VMob plans to raise up to $4 million

Listed mobile advertising company VMob [NZAX: VML] plans to raise as much as $4 million in a private placement, triggering a requirement that it get shareholder ratification of previous placements to keep annual stock issuance within the threshold of listing rules.

The company plans to raise $3 million in a placement of 7.5 million shares at 40c apiece, with over-subscriptions of up to $1 million, the company now headquartered in San Francisco says.

The shares fell 6.2% to 41c today and have dropped 26% in the past 12 months.

VMob  has about 82.3 million shares on issue and a market capitalisation of about $34 million.

Its market value rose above $40 million in January, one of the conditions of its migration to the main board from its previous NZAX listing, and the shares reached a 9-month high of 53c. Before moving to the main board, the company completed about $5 million of capital raising in December via placements in three tranches.

It needs shareholders to ratify those placements to create "further placement headroom" because of a 20% threshold for issuance of ordinary shares in a 12-month period without shareholder approval.

VMob plans to use the funds raised to pay for its expansion in offshore markets, particularly the US, and to develop its technology platform. Further capital raising is expected in the second half of 2016, which may include bringing in a strategic US-based investor, it says.

The company affirmed its December guidance for annualised committed monthly revenue (ACMR) of $10 million within six-to-nine months, saying it expects to reach that target by the end of September. ACMR soared more than 1000% to $4.8 million in VMob's first half, when it reported a net loss of $3.2 million.

In January, founder Scott Bradley said funds raised from the earlier $5 million placement would last the company through to mid-year with its cash burn hovering between $600,000 and $700,000 a month.

VMob's technology platform delivers personalised, location-based promotional offers to mobile phone users on behalf of major brands to increase sales and Mr Bradley said the bigger retail brands were based in more mature markets such as the US. Clients include McDonald's, 7-Eleven, Ikea, Anheuser-Busch, Compass Group and Mars Drinks.

McDonald's uses VMob in the Netherlands, Sweden, Japan and the US, and is launching in South Korea, Canada, the Baltic states and Australia.

(BusinessDesk)

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