Engage: BDR (“engage:BDR or Company”) (ASX:EN1 and EN1O) is happy to share an update regarding the previously indicated financing activities. With a New York based institutional investor, the Company has signed an agreement to raise an aggregate of A$2M through the placement of convertible notes. The Company also announced that final stage of negotiation of additional capital raising is in progress and soon an update will be shared in this regard.
The raising of capital was done through the convertible notes in order to prevent the dilution of the existing EN1 shareholders. Investments from these institutional investors is very critical for EN1 as its core business is also in United States. The company would be raising A$2 million in two equal issuance of convertible notes each of $1 million for the institutional investor based in New York. As agreed, each unsecured convertible note will have a duration of 12 months with a fixed conversion price of A$0.09 per share. During the highest-demand quarter the company will be using these raised capitals. The financing will be interest free. However, in case of buy back, it will be 105% of the face value. Further the company is required to issue 5 million fully paid ordinary shares through collaterals so that company meets its obligations under financing facility. Also, the company needs to redeem the notes in 12 equal installments either in the form of cash or in the form of shares.
The notes will be issued subjected to due diligence and the approval based on definitive documentation. Viriathus Capital LLC is playing the role of the placement agent to the Company.
Ted Dhanik who is the CEO of engage: BDR states that the company is able to raise the capital in the 4th quarter of the calendar year which is considered as the most critical time for the Company as it represents peak earning season of the company. The capital raised will help in driving shareholders value. The fourth quarter represents the peak earning season, and this capital will allow the group to drive revenues and ultimately drive shareholder value; while the company was also able to reduce the dilution by setting a fixed conversion price at 50% premium of the current market price of EN1 shares.
The company is giving a negative performance of -76% since its inception. The YTD performance is also showing a negative performance of -73.91%. For the half year performance of FY18, the company reported a decline in the non-programmatic revenue by 12.5% in 2018. There was an increase in the programmatic revenue by 28% which resulted in increase in total revenue of 87.5%. There was an increase in the earning before interest, tax and depreciation by 10%. There was a decrease in the operating expenditure by 11%. The net loss also got reduced by 16%.
The current market price of the share is A$0.056 (down 6.67% on November 01, 2018) with market capitalization of A$17.13 million.
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