Cycliq Group Successfully Secured $2 Million Debt Facility From PFG

Cycliq Group Ltd (ASX: CYQ), a company from the consumer durables & apparel industry group is engaged into the designing and manufacturing of high definition camera/light combination accessories for cyclists.

It has announced that it was able to secure $2 million in the form of debt facility from Silicon Valley-based firm, Partners for growth (PFG). The funds will be used for completing the final phase of the Company’s recapitalization.

PFG is an investment firm headquartered in Silicon Valley which is engaged in providing growth capital and debt funding solutions to fast-growing technology companies in Australia and across the world.

The increased working capital would be used to augment the production for significant standing orders that were planned with the retail partners. Further, the funds would provide support in the expansion in the US cycle market by achieving manufacturing scale of efficiencies and in the commercialization of the new complementary product offerings of the company.

Also, the debt facility is consistent with the material terms as per the update on 16 November 2018, where the company entered into a binding term sheet with PFG. While executing the debt facility, the company will be terminating its existing $1.5 million debt facility by making a repayment of $510,000 drawn down to date in full, from The Toad Group. The company also highlighted that the interest that was accrued over the life of the shareholder loan was worth $69,000 will be converted into 9,832,429 ordinary shares of the company at $0.007 per share which depends on the shareholders’ approval. These funds would provide support during the cash flow requirements of Cycliq Group.  The terms would remain the same as that of recent equity raisings of the company.

Chris Singleton, the chairperson of Cycliq, stated that the debt facility was a milestone step for the company.

During the 1H FY2019, there was an increase in the company’s revenue by 57% to $3.04 million on the prior corresponding period (pcp). During the Q2, the company reported an increase in the revenue by 47% to $1.59 million on pcp. However, by the end of 1H FY2019, the company made a net loss of $1.4 million which was $1.7 million in 1H FY2018. More than 1,000 units were sold in 2018. As a result, there was an increase in cyber weekend sales by 362% on pcp.

Consecutive quarterly sales and revenue records drove the performance during the period. Further, the company during the period had initiated the process of recapitalization. The company had also entered the final discussion with the partners for $2 million debt facility after the completion of the $1.1M equity share placement in November 2018.

CYQ has generated a negative YTD return of 65.22%. The shares are trading flat at A$0.004 (As at 1:25 PM AEST, 1 March 2019).The company has a market capitalization of A$3.81 million and approximately 953.51 million outstanding shares.

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