Engage:BDR clinches growth capital after revising funding terms

Engage BDR ASX EN1 growth capital revised funding terms CST Investment fund
Engage:BDR has secured additional growth capital of up to US$5.875 million.

Engage:BDR (ASX: EN1) has secured additional growth capital to the tune of $8.2 million after amending a convertible Securities Agreement with CST Investment Fund.

Under the revised terms, the ad company will secure immediate funding of about $1 million before costs.

In addition to general working capital, engage:BDR said the funding would provide opportunity to immediately increase its revenue through additional publisher payments for incremental revenue growth.

The improved note agreement will see the company issue 800,000 loan notes to CST Investment Fund. The loan notes are purely debt instruments and have a 90-day maturity date.

The amended terms also mean there will be no options issued on the second and subsequent tranches, a significant improvement to the previously agreed terms.

The secured notes have an issue price of US$0.90 per note and a face value of US$1.00 per note.

The next step for engage:BDR will be to seek shareholder approval to issue the convertible notes in replacement of the loan notes.

The 800,000 loan notes are in addition to the loan notes issued in November last year, with a replacement to convertible notes being approved at a general meeting yesterday.

Engage:BDR will still issue the balance of 1.9 million collateral shares, as previously agreed.

Funding boost to underpin momentum

Amending the terms of the note agreement comes in the wake of a recent $702,000 capital raising via a placement to professional and sophisticated investors.

At the same time, company chief executive officer Ted Dhanik increased his holdings in the company by 1.7 million shares, growing his overall holdings to 57.7 million shares – 19.99% of the total company share register.

The funding strategies bolster the company’s capital position as it seeks to expand within the programmatic advertising industry – an evolving online niche that strives to improve delivery of media distribution, ad-buying and brand marketing on a global scale.

Engage:BDR has already had a strong start to 2019 via a series of new integrations that are projected to extend the capability of its programmatic ad platform.

Since inception, engage:BDR integrated over 160 digital ad companies into its own ecosystem (with around 80 added in 2018 alone) including the likes of Decibel, Instreamatic and Sonobi.

Engage:BDR expects to achieve top-line revenue of approximately $12-$13 million for the 2018 financial year.