nominee) may apply for the Canaccord Options under the Options Offer and the Company will only provide an application form to the Eligible Participant (or their nominee).

The Canaccord Options are issued on the terms and conditions set out in section 3.2.

1. Minimum Subscription
   There is no minimum subscription in respect of the Offers.
2. Opening and Closing Dates
   The opening date of the Offers will be 24 January 2022 and the Closing Date will be 5pm WST on 28 January 2022. The Directors reserve the right to close the Offers early or extend the Closing Date (as the case may be), should it be considered by them necessary to do so.
3. Application, Issue of New Shares and Canaccord Options and Application Money
   Only parties invited by the Directors should apply under the Offers.
   An Application for New Shares must be made using the Application Form and must follow the procedures advised by the Company to apply for New Shares under the Cleansing Offer.
   Applications for the Canaccord Options may only be made by the Eligible Participant (or their nominee) using the Application Form and must follow the procedures advised by the Company to apply for the Canaccord Options under the Options Offer.
   The Directors reserve the right to reject any Application for New Shares or application for Canaccord Options or to allocate any applicant fewer New Shares or Canaccord Options than the number applied for as the case may be.
   Where the number of New Shares issued is less than the number applied for, the surplus money will be returned by cheque as soon as practicable after the Closing Date. Where no issue is made, the amount tendered on application will be returned in full by cheque as soon as practicable after the Closing Date. Interest will not be paid on money refunded.
   All Application Money received before the New Shares are issued will be held in a special purpose account. After any Application Money is refunded (if relevant) and New Shares are issued to applicants, the Company will be entitled to retain the balance of funds plus all interest that accrues on the bank account and each applicant waives any right to claim that interest.
4. Details of substantial holders
   Based on publicly available information as at the date of this Prospectus, those persons which (together with their associates) have a relevant interest in 5% or more of the Shares on issue are set out below:

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