DGAP-Adhoc: CO.DON AG: Delayed publication of financial statements, agreement on provision of additional liquidity, planned capital increase

CO.DON AG (ISIN: DE DE000A1K0227)

Delayed publication of financial statements, agreement on provision of additional liquidity, planned capital increase

Berlin / Teltow / Leipzig, 27 April 2020 - The publication of the adopted and audited financial statements and consolidated financial statements for co.don Aktiengesellschaft, Teltow (ISIN DE000A1K0227; WKN A1K022) ("company") is not expected to take place within the deadline of four months after the closing of the financial year.

This is due in particular to a sharp increase in its liquidity requirement as a result of the corona crisis. Modifying its existing plans, the Executive Board now assumes that total liquidity of EUR 11.2 million is now required to sustain the company as a going concern, with a total of EUR 15.3 million needed through to break-even in June 2022 for the Group and November 2022 for the parent company. The separate and consolidated financial statements can only be audited and adopted when the conditions for accounting on a going-concern basis are met.

Today the company signed an agreement on the provision of additional liquidity and the extension of existing loans ("undertaking") with a major shareholder, Bauerfeind Beteiligungsgesellschaft mbH ("BBG"). Under this agreement, BBG has assumed obligations to the company totalling around EUR 13.24 million. This includes the contribution of EUR 9.6 million in fresh cash, an obligation to convert the outstanding convertible bonds into shares, the extension of the existing bridge loan in the amount of EUR 1.635 million and the restructuring of the warrant bonds in the amount of EUR 2 million. As a result, the other shareholders and/or new investors in fundraising activities still to be completed will only have to contribute some EUR 2.06 million until break-even.

These funds can be drawn down in full by the company over the course of 2020, unless liquidity has already been provided by third parties.

Specifically, BBG has undertaken to carry out the following steps:

(a) By the end of May 2020: provide funding of EUR 6.5 million as part of a rights issue, to the extent that the other shareholders do not exercise their subscription rights;

(b) By 7 June 2020: convert the four outstanding instalments of convertible bonds into shares;

(c) By the beginning of September 2020: (i) extend the maturity of the bridging loan of EUR 1.635 million until 30 June 2024, (ii) restructure the warrants of EUR 2 million as an additional bridging loan maturing on 31 December 2024, and otherwise with the same terms as the existing bridging loan, (iii) exercise part of the share option issued by the company in 2018, generating proceeds of EUR 2.5 million for the company, (iv) provide funding of EUR 1.5 million as part of a rights issue, to the extent that the other shareholders do not exercise their subscription rights and that together with the other cash funding, provided, BBG does not exceed the maximum amount of EUR 9.6 million.

(d) By the beginning of June 2021 provide funding of EUR 1.2 million as part of a rights issue, to the extent that the other shareholders do not exercise their subscription rights and that together with the other cash funding provided by this date, BBG does not exceed the maximum amount of EUR 9.6 million.

In view of these restructuring activities, and to avoid a delay and additional financial and administrative costs, BBG has made the validity of its undertaking dependent on approval by the German financial supervisory authority ("BaFin") of the company's application for exemption from the obligation to make a mandatory offer ("restructuring exemption"). According to information given to BBG today, such a restructuring exemption will probably not be forthcoming by the end of April 2020, but only by the end of May 2020, so that the audit and adoption of the separate and consolidated financial statements could also be delayed until the end of May 2020. The company assumes that other matters requiring clarification will be discussed with the auditor by this date, these discussions have been delayed due to the corona crisis.

In order to ensure that the funding is provided promptly after BaFin approves the restructuring exemption, the Executive Board and Supervisory Board decided today to carry out the first capital increase provided for in the undertaking in the near future. This cash capital increase is intended to take place as a rights issue, making further use of Authorised capital 2019. The aim is to generate issue proceeds of approx. EUR 6.5 million. The rights issue is expected to start on 8 May 2020 and end on 22 May 2020. Subscription price, subscription ratio and the number of new shares are still to be defined.

The undertaking is subject to the condition that the subscription price to be defined for the new shares does not exceed the volume-weighted average share price of the company shares in the five trading days before 27 April 2020. This means that the subscription price to be defined may not exceed EUR 1.12.

If the requirements for the validity of the undertaking are not met or BBG exercises its right to withdraw from the undertaking because the planned liquidity cannot be obtained by a significant margin, then the company's continued existence would be in jeopardy.

Communicating person: Tilmann Bur, Executive Board

Contact

Matthias Meißner
Director Corporate Communications
Investor Relations / Public Relations
T: +49 (0)30-240352330
F: +49 (0)30-240352309
E: [email protected]