- Cybersecurity company Family Zone (FZO) is planning to raise up to $22 million through a placement and share purchase plan
- While it has received firm commitments for the $20 million placement, how much it will raise under the share purchase plan isn't yet known
- More than 45.4 million shares will be issued to investors at 44 cents — a 4.3 per cent discount to the last closing price on October 21
- Over the June and September quarters, Family Zone achieved record sales and ongoing growth
- But it claims the extra funding will support its growth strategy and expansion into new markets
- Company shares are trading 1.09 per cent lower for 45.5 cents
Family Zone (FZO) has received firm commitments for a $20 million placement.
The cybersecurity company entered a trading halt yesterday regarding the capital raise and stated shareholders would need to wait until Monday, October 26 to find out more.
Family Zone will issue 45,454,545 fully paid ordinary shares to institutional, professional and sophisticated investors at an issue price of 44 cents.
The issue price represents a 4.3 per cent discount to the last closing price of 46 cents on October 21 and an 8.8 per cent discount to the 15-day volume-weighted average price.
FZO had a healthy $8.7 million in cash at the end of the September quarter, however, the placement is set to support accelerated growth.
Over the June and September quarters, the company achieved a significant amount of growth. In the June quarter, FZO reported a fivefold year-on-year (YoY) increase in contract sales.
Just over 80 per cent of schools and just under 60 per cent of students joined on a contract basis - leading to the 500 per cent YoY annual contract sales boost to $2 million.
Family Zone offers a cyber safety solution for families and schools to promote and create a safe online space as well as to monitor internet usage.
Despite record sales and collections, the tech stock seems to want an extra cash boost to fund acceleration of its growth strategy and potentially expand into new markets.
Funds will also be allocated to expanding FZO's engineering teams, back office systems, structures and staff.
In addition to the $20 million placement, the company is launching a share purchase plan offer to eligible shareholders to raise another $2 million.
Each shareholder may buy up to $30,000 worth of new shares at the same price as the placement.
Following the placement, FZO will have over $28 million in cash reserves, which will allow it to invest in the growth of its business.
Company shares are trading 1.09 per cent lower for 45.5 cents at 2:05 pm AEDT.