QYOU Media is adding fuel to its growth engine with this morning’s (October 31) news that it secured a Bought Deal with Clarus Securities that will see the investment firm purchase 13.5 million units for gross proceeds of just over $5 million. The unit is comprised of a common share and a half warrant with each warrant good for 24 months and exercisable at $0.55. There is also an over-allotment provision where an additional two million units could be taken up by Clarus, which would see gross proceeds rise to $5.7 million.
The added bonus with this news is that there has been some “street expectation” that the company would raise additional growth capital, which tends to keep a lot of potential buyers out of the market. Quite simply, once the street knows a company has the funds it requires for the future, people are more comfortable investing in the organization.
This bought deal follows two recent updates from Clarus Technology Analyst Joseph MacKay, who is calling for near-term robust growth.
In addition to his review of Q4/Fiscal 2017 (June 30) results, which saw revenues climb to $1.33 million or 322% over Q4/F2016, Mr. MacKay provided his perspective on the second half of calendar 2017.
He’s looking for the quarter ended September 30th to jump to $2.3 million and the December 31st quarter end at $2.9 million. On a calendar basis, he remains committed to revenues of $7.5 million for 2017 and $15.4 million in 2018. His price target is $1.10 per share.
He also provided comment on last week’s announcement that come January 2018, QYOU is launching a dedicated sports program with Super Channel’s GINX eSports TV Canada. Following the announcement on Heads Up Daily (HUD), management held an investor conference call where it was stated that the company expects revenues of $3 to $5 million just in 2018 from this new program.
Mr. MacKay wrote that management “believes that international revenue in 2019 could reach 4-5x 2018 levels. The mid-point of management’s eSports guidance represents 26% of our 2018 revenue forecast, while a 4-5x increase in 2019 would represent 64%-80% of our 2019 revenue estimate”.
The analyst is forecasting $25 million in revenues for 2019 and this was before the HUD deal was sealed.
It was also reiterated that 70% to 80% of annual revenues are recurring.
To view today’s news release, please click here.