KUALA LUMPUR (July 13): Techna-X Bhd (KL:TECHNAX) has scrapped its proposed RM1.17 million debt settlement via the issuance of new shares.

In a bourse filing on Monday, Techna-X said the plan was dropped after the company and its creditors mutually agreed to terminate the settlement agreements.

As a result, the proposed issuance of 77.71 million settlement shares announced on May 26 will no longer carried out.

Two other proposals announced on May 26 — a RM38 million share capital reduction to eliminate accumulated losses and a private placement of up to 30% of its issued shares — shall proceed, the company said.

Meanwhile, Techna-X is also calling off its plan to terminate its existing employees' share option scheme (ESOS) and introduce a new one. It said it may revisit the proposal in the future if deemed appropriate.

The capital reduction will eliminate the company's accumulated losses of RM34.8 million, leaving it with retained earnings of RM2.71 million as at Dec 31, 2025.

At the company level, accumulated losses of RM31 million will be offset, leaving it retained earnings of RM6.5 million.

Meanwhile, the private placement is expected to raise about RM1.76 million, based on an illustrative issue price of two sen per placement share. Of the total proceeds, RM1.27 million will be used for working capital and RM489,000 to defray expenses related to the proposals.

The placement shares will be placed out to third-party investors which will be announced later, the company said.

The proposed placement comes after Techna-X raised RM1.85 million through a private placement completed in July 2025. The proceeds were earmarked mainly for the repayment of trade payables and working capital.

Upon completion of both capital reduction and private placement exercises, Techna-X's issued share capital will be reduced to RM30.46 million from RM66.7 million, while its total issued shares will rise from 293.9 million to 382.08 million.

The company’s gearing ratio will be reduced to 0.38 times from 0.44 times as at end-Dec 2025.

For the 18-month financial period ended Dec 31, 2025, Techna-X posted a loss after tax of RM29.26 million, widening from a loss of RM19.20 million in the previous 18-month period ended June 30, 2024, as revenue fell 13% to RM81.47 million from RM93.66 million.

Net loss from continuing operations stood at RM42.28 million for the 18-month financial period ended Dec 31, 2025, versus a net profit of RM4.78 million in the previous 18-month period ended June 30, 2024.

The weaker results were mainly due to the disposal of the company's food and beverage subsidiaries, as well as bad debts written off, impairment losses on other receivables and intangible assets, losses on the disposal of subsidiaries, and expenses related to its ESOS.

Techna-X, which is involved in the technology-driven food and beverage business, expects the proposals to be completed by the fourth quarter of 2026.

TA Securities has been appointed as principal adviser and placement agent for the private placement.

Techna-X’s share price closed up one sen or 50% to three sen on Monday, giving the company a market capitalisation of RM9 million.