Cipherpoint Ltd (ASX:CPT) has received binding commitments for a placement of 19 million shares at 2.3 cents per share to raise an additional $437,000 following a heavily oversubscribed share purchase plan (SPP).
This placement is being held in response to the oversubscription and interest received from other sophisticated investors seeking an opportunity to invest in the company.
The price of 2.3 cents per share is a discount of approximately 20% from the 15-day VWAP of 2.834 cents for the 15 days on which trades were recorded to July 2, 2020.
It represents a premium of 1 cent, or a 77% premium, to the SPP price.
The placement will be conducted under the company’s existing placement capacity under ASX Listing Rule 7.1 and ASX Listing Rule 7.1A with the company to shortly release an Appendix 3B.
On June 30, 2020, the company closed its $500,000 share purchase plan (SPP) well oversubscribed following strong support from existing shareholders.
Acceptances totalling $1,264,500 were received - more than two times the maximum subscription of $500,000.
Due to the over-subscriptions, applications are being scaled back on a pro-rata basis according to the number of SPP shares applied for.
As a result, each accepting shareholder will receive approximately 40% of their SPP application amount, with the balance of application funds to be returned to them.
CPT's board believes that the placement will deliver value to existing shareholders, particularly those who participated in the SPP, and will provide the company with additional capital to allow it to accelerate its cloud development and the integration of its products with the major collaboration platforms in the market, including Microsoft Teams.
The current pandemic has increased the focus on remote working, collaboration, and digital transformation and, in turn, the need for more vigilance around data access and security.