D13 Secured A Line Of Credit Of Up To $10 Million

Drone technology developer, Department 13 International Limited (ASX:D13) has secured a Line of Credit of up to $10 million. Through this fund, the company will be able to fund its on-going operations for the foreseeable future. The funds from this facility will provide the necessary capital to the company to further commercialize and leverage its existing IP, software, and products.

The Facility has been structured as a rolling facility which will allow the company to draw down and repay the money without penalties at any time. Moreover, interest is only payable on drawn funds and all fees are only payable at Maturity.Â

Domazet FT3 Pty Ltd which is a part of Doma Group has provided this facility. Domazet FT3 Pty Ltd has a large, diversified investment and funding portfolio which include substantial hotel and commercial property holdings. Domazet is having a track record of investment in the Company, including as a substantial investor in the Company’s existing convertible notes issued in 2018.

The total Facility is in three tranches of $2 million, $3 million and $5 million respectively. From Tranche 1, the lender has advanced $600,000 that will be treated as Tranche 1 advances. The Tranche 2 of $3 million is Subject to the shareholders’ approval. The tranche 3 of $3 million is subject to a minimum operational hurdle of booking contracted sales or licensing fees of at least $5 million after the first Tranche 2 draw down.

In the past six months, the Company has been working to expand its product offerings and revenue streams to position itself for long-term success. At the November Annual General Meeting, the Company detailed its strategy to shareholders which involve selling MESMER™ as a hardware and software solution.

At the AGM, the company also informed about

• The licensing of Intellectual Property across multiple products.
• Selling MESMER™ as a software solution.
• Extending MESMER™’s capabilities.
• Improving patent protection, particularly within communication networking and telecommunication networking.

With the Facility in place, the Company is confident that it will secure further sales in this year. The company has informed that there has been a substantial increase in inbound enquiries as a result of the Gatwick, Heathrow and Newark airport closures not only from Airport Operators globally but also from other industries covering border security, mobile VIP protection, critical infrastructure, and public venue safety.

The company is engaging with other C-UAS providers who are interested in licensing certain patents and technologies in the D13 portfolio. The company is going to reconstitute its Board, and it will appoint two new Australian Directors shortly. Further, the Company is planning to replace Mr. Steve Shattil and Dr. Kathleen Kiernan who have tendered their resignation, effective no later than February 25, 2019.

In Q2 FY 2019, the company recorded A$0.26m in cash receipts which were mainly from annual licensing fees and deposits on new orders. For the December quarter, the company reported Net cash used in operating activities of A$1,715k. At the end of December quarter, the company had cash and cash equivalent of A$100k.

D13’s shares are currently suspended at ASX and they were last traded at A$0.041 as on 20 November 2018.

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