Collaborate Corporation Limited (ASX: CL8) (Collaborate or the Company) is pleased to announce that it has signed a term sheet with Hishenk Pty Ltd (Hishenk), the Company's largest shareholder, for a financing facility of up to $850,000 (Financing Facility) to enable the business more flexibility for the launch of the Carly vehicle subscription business, marketing initiatives and the continued growth of the DriveMyCar business.
Funds drawn under the Financing Facility may be converted into equity at Hishenk's election, subject to all necessary regulatory and prior shareholder approvals, at the price of a proposed future equity raising by the Company (intended to be completed by the end of June 2019).
Additionally, the Company has entered into an agreement with Hishenk for the provision of $150,000 as an advance on equity raising funds. Subject to all necessary regulatory and prior shareholder approvals, Hishenk intends to offset this amount as a subscription for fully paid ordinary shares at the offer price of the Company's proposed future equity raising (Advance). This subscription for shares will be subject to shareholder approval as Hishenk is a related party of the Company.
The Financing Facility and Advance have been negotiated on favourable terms to the Company allowing the Company to limit dilution to shareholders at the present valuation and enable the Company to take advantage of the significant progress being made across the DriveMyCar and Carly businesses. The key terms of the Financing Facility and Advance are set out in Appendix 1 and 2 below. The Company will enter into formal documentation in relation to the Financing Facility prior to any drawdown, the terms and conditions of which will be standard for an unsecured loan of its nature.
Chris Noone, CEO of Collaborate Corporation commented, 'Collaborate is appreciative of the continued support of Hishenk. The Board and management remain cognisant of the need to optimally manage funding to support growth of the business and to allow time for the share price of the Company to more accurately reflect the value of the business.'
Mr Michael Abolakian, Director of Hishenk said 'We are thrilled to continue our support of Collaborate in the assistance of growing the Carly opportunity which we believe is not only one of the most exciting opportunities in Australian tech but also has the potential to completely revolutionise the $30 billion Australian automotive industry. We feel the current share price does not reflect the value of the Company, let alone the opportunity that Carly represents.'
About Collaborate Corporation Limited
Collaborate Corporation Limited is listed on the Australian Securities Exchange (ASX:CL8). It is Australia's leading listed company focused on 'collaborative consumption', 'peer-to-peer' or 'sharing economy' business model with a strong focus on mobility solutions. Collaborate's core business is www.DriveMyCar.com.au Australia's leading peer-to-peer car rental business, complemented by www.Carly.co, Australia's first truly flexible car subscription offering to be launched in March 2019. Other businesses include www.MyCaravan.com.au a leading peer-topeer caravan rental business and www.Mobilise.com a rental marketplace for under-utilised assets. Through our proprietary trust and reputation platform, www.peerpass.com.au we create 'trust' between individuals and make it possible for people and companies to safely transact with each other in the sharing economy.
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