KUALA LUMPUR (July 26): ACE Market-listed XOX Bhd plans to undertake a private placement exercise to raise RM9.95 million to develop a digital media management application.
In a filing on Tuesday (July 26), the mobile services provider noted that while it obtained shareholders’ approval to issue up to 717.31 million shares — or 10% of its issued share capital — it has opted to only issue up to 552.86 million shares for the placement exercise.
At an illustrative price of 1.8 sen apiece, which represents a discount of approximately 6.25% to the five-day volume-weighted average market price (VWAP) of XOX shares up to and including July 25, 2022 (LPD), the group expects to raise up to RM9.95 million from the placement exercise.
XOX said it has earmarked RM9.65 million of the proceeds to be invested into a digital media management application, while the remaining RM300,000 will be used to fund the proposed exercise.
Of the RM9.65 million, RM8.72 million has been set aside for the development costs of the digital media management application, while the balance of RM932,000 will be used to procure software and set up infrastructure.
“In view of the hassle smartphone users will have in managing digital media, the group plans to establish a digital media management application for users to view and manage digital media (such as photos, videos, documents, and music files) on their devices, effectively.
“The group intends to outsource the development of the digital media management application to various third-party vendors,” XOX said.
The group said the application is intended to be offered to XOX mobile subscribers whereby it will be bundled with respective mobile subscription plans, which consist of mobile data and cloud storage capacity.
“The mobile subscription plans may be subject to changes which will be finalised upon or after the launching of the digital media application, as it would be dependent on the demand and preferences of the customers,” it noted.
Shares in XOX finished unchanged at two sen, giving it a market capitalisation of RM75.76 million.