Linius (ASX: LNU) says the placement includes an approximately $250,000 investment from Linius directors, subject to shareholder approval, which will be sought at a general meeting of shareholders to be held as soon as practicable.
The company also said the placement will result in the issue of 154,545,450 fully paid ordinary shares at $0.011 per share to raise $1.7 million - before costs - and will be conducted within the its existing Listing Rules 7.1 placement capacity for 131,818,180 shares and pursuant to LR 10.11 for 22,727,270 shares in respect of share subscribed for by directors.
Linius says the issue price represents a discount of 20% to the 30-day VWAP.
The company said it will use the proceeds of the placement to drive revenue growth, with specific focuson converting existing clients and near-term opportunities to immediate and sustainable revenues.
“In the current economic and social conditions, the recent LiveTiles win is an important factor. Video conferencing has become a critical requirement, enabling working from home and Business Continuity Planning (BCP) strategies,” LInius said.
“Assisting LiveTiles in selling their Intelligent Meeting Solution, of which Linius is the backbone OEM provider, represents a significant opportunity for Linius, as does the broader video conferencing industry.
“The company believes it has the technology suite in place, with the IP protected by granted patents, to deliver recurring revenue growth. At the same time as the company is focussed on execution of its go to market strategy, it has continued to reduce monthly expenditure.”
Liniu said the funds provide it with “additional runway” to execute on its strategy, with the placement (excluding director participation) scheduled to settle on 4 May 2020.
Blue Ocean Equities Pty Limited acted as lead manager for the placement.