The Bigtincan Holdings Ltd (ASX: BTH) share price is down 13% to 46 cents in Monday afternoon trade after the sales enablement automation platform business announced that it has successfully completed its institutional entitlement offer.
Bigtincan has raised proceeds of around $12.4 million before costs from institutional investors at 42 cents per share. Eligible retail shareholders will also be invited to participate in a retail entitlement offer at the same price to raise a further $3.2 million before costs.
The offer price represents a 21.5% discount to the last close of trade price before Bigtincan went into a trading halt (April 10th) and a 19.0% discount to the theoretical ex-rights price.
Proceeds from the $15.6 million capital raising are intended to be used as follows:
- $5.5 million to expand sales and marketing personnel mainly in the United States and the United Kingdom.
- $3.0 million for continued innovation in technology and product development.
- $5.5 million for merger and acquisition opportunities that satisfy the company's acquisition criteria.
- $1.6 million in working capital and transaction costs.
Foolish takeaway
The Bigtincan share price is still up an impressive 78% in 2019 in spite of today's fall. It has been one of the best performing small cap companies on the Australian market this year alongside other promising technology stocks Audinate (ASX: AD8), LiveTiles Ltd (ASX: LVT) and Volpara Health Technologies Ltd (ASX: VHT).
In February, Bigtincan reported its half-year result for the 2019 financial year. The company announced that annualised recurring revenue grew 63% to $20.9 million with revenue up 56% to $9.4 million. Of particular note was the 2% rise in retention to 87% and the 4% increase in gross margin to 88% demonstrating the ongoing cloud scale benefits. However, the company is still not profitable after posting a net loss of $1.95 million for the period.
Bigtincan recently upgraded its guidance for year-on-year revenue growth to be in excess of 40% for FY19 as the company continues to win new customers and up-sell to existing customers. The business certainly has a lot of potential and remains a stock that small-cap growth investors should be monitoring at the very least.
