Funding Secured To Underpin New Phase Of Revenue Growth

DC Two Limited (ASX: DC2) (“DC Two” or the “Company”), a vertically integrated revenue generating data centre, cloud and software business, is pleased to announce that it has received binding commitments from institutional and sophisticated investors to successfully raise $1,000,000 (before costs) through a two-tranche placement (“Placement”).

Highlights

• DC Two has strengthened its commercial foundation and received binding commitments to raise A$1,000,000 at $0.039 per share, via a two-tranche placement to sophisticated and institutional investors.
  
• The company is also undertaking a Share Purchase Plan to raise up to a further A$1,000,000 (with the ability to accept oversubscriptions), with eligible shareholders able to acquire shares at the same offer price per share as the placement.
• Proceeds will be used to accelerate recurring revenue, offer additional flexibility to pursue growth opportunities, and execute a comprehensive investor engagement strategy aimed to increase the Company’s value and liquidity.
• Significant cost efficiencies have recently been achieved, resulting in an estimated A$500,000 per year reduction in overall costs. A full internal restructure has also re-aligned focus towards growing revenue at the Bibra Lake data centre.

The Company will also offer a share purchase plan (“SPP”) to existing shareholders to raise up to $1,000,000, with the ability to accept oversubscriptions. Existing eligible DC Two shareholders will be given the opportunity to acquire additional shares up to a maximum of $30,000 per eligible shareholder at the same issue price as shares issued under the Placement, being $0.039 per share.

The Placement was well supported and bids received were in excess of what was being offered under the Placement, providing strong validation that investors appreciate the Company’s new growth strategy. DC Two will cancel the second tranche convertible note offering announced in May 2022, due to the lengthy shareholder approval process and requirement for immediate funding to execute growth objectives.

DC Two’s Managing Director Blake Burton commented: “We are delighted with the outcome of the Placement. This marks a major reset for the business, and demonstrates the belief that the Company is positioned to grow alongside its expanding customer base. We have achieved sixth consecutive quarters of recurring revenue growth with very limited capital and resources, and this funding will allow our team to grow revenue, maximise shareholder return and scale our presence in Western Australia and beyond.”

Entering the next phase of growth

The Placement will enable DC Two to accelerate its growth trajectory, and formalise its aspirations to become a major data centre, cloud and professional services provider with a national footprint. The funding will also ensure DC Two has a strong commercial foundation, and will provide a robust balance sheet to support its growth ambitions for a significant period of time.

Funds will immediately be directed towards marketing efforts aimed to supercharge recurring revenue in the Bibra Lake data centre - WA’s only Tier III design accredited data centre with its own ISO 27001 ISMS accredited cloud platform. DC Two will also pursue Tier III construction accreditation, and if successful this will provide further competitive advantages when tendering for large enterprise customers.

Recently, DC Two achieved its sixth consecutive quarter of recurring revenue growth, increasing 14.7% to a record A$1,014,110 for Q4 FY22. This growth has been achieved with very limited capital and resources, and the Company is highly confident that recurring revenue for Q1 FY23 will continue to trend higher.

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