engage:BDR (ASX:EN1) - CEO, Ted Dhanik
CEO, Ted Dhanik
Source: TechInvest Magazine
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  • Digital advertiser engage:BDR (EN1) will pocket roughly $675,000 from the U.S. coronavirus relief program
  • The funding will come from the $2.2 trillion CARES Act in the States
  • Specifically, the funds will come from the Paycheck Protection Program so EN1 can keep its workers on the payroll
  • EN1 has also lodged a business interruption insurance claim and is seeking an $8 million loan from an Aussie bank
  • This all comes despite EN1 claiming company operations have not been affected whatsoever by the current economic climate
  • Shares in the company have fallen 12.5 per cent today, currently worth 1.4 cents each

Digital advertising specialist engage:BDR (EN1) is nabbing roughly $675,000 from the U.S. coronavirus relief program.

The company told shareholders today it has received approval from the U.S. Small Business Administration (SBA) for the funding.

The cash will come from the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the States, and specifically from the Paycheck Protection Program (PPP) so the company can keep paying its workers.

The funds are entirely forgivable, meaning engage:BDR won’t have to pay anything back.

On top of the CARES funds, EN1 is chasing an $8 million term loan from an Australian bank and has applied for U.S. SBA disaster relief funding.

Further, EN1 has filed a business interruption claim with its business income insurance policy.

While extra cash is certainly never a bad thing, today’s announcement — which lacks the glitz and glamour that normally comes from EN1 — might be leaving investors with a sour taste in their mouths.

Missing confidence

While engage:BDR’s announcements and financial reports have typically made no direct mention of COVID-19, the company has been touting its extreme revenue growth and ability to work remotely.

In mid-March, the company said its “worth from home strategy” went ahead with zero impact to company operations. In fact, EN1 went as far as to say its business had suffered no cancellations, interruptions, throttling, or negative outcomes throughout the whole of 2020.

Two days later, EN1 said it exceeded 2019’s March revenue in just 12 days.

engage:BDR later shared five new large scale programmatic partnerships and a publishing deal, which were immediately live and expected to bring about a significant revenue boost.

This, of course, all begs the question: if the business is tracking along so smoothly, why the need for all the extra funding?

Moreover, if there have been zero negative impacts on company operations from the current economic climate, why is EN1 eligible for the $675 million from the CARES Act, and why would the company qualify for a business interruption insurance claim?

It seems investors are staying sceptical for now, with news of the extra funds still not able to push the EN1 share price higher. Since its listing in 2017, engage:BDR shares have now lost over 94 per cent of their value.

Given EN1 still posted a $2.1 million loss over 2019 despite the hefty revenue growth, perhaps investors plan to wait until the company is profitable before placing any major buy orders.

Today, EN1 shares have reflected the wider market and fallen 12.5 per cent. Currently, shares are trading for 1.4 cents each in an $11.31 million market cap.

EN1 by the numbers
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