DUG Technology (ASX:DUG) to raise up to $20m for business growth

• DUG Technology (DUG) is looking to raise up to $20 million through a placement and share purchase plan
• The company is raising $15 million through a two-tranche placement to sophisticated and institutional investors at an issue price of 90 cents
• The tech stock hopes to raise another $5 million through a share purchase plan which will be open from September 10 until October 13
• DUG plans to use the money for business development, building a global sales team, computer equipment, as well as working capital and debt reduction
• Company shares are down 5.83 per cent in the red to trade at 97 cents

DUG Technology (DUG) has received binding commitments to raise up to $15 million through a placement.

The tech stock will issue around 16.7 million shares to new and existing sophisticated and institutional investors at 90 cents per share. The issue price represents a 12.6 per cent discount to the last closing price of September 2.

The placement will be completed over two tranches with the first to issue 14.9 million shares. The second tranche will issue 1.8 million shares but is subject to shareholder approval.

DUG’s directors have subscribed for 444,445 new shares which represents around $400,000.

Managing Director Dr Matthew Lamont commented on the placement.

“This is an important step in DUG’s journey. Our software business line has had a great year growing significantly,” he said.

“It has been a difficult year in services due to COVID-related uncertainty and delays in project awards, and while performance has not been satisfactory, green shoots abound moving forwards. DUG is in a great position to capitalise on growth opportunities during FY22.”

DUG Technology specialises in analytical software development and reliable, green, high-performance computing (HPC). It delivers software products and cost-effective, cloud-based HPC as a service to clients in various sectors such as radio-astronomy, biomedicine, meteorology, resource, government and education.

In addition, DUG will launch a share purchase plan (SPP) to raise up to a further $5 million. Eligible shareholders will be able to subscribe for up to $30,000 worth of shares at the same price as the placement.

The SPP will be open from September 10 until October 13.

DUG plans to use the funds from the placement and SPP for business development, renewable initiatives, building a structured sales-oriented global team, computer equipment, and working capital and debt reduction.

Company shares were down 5.83 per cent in the red to trade at 97 cents at 3:38 pm AEST.