Identitii Limited (ASX:ID8) has announced a significant financing agreement, securing a Convertible Note Facility of up to $20 million with The Blackstone Mercantile Group Ltd. SAC. The company, which builds solutions that make financial data more secure, intelligent, and easier to utilise to help organisations prevent financial crime, has a binding commitment for an initial $5 million (before costs), contingent upon shareholder approval. This facility is designed to provide substantial capital for the company’s growth initiatives and general working capital.
The initial $5 million commitment requires a forthcoming shareholder meeting to approve several resolutions. These include a 200-for-1 consolidation of the company’s securities, the issue of convertible notes to the Investor under ASX Listing Rule 7.1, and the issue of 92 free Bonus Options for every 100 shares held by existing shareholders. These Bonus Options, along with Piggyback Options, are intended to partially offset the dilution shareholders may experience from the conversion of the notes. Upon approval, an initial $0.5 million advance will be provided, followed by the remaining $4.5 million, with $1.5 million allocated to Fairfax Partners Inc. for global marketing and investor relations, specifically for the BNDRY product.
Following the initial commitment, Identitii will retain $3.5 million in net proceeds, with the remaining $15 million in funding accessible under various conditions and approvals after a six-month exclusive funding period. The conversion of the initial $5 million commitment is expected to occur at $0.375 per share, a price anticipated to be a discount to the post-consolidation share price. Identitii’s CEO, John Rayment, expressed optimism, stating the funding could be the last time the company needs to raise ordinary working capital, allowing a focus on BNDRY growth and achieving cashflow breakeven by the end of next year. The Board evaluated alternative funding sources, concluding this facility offered superior terms and a mechanism to mitigate dilution compared to traditional placements or floating-rate convertible notes.
