SelfWealth (ASX:SWF) share price on watch next week after $10 million capital raising

The SelfWealth Ltd (ASX: SWF) share price entered into a trading halt on Thursday, pending the completion of a $10 million capital raising.

While shares in the trading platform remain halted, the company provided more details for the uses of funds and an earnings guidance for FY21.

Capital raising to drive growth strategy

SelfWealth plans to raise $10 million through a capital raising at 39 cents per new share, or a 9.3% discount to its last close of 43 cents.

In addition, the company will offer eligible shareholders the opportunity to participate in a capped non-underwritten share purchase plan, raising up to $2 million.

SelfWealth also intends to utilise existing cash reserves of $3 million to pursue its planned growth initiatives.

With $15 million in total funds, the main areas of spend include $7.3 million in technology investment, $3.5 million in marketing, $2.2 million in data strategy and infrastructure, and $1.4 million in additional headcount.

SelfWealth previously said that it was negotiating with several cryptocurrency exchanges to roll out a new cryptocurrency product by Q2 FY22.

However, today's capital raising presentation said that the company will not be allocating funds towards a new cryptocurrency trading service until all Board and regulatory approvals are obtained.

As a result, the new cryptocurrency product is not expected to launch earlier than Q3 FY22.

Earnings guidance

SelfWealth forecasts FY21 revenue to be in the range of $18.2 million to $18.7 million, compared to $7.8 million in FY20.

Furthermore, the company expects an earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of between $900,000 and $400,000, compared to a loss of $2.9 million in FY20.

SelfWealth share price tumbles in 2021

The SelfWealth share price has struggled to gather momentum this year after a stellar 232% surge in 2020.

After releasing fourth quarter results on Monday, the SelfWealth shares continued to struggle, diving 11.96% lower on the day to a 1-year low of 40.5 cents.