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An embattled Gold Coast-based dental company in absentia on the ASX has an ace up its sleeve after receiving a binding agreement from a sophisticated investor to raise $430,000 for working capital.
Smiles Inclusive (ASX: SIL) says the investor has also promised a further $570,000 later in the half.
The company was suspended from the ASX earlier this month after failing to lodge its half-year audit on time.
The company raised $3.3 million and sold two Queensland practices late last year, but at the end of the December quarter it only had $709,000 in cash.
Smiles has previously forecast total estimated cash outflows of $12.7 million for the current quarter, which is almost $1 million more than what it made in customer receipts last quarter.
After being drilled by the ASX about whether it has enough cash to scrape by, Smiles announced to the market this afternoon it would issue 11.3 million new shares at 3.8 cents each.
This is a small premium to the company's last trading price of 3.5 cents.
"New Shares issued will rank equally with existing fully paid ordinary shares on issue and are expected to be issued 11 March 2020," the company said.
"The Placement will fall within the Company's placement capacity pursuant to ASX Listing Rule 7.1, so shareholder approval is not required.
"The cash generated from the Placement will be used to meet its working capital requirements, and the investor has indicated that it would like to invest an additional $570,000 at the same price per share at a time before 30 June 2020."
Smiles says it is working with its auditors to finalise the review of its half-year financial statements "as soon as possible and will provide an update in due course".
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