KRM22 PLC (LON:KRM) confirmed it has received a firm commitment to undertake a £1mln equity investment at 30p per share, a 27.7% premium to its closing price last Thursday, exceeding its initial fundraising target.
The software firm said it remains in dialogue with other existing and new potential investors regarding addition investment to add to the total, with a further announcement to be made once the investor roadshow and fundraising is completed around May 14.
READ: KRM22 continues discussions about potential fundraising
KRM22 said the proceeds will help strengthen its working capital facilities and accelerate growth, adding that it has also reached an agreement with its debt provider that it may draw down a further £500,000, conditional on completion of the fundraise.
The company’s executive chairman, Keith Todd, has said he will participate in the fundraiser and make a £100,000 investment in the company.
KRM22 also unveiled a brief trading update for the year ended December 31, 2019, ahead of its final results, due to be announced next week, reporting that its adjusted (EBITDA) loss had narrowed to £3.07mln from £3.32mln in 2018 while revenues climbed to £4.1mln from £1.29mln.
The company also reported that its annual contracted recurring revenues had risen to £4.3mln from 3.3mln in the prior year and that it is in “advanced stages of negotiation with regards to a number of multi-year contracts”.
KRM22 added that despite the disruption caused by the coronavirus pandemic, it still expects to be adjusted EBITDA positive by the end of 2020.
In a note, analysts at house broker finnCap retained their 75p target price on KRM22, saying the company’s fundraising and additional debt facility provided a “reassuring headroom” that they did not expect to be required by the firm.
The company’s shares surged 23.4% to 29p in early deals on Monday.