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- Eden Innovations (EDE) has announced its recent capital raise, done via a share placement plan (SPP), was well supported and raised $4.24 million
- The company has also completed negotiations for a $7.2 million backstop financing facility to give Eden more working capital
- Eden believes it has enough funds to remain in business until the first quarter of 2021
- However, coupled with a $3 million drawdown on the backstop, it would have enough working capital to continue until the fourth quarter of 2021
- Eden will also apply for U.S. Government funding via its U.S. company to further bolster its balance sheet
- Shares in Eden Innovations are trading down 3.57 per cent for 2.7 cents per share
Eden Innovations (EDE) is firming up its balance sheet during the coronavirus pandemic, with a capital raise, backstop and funding application all announced.
The company today revealed it had netted $4.24 million in working capital after successfully closing its recent share purchase plan.
Eden has also completed negotiations for a $7.2 million backstop financing facility, that was previously foreshadowed.
The backstop will be finalised in the next few weeks, pending any objections from the ASX or shareholders, and will give Eden even more working capital.
The company said without the backstop, it would only have enough capital to continue operating the business until the first quarter of 2021.
However, if it draws $3 million from the available $7.2 million, it would have enough working capital to keep going until the end of 2021.
Eden also warned COVID-19 was still liable to affect the company’s sales growth and wider balance sheet.
In a bid to ward off the economic uncertainty related to the pandemic, the company intends to apply for funding under the U.S. Federal Reserve Main Street Lending Program.
The program was only just established and offers financial relief to eligible small and mid-sized U.S. businesses that are impacted by COVID-19.
Eden will apply for help via its U.S. business, and if the application is successful, the company is unlikely to need to draw funds from the backstop.
Following today’s funding news, shares in Eden Innovations closed slightly down today, July 28, at 2.7 cents per share.
