Dotz Nano Limited (ASX: DTZ) on 9 September 2018 announced that for its 2019 commercial agreements, it was successful in raising $0.8 million through the convertible loans through the Sophisticated Asian Based Investor and the founding shareholders.
The loan amount will get converted into fully paid ordinary shares of DTZ once it gets approval from the shareholders in the shareholder meeting in February 2019. The new shares against the converting loan will be of equal rank to those shares on issue.
The key terms of the convertible loan agreement highlight the facility limit of A$1,000,000 for working capital requirements and the capital expenditure. The execution date of the agreement was 7 January 2019. Based on the decision in the shareholder’s meeting by 28 February 2019, the lender will be transferring the outstanding balance to the borrower. Each share against the loan amount will cost A$0.08. Also, the lender will be eligible for four unlisted options against one share with an exercising price of A$0.12 per share and the expiration date of 30 June 2020.
The borrower needs to pay the simple interest of 8% per annum on the advance amount. Once the shareholders give their approval, the accrued interest amount will get converted into shares and options.
In case, the shareholders do not approve, then DTZ who is the borrower need to repay the accrued interest to the advance payment to the lender on the termination date. The borrower also needs to pay the outstanding money to the lender.
The official listing of DTZ on ASX is 13 December 2007 where the performance of the company remains negative till last six months. In the previous three months, the performance of the company was 9.33%.
For the half-year period which ended on 30 June 2018, DTZ made a net loss of US$3,221,988. The balance sheet of DTZ looks healthy with a net asset base of US$1,096,073 and a debt to equity ratio of 0.374 which indicates that the company is capable of meeting long-term obligations. Debt to equity ratio being lower suggests that the company used its internal resources for any financial requirement. However, there was an increase in the accumulated losses during the period as compared to the prior corresponding period which highlights a weak operating performance during the period.
The support from founding shareholders and Asian-based sophisticated investor shows that they have confidence in the Dotz’s patented technology in Oil & Gas, Anticounterfeiting and Product Liability sectors. They believe that its Dotz’s proprietary technology will have a global demand in the near future.
Although the company was able to raise $0.8 million, still everything depends on the shareholders' approval in the shareholder’s meeting in February 2019. By the end of the trading on 9 January 2019, the closing price of the share was A$0.08 with the market capitalization of ~$14.82 million.
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