Australian Small Scale Offerings Board seeks cash injection

The Australian Small Scale Offerings Board, a company that helps small businesses raise capital, is seeking its own cash injection after posting a loss of $2.6 million in the six months to 31 December.

 

ASSOB is trying to raise $750,000 through the issue of 7,500,000 shares at 10c to be offered to sophisticated and professional investors. That looks like a tough sell, given the company’s shares, which trade on the regional sharemarket, the National Stock Exchange, last traded at just 1c.

 

Chief executive Paul Niederer and chairman Tony Puls say the company has been dramatically restructured after about 70% of its revenue evaporated following the start of the global credit crisis. 

 

Around 50% of its workforce has been sacked, it has closed its Sydney head office, and restructured director and executive remuneration.

 

The company’s balance sheet at 31 December 2008 shows it had no cash in the bank at the time, $145,708 in receivables and other unspecified current assets of $704,972. On the other side of the ledger, the company had $332,687 in trade payables and $269,077 in short-term borrowings.

 

Puls says he and the company’s major shareholder have been supporting the company for the last seven months while the company developed new products and revenue streams, including a magazine called Smart Capital that will be launched in May.

 

“Now is the time to really capitalise on what we’ve built in the last quiet seven months. A cash injection will help us do that,” he says.

 

“But it’s not something that we are desperate to get in because we are still supporting the business.”

 

Puls says he is pleased with the initial reaction to the share offering. “There’s enough interest in that we are confident it will be taken up fairly quickly.”

 

While ASSOB is selling advertising and advertorial space in the Smart Capital magazine, it is essentially a vehicle to promote those companies ASSOB is assisting with capital raisings.

 

“It will make money for the company but it won’t be a huge earner for us. It’s mainly for distribution – to help showcase our clients who are raising capital and get them in front of as many investors as possible.”

 

 

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