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- DataDot Technology (DDT) will raise nearly $2 million through a placement and non-renounceable rights issue
- The funds will help the company to strengthen its balance sheet and pay back $1.15 million of convertible note debt
- The company has also decided to accelerate cost-cutting measures already taken prior to COVID-19
- These include relocating to smaller office spaces, closing down its U.S. factory and renegotiating expenditure items
- DataDot is a global supplier of data protection solutions
- Company shares are 25 per cent in the green and trading for 0.5 cents
DataDot Technology (DDT) has announced cost-cutting measures and a $1.9 million equity raise through a placement and a non-renounceable rights issue.
DataDot is providing customers with leading asset identification, management, protection and authentication solutions.
It seems the company is desperately trying to fortify its finances and strengthen its balance sheet in response to COVID-19.
DataDot will raise roughly $785,000 through a placement to sophisticated investors. The rights issue component totals roughly $1.07 million.
The placement and rights issue will be both be priced $0.004 per share. If there is an undersubscription of the rights issue, those shareholders who subscribed for their full entitlement will be offered to subscribe for additional shares up to the amount of the shortfall.
“The global COVID-19 pandemic has significantly interrupted restructure and development activities and created an environment of uncertainty,” Chairman Ray Carroll said.
“It is appropriate to take pre-emptive action with the capital raising and further accelerate cost-cutting measures whilst maintaining business continuity to ensure we are well-positioned to bounce back quickly when more normal operating conditions return,” Ray added.
A large portion of the money raised will go to paying back convertible notes and unsecured debt of $1.15 million.
Significant cost-cutting initiatives that Datdot has implemented include; closing its factory and office in the U.S. and relocating to Sydney, relocating its Australian factory and global head office in Sydney to a smaller location in Brookvale, rationalising and renegotiating significant cost items such as adhesives, film and other production materials, audit accounting and tax fees, registry fees, freight costs etc.
These measures were undertaken before COVID-19 however the outbreak caused the company to accelerate and prioritise these even further.
Company shares are 25 per cent in the green and trading for 0.5 cents each as at 10:49 am AEST.
