VMob plans to raise up to $4 mln in placement, needs shareholder backing

Wednesday 13th April 2016

VMob, the mobile advertising firm that joined the NZX main board in January, plans to raise as much as $4 million in a private placement, triggering a requirement that it get shareholder ratification of previous placements to keep annual stock issuance within the threshold of listing rules.

The company plans to raise $3 million in a placement of 7.5 million shares at 40 cents apiece, with over-subscriptions of up to $1 million, the company now headquartered in San Francisco said in a statement to the NZX. The shares fell 6.2 percent to 41 cents today, and have dropped 26 percent in the past 12 months.

VMob currently has about 82.3 million shares on issue and a market capitalisation of about $34 million. Its market value rose above $40 million in January, one of the conditions of its migration to the main board from its previous NZAX listing, and the shares reached a 9-month of 53 cents on Jan. 25. Before moving across, the company completed about $5 million of capital raising via placements in three tranches in December.

It needs shareholders to ratify those placements to create "further placement headroom" because of a 20 percent threshold for issuance of ordinary shares in a 12-month period without shareholder approval.

VMob plans to use the funds raised to pay for its expansion in offshore markets, particularly the US, and to develop its technology platform, the company said. Further capital raising is expected in the second half of 2016, which may include bringing in a strategic US-based investor, it said.

The company affirmed its December guidance for annualised committed monthly revenue (ACMR) of $10 million within six-to-nine months, saying it expects to reach that target by the end of September. ACMR soared more than 1,000 percent to $4.8 million in VMob's first half, when it reported a net loss of $3.2 million.

In January, founder Scott Bradley said funds raised from the earlier $5 million placement would last the company through to mid-year with its cash burn hovering between $600,000 and $700,000 a month.

VMob’s technology platform delivers personalised, location-based promotional offers to mobile phone users on behalf of major brands to increase sales and Bradley said the bigger retail brands were based in more mature markets such as the US. Clients include McDonald’s, 7-Eleven, Ikea, Anheuser-Busch, Compass Group and Mars Drinks.

McDonald's uses VMob in the Netherlands, Sweden, Japan and the US, and is launching in South Korea, Canada, the Baltic states and Australia.

BusinessDesk.co.nz

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