Conico Ltd (CNJ) has announced a series of financial maneuvers aimed at resolving a legal dispute, strengthening its balance sheet, and providing working capital. The company has settled a legal dispute with Cartwright Drilling Inc. regarding unpaid invoices from the 2022 Greenland field season. The settlement involves a cash payment of approximately A$721,110 and the issuance of 34,658,000 fully paid ordinary shares. To fund the initial cash payment, Conico secured $900,000 in converting loans from sophisticated investors, including a director of the company. These loans will convert into ordinary shares upon shareholder approval.
Further, Conico plans a fully underwritten non-renounceable entitlement offer to raise approximately $1.19 million (before expenses) at $0.001 per share ($0.08 post consolidation), on a 4-for-5 basis. RM Corporate Finance is the lead manager and underwriter for the entitlement offer, receiving fees payable in cash and shares, subject to shareholder approval. The company also intends to consolidate its securities on a 1-for-8 basis before the entitlement offer. A general meeting is scheduled for July 2025 to seek shareholder approval for the loan conversion, share issuance, and consolidation. In a move to preserve cash, Conico intends to settle outstanding related party debts, including director’s fees and advisory fees to RM Corporate Finance, through the issuance of shares at the same price as the Rights Offer, which is also subject to shareholder approval.
Following these transactions, the pro forma capital structure will be significantly altered, with total pro-forma shares on issue reaching 347,278,870. The company anticipates completing the entitlement offer by late August 2025. The underwriting agreement with RM Corporate includes standard termination clauses, including material omissions in the prospectus, ASX listing issues, and adverse market conditions.
