Having enough cash for just one or two quarters isn't all that reassuring. What are people's another capital raising?
I understand there is the loan facility with Catcha Group, but this facility is really expensive and comes with so many strings attached, it's scary. Firstly, the facility has been extended to June 2021, but this doesn't leave a lot of room.
There are a range of restrictions, but the last dot point in particularly is really scary. If ICQ has to rely on this facility, Catcha could close off the facility with just three days notice - potentially putting ICQ into administration, which will leave Catcha Group in prime position to take over ownership for probably nothing.
• An interest rate of 12% per annum.
• A maturity date of 3 years.
• A commitment fee of 3% on the $5.0 million loan amount, payable upon commencement and a commitment fee of 2% per annum on the undrawn balance of the loan, which starts accruing once the Company draws on the loan.
• Draw down subject to shareholder approval (obtained at the Company's 2018 annual general meeting) of the issue of unlisted options over shares to be granted to Catcha Group Pte Ltd and other terms in the Agreement. These include, among others, the following salient terms:
- Drawdown is capped at $1m in any one calendar month unless this limit is amended by mutual agreement.
- No event of default has occurred prior to each drawdown.
- Cash balance of the Group is less than $1m at the date of each drawdown request.
- In the event that cash on hand at the end of the two consecutive quarters is below 75% of the Board approved budgeted cash then any amounts drawn down are repayable immediately, along with any interest and other facility fees payable.
• Customary financial and operational undertakings by the Company, including relating to reporting and maintenance of assets.
• Catcha Group Pte Ltd may cancel any of the undrawn commitment by giving the Group at least 3 business days notice.
I have watched a number of presentations and videos, from the company with a focus on the launch of their iCar suite, but I can't help but get the sense they have not had sufficient capital to develop this. I think the company's future is highly dependent on this and in the absence of a new capital injection, if the iCar suite flops and fails to bring in additional revenue, we could be looking at Catcha Group taking over.
I've been in an out of this stock a number of times over the years, but for a 'growth' company, the growth has just really been slow. It just feels like all along the way they've been trying to balance managing expenses with growth and they've got it all wrong, but probably never had enough capital in the first place, with repeated injections along the way not really helping in the way it should have.
I'd be interested to hear other people's thoughts on this.
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