Carbonxt’s Loyalty Options: $697K Raised, $4.88M Potential Capital Injection

Entitlement Offer Details

Carbonxt Group Limited (ASX – CG1) has announced a non-renounceable pro-rata entitlement offer to its eligible shareholders, inviting them to acquire Loyalty Options at an issue price of $0.01 each. Shareholders registered as of 7 – 00pm (AEST) on 27 August 2025 will be entitled to one Loyalty Option for every six shares they hold. Each Loyalty Option carries an exercise price of $0.07 and will expire three years from the date of issue.

The offer is fully underwritten by Chaleyer Holdings Pty Limited, with sub-underwriting commitments from directors and a substantial shareholder, ensuring the company can raise the targeted capital regardless of shareholder take-up.

Capital Raising and Use of Funds

If fully subscribed, the offer will raise approximately $697,772 before costs from the issue price of the Loyalty Options. Should all options be exercised, Carbonxt stands to raise an additional $4.88 million, providing a significant capital injection. The company intends to allocate the initial proceeds primarily towards working capital and retiring existing debt, supporting ongoing operations and growth initiatives.

This capital raise aligns with Carbonxt’s strategic objectives, particularly the commissioning and expected operational ramp-up of its new Activated Carbon manufacturing facility in Kentucky, USA. This facility represents a material increase in the company’s production capacity and market presence.

Shareholder Impact and Control Considerations

The Loyalty Options do not confer voting rights until exercised. Shareholders who do not participate risk dilution of their ownership percentage if other shareholders or the underwriters exercise their options. However, the company has structured the offer to minimize any shareholder increasing their voting power above 19.99%, complying with Australian takeover provisions.

Directors Matthew Driscoll, Warren Murphy, David Mazyck, and Nicholas Andrews are participating as sub-underwriters, collectively underwriting up to 30 million Loyalty Options. Their involvement underscores management’s confidence in the offer and the company’s prospects.

Risks and Market Context

Carbonxt’s business is subject to a range of risks, notably regulatory dependencies on US environmental policies such as the Mercury Air Toxic Standards and forthcoming PFAS regulations, which drive demand for Activated Carbon products. The company also faces operational risks related to the new Kentucky facility’s construction and ramp-up, intellectual property protection challenges, and market competition.

The offer document emphasizes the speculative nature of the investment, advising shareholders to consider these risks carefully and seek professional advice before participating.

Next Steps and Market Implications

The entitlement offer opens on 1 September 2025 and closes on 10 September 2025, with the Loyalty Options expected to be issued and quoted shortly thereafter. Market participants will be watching subscription levels closely as an indicator of shareholder confidence and the company’s ability to fund its growth trajectory.