Facedrive Upsizes Second Financing This Month To $17.5 Million
While the chart might not show it, there is reprotedly strong investor demand in Facedrive Inc (TSXV: FD). After announcing a $15.0 million financing on Friday, the company has seen enough demand that it has upsized the overall financing to $17.5 million as of this morning.
The financing is the second to be conducted this month, following the closing of a financing for $4.7 million in gross proceeds on March 1. This second financing is said to be “a result of additional investor interest arising from the company’s previous private placement.”
The difference however, is that investors in the previous financing are already being subjected to a down-round financing. That $4.7 million was raised at $0.64 per unit, with units containing one share, and one full warrant with an exercise price of $0.80 per share and a three year term.
This latest financing meanwhile consists of units being sold at $0.59 per each, which also contain one common share and one full warrant. Warrants are also valid for a period of three years, however they contain an exercise price of $0.73 per share.
“Investor demand for this placement has gone well beyond our expectations in the first 48 hours and, as a result, we have decided to upsize the offering from $15 to $17.5 million as the round has become oversubscribed. We see this as a strong vote of confidence in Management’s execution of our vision,” commented CEO Suman Pushparajah on the financing.
That confidence however has yet to be seen in the market. Aside from this latest financing being at a lower price point than the one closed just weeks ago on March 1, the equity has seen its valuation crater over the course of roughly the last year. Last February the equity soared as high as $60.00, before cratering to the sub $1.00 level by January 2022.
Part of the reasoning behind the valuation cratering was heavy insider selling, which ultimately lead to other insiders being let free from lock-up periods, to enable them to sell and salvage some value from their own holdings.
2021 saw such significant swings in the firms operations that the firm was reportedly mulling filing for bankruptcy protection under the Companies Creditors Arrangement Act in September 2021. The next month, the firm saw its auditor resign after just three months on the job due to challenges it faced with the company.
The latest financing is to see funds utilized for general business development and working capital purposes.
Facedrive last traded at $0.73 on the TSX Venture.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.