Change Financial Limited (ASX: CCA) operates as a software development company. The Company offers fintech solutions and blockchain investment services. Change Financial provides payments and digital banking platform. Change Financial serves customers in the United States and Australia.
Today (i.e., 14 December 2019), the company announced that an extraordinary general meeting of the Company’s shareholders would be held at 11.00am on 12 February 2019 at the offices of Pitcher Partners, Level 22, MLC Centre,19 Martin Place, Sydney. In the announcement, the company also provided details of its Restructure Proposal.
The Chairman of the company Ms. Teresa Clarke said that, as the Company had commenced a strategic review of its operations on 7 September 2018 because of the challenging market conditions and funding constraints affecting the Company and its operations.
Since the time this review was declared, the company’s Board has taken numerous steps to streamline operations and develop a business strategy focused on the company’s most prospective business opportunity. Securing future funding is critical to the Company’s ongoing viability, its ability to deliver value to Shareholders through the development and commercialization of the Company’s payments processing platform.
She also stated that, after consideration of a range of alternatives, the Board of the company has resolved that the funding package announced to the market on 12 December 2018 was the most favourable to the Shareholders. The funding package comprises of the following:
• A secured loan facility with Altor Capital Management Pty Ltd as trustee for the Change Financial Investment Trust (Altor)for A$2 million (US$1.40 million) (Altor Loan) of which the Company has drawn an initial advance of A$0.5 million. The Altor Loan will be repaid, subject to Shareholder approval, by an issue of convertible notes (Notes). Altor has the right but not obligation, upon the Company’s request, to subscribe for a further A$2 million of Notes (Note Issue).
• A non-renounceable entitlement offers to Shareholders to raise up to A$1 million (US$0.70million) from existing Shareholders (Entitlement Offer). The Entitlement Offer is not underwritten (together, the Funding Package).
The Funding Package provides the Company access to funding to meet its short-term requirements pending Shareholder approval of the Note Issue. The Altor Loan is to be repaid from the proceeds of the Note Issue. If Shareholders do not approve the Note Issue, the Altor Loan is repayable 10 Business Days after the Meeting.
Shareholder approval is quintessential for the issue of Notes as they may convert into more than 15% of the Company’s issued share capital. Additional approvals are being sought to ratify the issuance of Options to Altor (or its nominees) as a facility fee for the Altor Loan and Note Issue (Altor Options). The Company recognizes the loyalty and support of its Shareholders and urges Shareholders to carefully consider the information regarding the Company and the Funding Package in the attached Explanatory Memorandum and vote on the Resolutions.
Today, the company also released a letter to the option holders notifying them about the non-renounceable pro-rata entitlement offer to raise up to approximately $1 million before associated costs of the Issue. This Entitlement Offer entitles eligible shareholders to subscribe for 1 fully paid ordinary share for every 5 shares held at 7:00pm (Sydney time) on 17 January 2019 (Record Date) at an issue price of $0.06 per share.
In the meantime, the stock price of the company has fallen by 90.17 percent in the past six months as on 10 January 2019. Company’s shares last traded at $0.059 (+1.724% intraday) & it has a market capitalization of circa $4.97 million as on 14 January 2019.