Klevo Rewards Launches $4.1M Equity Raise and Converts $2.2M Debt

Background and ASX Suspension

Klevo Rewards Limited, formerly known as My Rewards International Limited, remains suspended from official quotation on the ASX following a determination in October 2023 that its financial condition was inadequate. This suspension has persisted as the company works to meet stringent reinstatement conditions set by the ASX, including demonstrating sufficient working capital and compliance with listing rules.

Capital Raising Initiatives

In a supplementary prospectus dated 25 September 2025, Klevo Rewards announced a non-renounceable entitlement offer targeting approximately $4.117 million in new equity. This capital raise is complemented by a recent debt conversion, where $2.19 million of accrued liabilities, including unpaid director fees and third-party loans, were converted into shares at a price of $0.009 per share. These moves are designed to strengthen the company’s balance sheet and satisfy ASX Listing Rule 12.2 requirements for reinstatement.

Operational and Strategic Developments

Since acquiring Fly Wallet in April 2025, Klevo Rewards has onboarded new clients and reported steady month-on-month transactional growth, validating its strategic expansion into integrated loyalty and rewards platforms. The company’s financial strategy focuses on improving gross margins by eliminating loss-making products, implementing AI-driven efficiencies, and diversifying revenue streams through B2C and B2B offerings, including the Klevo Rewards Card and Frankly Marketing Services.

Underwriting and Control Considerations

The entitlement offer is partially underwritten up to $3.4 million by three parties – Abreco Enterprises Pty Ltd, Nightfall Limited, and director Alexander Gold acting as trustee for Klevo Trust. Notably, Mr. Gold’s underwriting and sub-underwriting commitments could increase his shareholding to a maximum of 10.49%, raising potential control implications. The board has taken steps to mitigate these effects, including prioritizing eligible shareholders in the shortfall allocation and ensuring arm’s length terms for related party agreements.

Risks and Litigation

Klevo Rewards faces significant risks, including the looming ASX delisting deadline of 17 November 2025 if reinstatement conditions are not met. The company is also engaged in ongoing litigation, including a statutory demand from a former employee and a creditor demand from the Commissioner of State Revenue Victoria, which could lead to winding-up proceedings for its subsidiary My Rewards Pty Ltd. Additionally, a settlement dispute with Frankly Agency Pty Ltd remains a financial obligation to be addressed through the capital raise and future revenues.

Use of Funds and Outlook

Funds raised will primarily be allocated to debt reduction, including settlement of the Frankly dispute and Fly Wallet acquisition payments, with additional resources directed towards marketing and working capital to support ongoing operations. The board expresses confidence in achieving positive operating cash flows within the current financial year, supported by a growing client pipeline and improved customer cash receipts.