Quickflix is seeking to raise $5.5 million to increase the content of its online video streaming service and secure more users.
The company has announced plans to raise just over $2 million from a share placement and a further $3.4 million through a rights issue - both tranches priced at one cent per share.
The rights issue, offering shareholders one new share for every two shares held, has been fully underwritten by Patersons Securities.
The pricing is a significant discount on Quickflix’s last trading price of 1.7 cents per share before placed in a trading halt on September 2nd.
The company has a dismal track record when it comes to finances with it yet to make a profit in the decade since launching, with 2012 being an especially bad year.
For the 2012 financial year the company’s net loss increased to $14 million, up from just under $3 million a year earlier.
But things may be on the up for Quickflix with it reporting its first ever breakeven result in earnings before interest, depreciation and amortisation for the first time in the six months ending June 30 2013.
The improvement didn’t prevent the company from announcing an expected loss of $8 million before tax for the full 2013 financial year, however.
The loss reduced to $6.4 million following an income tax refund of $1.6 million.
Chief executive Stephen Langsford said the company’s investment in restructuring the business was resulting in increases in streaming usage.
He said the funds raised through the share placement and rights issue would be pooled into increasing content on the site and driving “profitable customer growth”.
Mr Langsford has also said the change in government would not impact Quickflix’s outlook going forward, despite the Coalition’s intention to curb the fibre to the premises roll out in the National Broadband Network.
The company claims the NBN under the Coalition is still a good thing for Quickflix because it will enable Australians living in rural and remote regional areas to have sufficient internet speed to enjoy streaming.
