Pushpay Holdings, the NZAX-listed mobile payment app developer, is looking to raise $13.8 million from its New Zealand-based shareholders via a discounted share offer.
The pro-rata non-renounceable entitlement offer will see eligible shareholders offered 1 new ordinary share for every 14 shares already held, at a 15 percent discount of $3.85 per share, the Auckland-based company said in a statement. Pushpay shares last traded on the NZAX at $4.55.
Pushpay will use the cash to research and develop new products and accelerate sales growth in the US, it said. Last year the mobile payment app developer moved its executive, sales and marketing teams to the US, where it's targeting the faith and philanthropic sectors for growth. The company also flagged it is in talks with a number of US-based venture capital firms for additional funding, which it said it didn't expect to exceed $10 million.
After the May 28 closing date of the share offer, the proceeds may also be used to repay any outstanding debt to cornerstone shareholder, Christopher & Banks Private Equity V, an investment vehicle for the Huljich family, which loaned the company $4 million last month. That debt facility runs until June next year.
Substantial shareholders, including the Huljichs and the Bhatnagar family, which in aggregate hold about 35 percent of the company, will take up the share offer, while "a number of investors, including interests associated with Pushpay director Graham Shaw" will underwrite the offer, PushPay said.
Pushpay has also snagged a R&D Project Grant from government-run Callaghan Innovation. The grant allows for the co-funding by Callaghan Innovation of 40 percent of approved R&D spending by Pushpay, with a total possible allocation of $960,000 over an 18-month period, the company said.
It intends to migrate to the main board of the NZX market, ahead of the wind down of the alternative market. Stock market operator NZX is planning to launch the NXT market, which will target small-to-medium sized businesses to replace the alternative index.
In November, Pushpay said it widened its loss to $2.7 million in the six months ended Sept. 30, from $568,000 in the same period a year earlier. Sales climbed to $1.6 million from $90,000, while operating expenses rose to $4.5 million, from $661,000.
Pushpay listed on the small-cap market last August at $1 per share in a compliance listing, meaning it raised no funds from the float. In June, Pushpay raised $9 million in new equity among private investors, issuing shares at $1 each and valuing the company at $50 million. The capital raise was underwritten by Christopher & Banks.