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irexchange Limited (Proposed ASX Code: IRX) offers disruptive technology platform to retailers and suppliers to facilitate direct and efficient trading relationships between them. Through its proprietary B2B platform, the company aims to increase fairness, efficiency, and transparency in the retail sector by removing the costs of conventional wholesalers and providing price transparency to both retailers and suppliers. The company's management team is having significant experience in fast-moving consumer goods (FMCG), supply chain and technology capabilities.
Recently on 7 January 2019, the company lodged its prospectus with Australian Securities and Investments Commission (ASIC) which replaces the original prospectus dated 24 December 2018.
The Company is seeking to issue 19,444,444 New Shares to raise $17.5 million. Further, the Prospectus also includes an offer to issue:
- 30,683,796 Conversion Shares to be issued to Convertible Noteholders on conversion of all outstanding principal and interest owed under the Convertible Notes.
- 5,122,222 Settlement Shares to various counterparties to settle various payment obligations.
- 291,667 Options to be issued to the Lead Manager.
The proceeds from the IPO will be used to provide funding for the companyâs growth strategy and to provide access to capital markets. Further, the IPO proceeds will also improve the companyâs financial flexibility for growth.
The offer was opened on 14 January 2019, and it will close on 5 February 2019. The settlement date of the offer is 12 February 2019. The Allotment Date for Offer Securities is 19 February 2019, and the shares are expected to commence trading on ASX (on a normal settlement basis) from 25 February 2019 onwards.
The Companyâs business was started in 2015, and since then, it has spent around $20 million to fund product and technology development which has been expensed and, along with business operations, has brought the business to scale. Since December 2016, the company has grown its network to more than 600 independent retailers on the irexchange platform across Australia.
Currently, Independent supermarkets, health food, and liquor retailers are the primary customers of the company. The company is planning to expand its operations into pharmacy, petrol and convenience, and China CBEC marketplace. The company is generating revenue by charging the net product price plus a handling and freight/distribution fee plus a minimal percentage service fee.
The company currently has large multi-national, national, state and regional suppliers like Swisse, Bellamyâs, Reckitt Benckiser, LâOreal, Unilever, Kraft Heinz, Kimberly Clark, Carlton and United Breweries and ABC Tissue.
The company has divided its growth plan into three phases, the first phase includes expanding into the independent grocery, liquor, pharmacy and petrol and convenience sectors in the Australian market. The second phase includes expanding its geographical reach to all Australian states and territories. Further, the company is also planning to expand its geographical reach to other channels and territories including international B2C marketplaces and the China cross border e-commerce (CBEC) marketplace. The third phase includes expanding into other global markets where high retailer and supplier fragmentation exists. As per the companyâs proforma results for FY 2018, the company reported revenue of $13.156 million in FY 2018. Further, the company had a Loss after-tax $16.24 million in FY 2018. As at 30 June 2018, pro-forma cash and cash equivalent of $22.401 Mn with long term debt (pro-forma) of $1.54 Mn.
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