DomaCom Australia Ltd (ASX:DCL) has extended the maturity date of its convertible notes, valued at $2.95 million, to July 1, 2022, and changed the conversion price from 0.10 to 0.06551.
This comes after DCL received confirmation from noteholders that two technical default events - on August 21, 2020, and May 11, 2021, as a result of voluntary suspensions - have been waived subject to the conditions precedent.
An extension fee of $325,000 (excluding GST) has been paid and the interest rate of 15% pa, payment terms and security arrangements remain unchanged.
“Significant outcome”
DomaCom CEO Arthur Naoumidis said: “It is pleasing that we have been able to secure an extension to our convertible notes.
“This is a significant outcome for us as it reduces our capital requirements by $2.95 million less the extension fee payable of $325,000 and additional interest for a period of six months of approximately $221,000.
“We continue to value the support of all of our noteholders and will work together closely towards the ongoing success of the company.”
Convertible note details
DCL issued $2.95 million of secured convertible notes on December 7, 2018. These notes were subsequently amended in May 2020 to include a revised maturity date and conversion price.
The Convertible Note Deed contains a number of events of default that, if triggered, allow the noteholders to elect to require (within two business days) the conversion of all or any number of the notes and/or repayment of all or any portion of the notes (with accrued interest) and/or to continue to hold all or a portion of the notes.
One of the default events occurs if the company is suspended from the ASX for more than five consecutive trading days.
As a result of the voluntary suspension announced on May 11, 2021, the company has been suspended for more than five days and has caused there to be a technical event of default.
Similarly, due to the voluntary suspension announced on August 21, 2020, the company was suspended for more than five days which caused there to be an additional default event.
DomaCom has received confirmation from the noteholders that the two technical default events will be waived subject to the conditions precedent.
In addition, the noteholders have agreed to extend the maturity date of the notes to July 1, 2022. The conversion price of the notes will be amended from $0.10 to $0.06551.
An extension fee of $325,000 (excluding GST) has been paid. The interest rate of 15% pa, payment terms and security arrangements remain unchanged.
The amended terms will use most of DomaCom’s capacity to raise capital under ASX Listing Rule 7.1 without shareholder approval.
About DomaCom
DomaCom's fractional investment platform provides solutions for SMSF’s, retirees and new home buyers.
Using the DomaCom platform, investors can make fractional investments in a range of asset classes including property-related investments, mortgage-backed securities, renewables, affordable housing, disability accommodation and debt securities via a unique trust structure tailored to them.
Retirees can sell a fraction of their house to investors, possible family members, to help them improve their retirement income.
DomaCom runs a crowdfunding campaign process in which investors can commit as much as they want towards the purchase of assets together with other like-minded investors.
When a campaign is complete, DomaCom purchases the asset, places it in a sub-fund and issues the investors with units in proportion to the amount they invested.