Innovative managed investments platform DomaCom Limited (ASX:DCL) is set to raise up to $6 million through the issuance of convertible notes.
With support of several of DomaCom’s primary shareholders, this initiative will commence with an initial fully underwritten raising of $2 million (Tranche 1) through the issue of 2 million convertible notes with a face value of $1.00 to wholesale investors, with a 5-year maturity date, paying an annual interest rate of 12% and a conversion price of $0.08.
Furthermore, DomaCom intends to seek subscriptions for up to an additional $4 million (Tranche 2) to be raised through the issue of 4 million convertible notes with a face value of $1.00 with the same terms as Tranche 1 to wholesale investors subject to shareholder approval.
We are pleased to announce the proposed issuance of Convertible Notes which will bolster the company’s financial standing and support the continued growth opportunities available for the innovative DomaCom product offerings,” CEO John Elkovich said.
“DomaCom has had a successful FY2023 and we eagerly anticipate building upon these achievements, carrying forward the momentum to fully realise the potential of the DomaCom platform.”
Following a robust FY2023 that witnessed a 61% increase in funds under management (FUM) to $216 million at 30 June 2023 and a 134% increase in fee revenue to $2.45 million for the year ended 30 June 2023, DomaCom plans to employ the capital raised to establish a solid financial foundation for future growth. DomaCom aspires to accelerate its growth trajectory by augmenting FUM and diversifying the asset classes offered to truly extract value of its unique platform for its shareholders.
The proceeds of the capital raise, if fully subscribed, will be allocated to repay the Existing Convertible Notes, provide working capital and fund the costs of the capital raise. In the event that only Tranche 1 is issued (raising $2 million before costs), the proceeds will be used for working capital, partially repay the Existing Convertible Notes for an amount of $500,000 and to fund the costs of the offer and the Company will need to raise additional funds in order to repay the remainder of the Existing Convertible Notes by their maturity date of 1 February 2024.
