Network solutions company, iWebGate (ASX:IWG), has entered into an agreement with an entity managed by The Lind Partners, for a total funding commitment of up to $US8.575 million. The Lind Partners is a New York-based asset management company.
As per the agreement, this funding will provide iWebGate with funds through a flexible convertible instrument, and the ability to secure additional funding in stages.
In addition, the structure of the investment allows the company to issue shares at prices that are linked to prices prevailing at the time, potentially at premiums to the present share price, minimising dilution for existing shareholders while meeting interim financing needs as it develops its milestones.
On a statement on the ASX, the company said it will receive $US1.675 million upon execution of this agreement. The equity funding facility has a term of 24 months and will be funded monthly in the amount of $US75,000 per month and upon mutual consent of both companies, may increase the amount to $US300,000 per month.
A total of 8.5 million unlisted options exercisable for 36 months has also been granted to the investor, with an exercise price equal to 120 per cent of the average of the daily VWAPs during the 20 trading days before the date of execution of the agreement.
The company will also issue 10 million shares to the investor, which will be credited or returned to the company once it has met all of its obligations.
iWebGate executive chairman, James Tsiolis, said it is encouraging to have received strong and continued support from an existing investor through this financing.
“Securing this funding substantially assists the company to accelerate its growth strategy across its core geographic markets to access further government, enterprise, and small business customers.
“The team at Lind has a long history of successful investments in technology, including participation in an early debt financing for Datapipe, angel round investments in Kickstarter and Axioma, and more recently in Australia with its investments in Freelancers’ IPO, Digital 4ge, Reffind, and Visual Amplifiers,” he said.