Atomos locks in $13.7M cash boost with smart | Australian Markets

ASX-listed video technology innovator Atomos Limited has struck a savvy new $13.7 million debt deal – wiping out its previous facility and dodging any shareholder dilution in the method.

The transfer additionally delivers a recent shot of $5M in working capital, because the company eyes a return to constructive cash move within the following 12 months.

Atomos develops versatile handheld video recorders and screens. Its flagship Ninja gadget is designed to report instantly into common enhancing codecs, akin to Apple’s ProRes and Avid’s DNxHD platforms.

By decompressing information from reminiscence size-restricted cameras onto the gadget customers can remodel low decision digital information into high-quality video recordsdata.

In what seems to be a main vote of confidence in the business’s future, the secured funding has been supplied by Monreii Pty, a non-public company related with Atomos government director Peter Barber.

The new deal means Atomos can instantly wipe the slate clean on $8.7M in current unsecured loans, whereas the remaining funds offer the firepower needed to speed up the company’s product development and supply the required working capital earlier than returning to revenue in 2026.

In return for the two-year deal, Atomos has agreed to pay a 16 per cent rate of interest, which might be capitalised and paid out at maturity. On high is a 4 per cent annual payment, dished out month-to-month in arrears.

By deferring the curiosity price till maturity, short-term cash move ought to instantly improve, leaving the company with respiratory room to concentrate on growth.

Notably, there are no early reimbursement penalties, giving Atomos full flexibility to pay down the ability forward of schedule if issues go higher than anticipated.

The company has additionally supplied up security over itself and a few chosen working entities. However, in what seems to be a additional show of confidence from its lender, no heavy-handed covenants have been slapped on other than the usual limits on dividends and capital returns.

“The debt facility is a major step forward in our strategy to rebuild shareholder value in the Atomos business without requiring any equity dilution.” Atomos Limited chairman James Joughin

The Monreii facility emerged as probably the most compelling option after the company ran the ruler over different funding choices akin to equity raisings, convertible notes, hybrid securities and even trade sale alternatives.

Management says the ultimate financing route supplied the best stability transferring ahead because it offers the company funding certainty, speedy execution and – protects shareholders from dilution.

Barber holds 8.2 per cent of the shares in Atomos and has a controlling curiosity in the lender, which might usually place him as affiliate of a associated occasion underneath ASX guidelines. Since the loan is secured, the governance test would often require a shareholder vote to approve the granting of safety over the company’s belongings.

In this case, the deal was hammered out at arm’s size, backed by the total board and unbiased legal advisors. With all of the safeguards in place, Atomos has efficiently secured a essential ASX waiver, permitting it to bypass the need for shareholder approval and fast-track the loan with out the pink tape.

Despite making stable progress in trimming prices and streamlining operations, Atomos’s cash flows have remained underneath stress because the company has been weighed down by a string of legacy hangovers, together with legal settlements, workers redundancies and catch-up funds to suppliers from the earlier financial 12 months.

The clean-up job is now almost carried out and the company expects all legacy-related objects might be wrapped up by June, paving the way in which for a considerably improved financial efficiency and a a lot clearer runway forward.

And the timing couldn’t be higher. Atomos is set to carry the curtain on a suite of new services on the NAB Trade Show in Las Vegas this month. The show is famend as the last word occasion in the world of media, leisure and technology and is a key focus level for entrepreneurs in the broadcasting, digital media and movie sectors.

Atomos says its new product lineup is anticipated to spark a boost to gross sales from the final quarter of the 12 months, which may deliver the company back to a constructive cash move within 12 months.

Management’s efforts to revive company profitability in the previous 12 months seem to have been principally hindered by one-off restructuring prices coupled with an unlucky delay in the roll out of new merchandise.

With a cleaned-up stability sheet and the approaching launch of its new merchandise, Atomos seems to have righted the ship to sail into calmer waters.

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