The Data Exchange Network Limited (ASX: DXN), a company which belongs to the information technology sector and into the business of designing, building, owning and operating data centers, announced that the board of directors have decided to exercise their discretion to cancel the Share Purchase Plan, as per the clause 14.1 of the Share Purchase Plan (SPP) Terms and Conditions announced on 21 December 2018.
The reason for the cancellation of the share purchase plan was the company’s share price is below the offer price mentioned in the share purchase plan which made the share purchase plan look unattractive. Also, the company has no plans to re-issue the share purchase plan at a lower rate.
After the cancellation of the share purchase plan, the company’s director thanked all the shareholders who participated in share purchase plan and also who supported the company in taking entitlement. The company will soon return all the application monies received from these shareholders who cancelled the SPP, without interest as soon as possible.
On 17 December 2018, the company announced that it successfully secured the placement of 12,748,383 ordinary shares at $0.155 per share. Also, the company invited the existing shareholders to invest in the Company through SPP at $0.155 per share price. The reason for raising the fund through SPP was that the company had further planned to increase the power capacity to 1MW at Port Melbourne and Homebush, Sydney.
On 25 December 2018, the company extended the closing date of the SPP from 25 January 2019 to 8 February 2019 to allow the shareholders who wished to participate in the SPP and get the application and payment by 8 February 2019.
On 4 February 2018, the company gave a review of its operations and strategy update. It stated that the company had realigned its short-term and medium-term priorities to accommodate the current cash position. It also updated the capital expenditure of Sydney and Melbourne Data Centre and delivery of these data centres, the operating expenditure review, the organizational update which highlighted the resignation of the CEO followed by the appointment of new interim CEO and also provided the update on the previous capital raising & share purchase plan update.
By the end of the December quarter on 31 December 2018, the company used A$1.474 million from its operating activities. The main source of cash outflow was in the form of staff costs, product manufacturing and operating costs and payment made for the property leased assets. During the quarter, the company also acquired property, plant and equipment. As a result, the net cash outflow from the investing activities was A$3.658 million. During the December quarter, the company generated revenue from the issue of shares and through finance facility drawdown. As a result, the net cash inflow after meeting the transaction cost associated with the issue of shares, convertible notes or options and repayment of the finance facility was A$3.439 million.
By the end of the December quarter on 31 December 2018, the net cash available with The Data Exchange Network Limited was A$6.971 million. The company’s estimated cash outflow in the March quarter is A$5.110 million.
The stock since its inception on ASX has generated a negative return of 67.60%. The stock has provided a negative YTD return of 40% till date. It is trading at A$0.081 today (2:20 pm, 8 February 2019) with the market capitalization of 15.7 million and approximately 193.83 million outstanding shares.
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