Family Zone Cyber Safety to raise $5.5 million via a share placement

Family Zone Cyber Safety Limited (ASX: FZO) is an ASX listed information technology company. It is specialised in cybersecurity. The company is trying to capture the market with increasing demand to keep the kids safe online and to manage digital lifestyles. The Family Zone box helps to protect all the connected devices in the home whereas the Family Zone application protects the device outside the home.

Share placement Details

On 18th April 2019, the company released information regarding the commitments to raise capital up to $5.5 million (before cost) through a share placement. Under the placement, a total of 35,483,872 new shares will be issued to institutional and sophisticated investors at the issue price of $0.155 per share. The investors also include prominent existing and new Australian and Asian-based fund managers. The lead manager for the placement is Blue Ocean Equities.

Out of the total 35,483,872 new shares, 23,651,594 Shares will be issued under Listing Rule 7.1, and the remaining 11,832,278 is to be issued under Listing Rule 7.1A capacity. The issue price of $0.155 represents a 22.5% discount to the last traded price (as of 17th April 2019) and a 23.6% discount to the 15-day volume-weighted average price.

Use of funds

The net proceeds from the share placement will primarily be used towards driving the business scalability and accelerate growth. It will be directed towards business development, inventory and working capital to aid sustained growth in active users and to progress towards the company’s target to become cashflow break-even early in CY 2020.

Director’s Statement

Tim Levy, Managing Director of Family Zone, stated the capital raising would ensure solid position of the company to pursue opportunities and to pursue growth in the exciting USA market. The funds are expected to improve the balance sheet of the company. He has also given an outlook on top line revenues to be at the high end of $8 million to $9 million in FY19.

Other securities approved for the issue at AGM

At the annual general meeting (AGM) of the company, held on 17th April 2019, the following securities have been approved by the shareholders for the issue:

  • 309,889 Shares have been issued in accordance with to the Fidelio Agency Agreement.
  • 577,778 Shares have been issued to Non-executive Directors and 1,191,111 Class G Performance Rights issued to Executive Directors in lieu of cash salaries for the 2019 calendar year.

Trading Halt

On 16th April 2019, Family Zone had requested Australian Securities Exchange (ASX) to halt the trading in the company’s securities due to a pending announcement about capital raising. The normal trading of shares has commenced from today’s session as the announcement is released to the market.

Stock performance

The current market capitalisation of the company is A$32.79 million. The 52-week high and low of the stock is A$0.57 and A$0.14 respectively. The stock fell by a massive 17.5% and closed at A$0.165 as of 18th April 2019 . In the last six months, the stock has delivered a negative return of 47.3%, and YTD return stands at negative 13%.


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