E8IGHT, a digital twin platform corporation, bowed to shareholders over poor performance. The company's stock, which entered the KOSDAQ market last year, has been steadily declining. Kim Jin-hyun, CEO of E8IGHT, noted, "We have redeemed all remaining convertible bonds (CB) with the recent capital increase, and if the existing orders are recognized as revenue this year, we can achieve a 'revenue turnaround.'"
E8IGHT announced that seven agenda items, including the approval of financial statements, amendments to the articles of incorporation, and the appointment of internal directors, were approved at the regular shareholders' meeting held on the morning of the 31st in Songpa-gu, Seoul.
In particular, the company added 13 new business purposes to its articles of incorporation on that day, including ▲ software development and supply ▲ production and distribution of films, videos, and broadcasting programs ▲ advertising ▲ creative and artistic related services. The company plans to actively explore promising fields, including businesses utilizing specialized 3D modeling technology.
On that day, CEO Kim Jin-hyun, who took the chair, greeted shareholders with a slightly somber expression, saying, "We will practice more transparent and responsible management to meet the trust and expectations of our shareholders," adding, "We will strengthen research and development (R&D) investments to secure sustainable growth and revenue, focusing on building new business models."
E8IGHT, which entered the KOSDAQ market on Feb. 23 last year through a technology exception, focuses on developing and selling digital twin platforms based on simulation technology. A digital twin is a technology that virtually replicates objects in the real world and predicts and resolves possible issues through simulations. At the time of listing, the offering price was 20,000 won (adjusted price 18,399 won), and the largest shareholder is Kim, who holds a 19.83% equity stake.
The company initially expected annual revenue of 10 billion won at the time of its listing, but last year's actual revenue was only 2.3 billion won. This is because none of the initially anticipated 6 billion won in revenue from the Sejong Smart City project was reflected. The operating loss also reached 10.6 billion won, doubling the deficit from the previous year (5.3 billion won).
Shareholders who attended the meeting complained, saying, "Although a contract has been signed, isn't there actually no performance?" and "How could you plan to go public with revenue targets that cannot be seen even for the next year?"
On that day, E8IGHT's stock price fell nearly 20% during the session due to the rights offering, recording the lowest price since listing at 2,655 won. The rights offering allows investors participating in capital increases or CBs to secure profits by selling new shares two trading days before they are listed.
E8IGHT conducted a capital increase subscription worth 9.1 billion won this month for operating funds and debt repayment. The issue price per share is 2,855 won, and new shares will be listed on the 2nd of next month. One shareholder pointed out, "Is it reasonable that the current stock price is less than 3,000 won when most shareholders entered at 16,000 to 20,000 won?"
In response, Jung Joon-hee, head of the management strategy department, said, "While it is not a 100% satisfactory outcome, we clearly believe that this year will mark the turnaround, and key executives actively participated in this capital increase," adding, "Currently, all the 1st to 3rd series CBs have been redeemed, and with about 6 billion won remaining from the capital increase funds, there is no need for additional fundraising at this time."
The company expects to complete the Sejong Smart City project by June next year as required by the contract, and anticipates that a significant portion of the delayed Busan Eco Delta City project can be recognized this year.
In addition to the existing financing methods of CBs and bonds with warrants (BWs), the company introduced provisions for exchange bonds and profit-sharing bonds, and added clauses regarding interim dividends and stock dividends, considering when future stock dividends might become possible. Jung Joon-hee, whose term expired in November last year, was reappointed as an internal director.
CEO Kim Jin-hyun promised, "We will become E8IGHT, which grows together with shareholders through continuous innovation and leap forward."