Cycliq Group Updates On Debt Restructuring Exercise

Cycliq Group Updates On Debt Restructuring Exercise

The Aussie cycle accessories manufacturer, Cycliq Group Ltd (ASX: CYQ) today updated the investors about its debt restructuring exercise. CYQ has successfully completed the first drawdown on a two million secured debt facility with silicon-valley based Partners for Growth (PEG).

The total funds received on the facility for the month of March 2019 was $792,661. The company reportedly used a portion of the amount to restructure and retire the current $1.5 million shareholder loan facility. The Toad Group Pty Ltd provided one million of the shareholder loans. It is to be noted that this entity is associated with the company Chairman, Chriss Singleton.

To aid the company’s cash flow, the interest accumulated over the life of the loan is proposed to be converted to 9,832,429 shares. Extraordinary General Meeting is scheduled to be held on 30 April 2019 to get the shareholders approval. These shares would be issued on the same terms as the recent equity raisings of $0.007 per share.

PEG is a US-based investment firm that provides growth capital and debt funding solutions to rapidly growing technology companies in Australia and globally. PEG has a successful legacy supporting small-cap and high-growth companies.

On 1 April 2019, the company issued the Notice of General Meeting to be held on 30 April 2019. The meeting is held to consider the following resolution.

Resolution 1- Ratification of previously issued shares.

With accordance with the listing rule 7.4, shareholders ratify 2,217,277 shares under listing rule 7.1 and 9,285,714 shares and 4,642,858 options under the listing rule 7.1

Resolution 2- Approval to issue Interest Shares.

Pursuant to and in accordance with listing rule 10.11, shareholders approve the issue of 9,832,429 shares in satisfaction of interest payable under the loan agreement to The Toad Group Pty Ltd, an entity affiliated to Chris Singleton.

Resolution 3- Approval to issue Incentive securities.

Pursuant to and in accordance with listing rule 10.11 shareholders approve following the issue of securities to Chris Singleton, 4,642,857 shares; and 2,321,429 Options.

The company had recently announced its interim financial report. In the half-year ended 31 December 2018, the company achieved revenue and unit sales from the launch of CYQ’s new Fly12 and Fly6 connected Edition products. Unit sales for the half year stood at 14,028 units, reporting a growth of 23 percent and this was without the benefit of the new product launch in this period.

The revenue jump of 57% at $3.03 million was delivered through an increased average revenue per unit which was supported by consistent and increasing repeat orders from key distributors and retail partners in the USA, UK, South Korea, Japan, and Australia.  The margins were steady at 33 percent due to stable manufacturing relationships with the existing suppliers. The company reportedly sees an upside in scale efficiencies.

Stock Price Information:

The stock has delivered a negative one-year return of 75.00 percent.

The shares of CYQ closed the day’s trading at A$0.003 on ASX, down 25% (As on 02 April 2019).

CYQ’s market capitalization stood at A$3.81 million. The total outstanding shares stood at ~ 953.51 million. The company’s EPS stood at -0.003 AUD.


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