SeaDragon has managed to stave off possible receivership or liquidation after shareholders backed resolutions to allow a $4 million cash injection.

"Management's current estimates have SeaDragon unlikely to pay its debts as they fall due sometime during July this year unless a capital injection is provided," the company said in the notice of today's special meeting. In that event, the "directors will have no option but to place the company into receivership or liquidation."

The interdependent resolutions were related to cornerstone shareholder Pescado - largely owned by SeaDragon director Mark Stewart - agreeing to provide $4m via a convertible loan note with a number of conditions, one of which requires the existing convertible noteholders, including Pescado, to forgo interest.

Chair Bryan Mogridge said the action saves the company approximately $1m over the next year and coupled with the $4m of convertible loan note effectively provides $5m over the next 12 months should the full amount be required.

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He said the funds were necessary because the company hasn't performed to expectations. "Despite revenue being some 50 per cent higher than the previous year we anticipate a loss of around $6.6m after tax from operations, being provisionally recorded." It flagged the loss earlier this year.

The cash injection should be sufficient to see the company through April/May 2020, he said.

Mogridge said it is highly likely that the new notes will convert to equity on March 31, 2021.

With the existing convertible notes held by Comvita, Pescado and BioScience converting in March 2020, and assuming the options held by Comvita are not exercised and that no further equity is issued, Stewart's Pescado will end up owning 39.44 per cent of SeaDragon, BioScience will hold 17.18 per cent, Comvita 13.79 and other shareholders will collectively own 29.69 per cent, he said.

According to Mogridge, the company's plan to shift up the value chain to Omega 3 markets is still valid, but the time to achieve an acceptable profit will be longer than first thought.

"Our goal for management is to endeavour to make this injection last much longer and maybe take the company to a position of cash independence. We will update the market on this as required," he said.

SeaDragon shares last traded at 0.2 cents and are down 33 per cent so far this year. That values the company at about $9.7m.