Cipherpoint Ltd (ASX:CPT) has issued more than 21.27 million shares to participants in the placement announced on January 21 raising $1 million (before costs).
This follows the company having received binding commitments to a placement of ordinary shares of $1 million at an issue price of 4.7 cents per ordinary share (21,276,596 shares), together with one free-attaching option for every four shares under the placement, with each option having an exercise price of 8 cents with an expiry of 12 months from issue.
The placement shares are being issued at an 8% discount to the 15-day VWAP of CPT’s ordinary shares.
Rights issue
In addition, CPT is planning a rights issue to raise not less than the balance of the capital required as a condition to the completion of the Brace168 acquisition (being $1 million).
The rights issue will offer eligible shareholders, including placement participants, the opportunity to subscribe for one share for every two shares held at the record date at an issue price of 4.7 cents per share to raise up to around $4 million before costs.
Use of funds
The net capital raised will be used as follows:
- Meet costs of the Brace168 transaction;
- Meet costs of integration of the Brace 168 and CPT businesses;
- Fund the expansion of the existing CPT business following the integration above;
- Fund the anticipated growth of the Brace168 business;
- Establish a second point of presence for Security Solutions in Europe co-located with CPT’s existing business in Heilbronn, Germany; and
- Group working capital.
Binding term sheet to acquire cybersecurity services platform
The company recently entered into a binding term sheet to acquire 100% of the issued capital in cybersecurity services platform Brace168 Pty Ltd for cash and shares in the company.
It is anticipated the transaction will complete by early March 2021 or shortly thereafter.
CPT plans to raise further capital of not less than $2 million under a placement and rights issue to fund the acquisition and expand its existing business, among others.
Acquisition terms
Consideration for the acquisition is a mix of cash and CPT securities - $3 million cash, 21.75 million shares and 5.4375 million options, subject to any necessary shareholder or other regulatory approvals.
The cash payment will be split over two payments, with $2 million payable on completion and $1 million 12 months post-completion.
Three key areas of focus
Following completion of the Brace 168 transaction, CPT will focus on three key areas:
- Security Solutions – the Brace168 business;
- Data Protection – CPT’s core business; and
- Data Discovery – a further growth opportunity.
Brace168 will be managed as a separate business during the performance period.