ASX-listed beer company Broo has issued $300,000 worth of unlisted options, facing a shortfall of funds to meet its financial commitments in this quarter.
Broo had $71,000 in the bank as at December 31, 2019, according to its quarterly report released on Friday.
With loan facilities of $1.85 million fully drawn, the company estimates total cash outflows for the March quarter of $805,000.
These outflows are to be comprised of administration and corporate costs ($450,000), staff costs ($150,000), product manufacturing and operating costs ($200,000) and advertising and marketing ($5000).
Broo reported negative net cash from operating activities of $91,000 for the December quarter, with admin, staff and manufacturing costs exceeding its $583,000 in receipts from customers.
“The company expects that it will continue to have negative operating cash flows in the short term,” said Broo.
“The board and management carefully monitor the company’s cash flow and are satisfied that additional short-term funding will be secured to continue to fund operating activities.”
Late on Friday, the company issued 15,000,000 unlisted options with an exercise price of 2c per option, each option exercisable for one share in the company up until January 8, 2022.
Broo told the ASX it issued the securities, “in consideration for commercial services provided to the company”.
This issue of unlisted options follows the January 8 issue of 50,000,000 ordinary shares at a price of 1c per share.
“Funds raised from the placement will be principally used by the company for general working capital purposes as it moves forward with its plans to develop its portfolio of beer brands,” Broo foreshadowed in an announcement on Christmas Eve.
Shares in Broo last traded at 1.6c.