How Will Ryzon’s $1.5M Debt-for-Equity Swap Reshape Its Capital Raise?

Capital Raising Extension and Debt-for-Equity Clarifications

Ryzon Materials Ltd (ASX, RYZ), a vertically integrated lithium-ion battery materials company, has lodged a second supplementary prospectus with ASIC on 10 December 2025. The document extends the closing date of its ongoing capital raising offer to 12 December 2025 and provides important clarifications on the classification of certain debt-for-equity transactions, particularly involving its strategic partner Yantai.

The company has reclassified the Yantai Placement Offer, originally presented as a cash subscription, as a debt-for-equity offset. This involves issuing shares and free-attaching options to Yantai to satisfy $1.5 million advanced for working capital earlier in 2025. This adjustment means the funds were not newly raised but rather converted from existing advances, reflecting a more accurate financial position.

Robust Demand and Updated Capital Structure

Ryzon has received applications for 181.2 million shares under the Placement Offer, raising approximately $9.06 million in cash proceeds. Additionally, shares and options will be issued to creditors converting debts totaling $666,750, and to Yantai under the additional placement, bringing the total shares to be issued to 214.5 million. Post-offer, the company’s capital structure will expand to approximately 1.84 billion shares and over 501 million options, significantly diluting existing shareholders but providing necessary liquidity.

The proceeds from the capital raising are earmarked for advancing the Nachu Project in Tanzania, covering water infrastructure, civil works, permitting, licensing, and staff costs, alongside corporate overheads and working capital. The company states it will have sufficient working capital for 12 months following ASX reinstatement, which has been extended to 19 December 2025.

Strategic Implications and Investor Considerations

The reclassification of the Yantai Placement Offer underscores Ryzon’s strategy to manage its working capital through debt conversion rather than fresh equity, potentially limiting immediate cash dilution but increasing share count. This move also reflects the company’s ongoing reliance on strategic partners and creditors to sustain operations during its development phase.

Investors should note the speculative nature of the investment, as highlighted by the company, with risks inherent in project execution and market conditions. The extension of the ASX reinstatement deadline provides additional time for compliance but also prolongs uncertainty around trading resumption.

Director disclosures include the expiry of certain options held by Mr. Hoshi Daruwalla, indicating some shifts in insider holdings. Overall, the supplementary prospectus offers a clearer picture of Ryzon’s financial and capital position as it navigates its next growth phase in the battery materials sector.