Rights Issue Boosts The Calmer Co., But Dilution Risks Loom
The Calmer Co. International Limited has successfully closed a renounceable rights issue, raising just over $1 million and issuing hundreds of millions of new shares and options. Directors’ strong participation signals confidence as the company prepares for growth.
- Raised $1 million through renounceable rights issue
- Issued 333 million new shares and 166 million options
- Directors and management fully participated in the offer
- Funds earmarked for capital expenditure, inventory, marketing, and working capital
- Options exercisable at $0.006, expiring June 2026
Successful Capital Raise Amid Challenging Times
The Calmer Co. International Limited (ASX: CCO), a fast-growing player in the natural beverage sector, has announced the successful completion of its renounceable rights issue, raising $1,000,713 before costs. The capital raise involved issuing 333,570,982 new fully paid ordinary shares alongside 166,785,491 options exercisable at a modest $0.006 each, with an expiry date set for 30 June 2026.
This move comes as the company looks to bolster its balance sheet and fund expansion initiatives, signaling a vote of confidence from its directors and management who not only took up their entitlements but also participated in the shortfall. Their involvement underscores a strong belief in the company’s growth prospects despite the broader market uncertainties.
Strategic Deployment of Funds
The net proceeds from the rights issue are earmarked for several key areas: capital expenditure to support operational capacity, inventory expansion to meet growing demand, marketing and brand promotion to enhance market presence, and general working capital to maintain day-to-day business activities. This diversified allocation suggests a balanced approach to scaling the business while maintaining financial flexibility.
The Calmer Co. operates in the natural products space, focusing on kava-based beverages and other relaxation aids under brands such as Fiji Kava, Taki Mai, and Danodan Hempworks. These products are distributed globally through e-commerce and established retail partners, targeting markets including the USA, Australia, New Zealand, China, and the Pacific Islands.
Looking Ahead: Share Issuance and Market Impact
The new shares and options are expected to be issued on 16 May 2025, with the options to be listed under the ASX code CCOOA. The company has also retained the discretion to place any shortfall shares within three months of the closing date, a factor that investors will watch closely for potential dilution or strategic placements.
Mahe Capital Pty Ltd acted as the lead manager and underwriter for the offer, providing a layer of assurance to the market regarding the transaction’s execution. While the rights issue strengthens The Calmer Co.’s financial position, the relatively low exercise price of the options and their expiry timeline offer an interesting dynamic for shareholders considering future dilution and potential upside.
Overall, this capital raise marks a pivotal step for The Calmer Co. as it seeks to capitalize on the growing global demand for natural, alcohol-alternative beverages. The company’s ability to convert this capital into sustainable growth will be critical in the coming months.
Bottom Line?
With fresh capital secured and leadership fully invested, The Calmer Co. is poised for its next growth phase—but investors will be watching how effectively the funds translate into market traction.
Questions in the middle?
- How will The Calmer Co. prioritize spending across capital expenditure, inventory, and marketing?
- What impact will the shortfall placement have on share dilution and investor sentiment?
- How might the low exercise price of options influence future share price dynamics?