[At a Crossroads: Listed Companies] ① Second Postponement of Paid-in Capital Subscription Date... US Fund Called Investor Remains Veiled

Paid-in date for 30 billion won capital increase changed from June 30 to July 27
Only the main page of the XT ESS Fund website, the subject of the capital increase, exists

The payment date for the 30 billion KRW rights offering conducted by Zaigle, a KOSDAQ-listed company, has been postponed again. This is the second time since the initial announcement in April. As a result, doubts are growing in the market about the possibility of the rights offering payment and the investor known as a U.S.-based fund.

According to the Financial Supervisory Service's electronic disclosure, Zaigle corrected its announcement to state that the payment date for the rights offering, originally set for the 30th of last month, has been changed to the 27th of next month, about a month later. The third-party allottee requested the change in the payment date, causing the delay.

Previously, Zaigle announced on April 4th that it had decided on a 30 billion KRW third-party allotment rights offering. The initial payment date was May 15th. However, when May 15th arrived, Zaigle postponed the payment date to June 30th. Including this time, the payment date has been delayed twice in total.

Zaigle is a company that manufactures the infrared cooking device "Zaigle" and was listed on KOSDAQ in 2016. After listing, Zaigle's popularity waned, and its performance suffered.

In this situation, Zaigle suddenly announced in December last year that it would pursue a new secondary battery business. Accordingly, it acquired secondary battery manufacturing facilities and research equipment worth 7.4 billion KRW. Additionally, in March, it announced plans to establish a secondary battery joint venture (JV) in Virginia with a U.S. partner company.

The 30 billion KRW rights offering is also part of the secondary battery business expansion. Zaigle stated that if the rights offering payment is made, 6.3 billion KRW will be used for debt repayment, and the remaining 23.7 billion KRW will be used as operating funds. The operating funds are presumed to be used for establishing the JV.

In fact, if the 30 billion KRW rights offering funds do not come in, it is expected to be difficult to proceed with the secondary battery business. Currently, the core business is underperforming, and the internal cash reserves are insufficient to cover the investment. As of the end of Q1 this year, Zaigle's cash equivalents stand at about 3.4 billion KRW.

Zaigle has been operating at an operating loss since 2021. Last year, it recorded sales of 15 billion KRW and an operating loss of 2.7 billion KRW. Sales decreased by more than 25% compared to the previous year. In Q1 this year, sales were 1.3 billion KRW, a decrease of over 70% compared to the same period last year.

Moreover, short-term borrowings amount to about 17.9 billion KRW, with an interest rate in the 5% range, resulting in approximately 900 million KRW in annual interest expenses. The interest expenses are reflected in Zaigle's net loss. Among the borrowings is a loan of 6.3 billion KRW for the previously acquired secondary battery manufacturing facilities.

Although the rights offering funds are essential for pursuing the new business, the continuous postponement of the payment has raised suspicions in the market. Furthermore, the rights offering allottee remains shrouded in mystery, increasing curiosity.

According to Zaigle's disclosure, the rights offering allottee is XT ESS FUND. The entity holding 99.87% of this fund is XT SPAC FUND LLC., which reportedly has a capital of 39.1 billion KRW. In an interview, Zaigle CEO Lee Jin-hee introduced XT ESS FUND as "a fund headquartered in Washington, U.S., specializing in secondary battery investments" and the largest shareholder.

However, the website presumed to be for this fund, called "AP Merchant," currently only has a main page and appears to be inactive. Sections introducing investment experience or personnel are not even accessible. The last update on the website was on January 26th.

Regarding this, a Zaigle official stated, "Due to the sensitive nature of XT SPAC FUND's work, the website has not been updated, but it will be maintained once internal investment operations are established," adding, "The rights offering is under negotiation, and it is difficult to comment at this stage."