MGM Wireless soars on capital raising
ADELAIDE publicly listed company MGM Wireless will welcome its first institutional investor as part of a new capital raising exercise to secure working capital.
ADELAIDE publicly-listed company MGM Wireless will welcome its first institutional investor as part of a new capital raising exercise to secure working capital.
The company has secured $2 million through a convertible note facility with clients of Gleneagle Securities, which is subject to shareholder approval at its annual meeting on November 16.
MGM Wireless has developed an all-inclusive smart watch, GPS tracker and smartphone aimed at improving children’s safety and curbing truancy.
Currently, the $349 wearable device called Spacetalk – designed in Australian and made in China – retails through JB Hi-Fi outlets and the company’s website.
More than 20,000 units will be available for sale by the end of the year.
The company has agreed to draw down on the finance in tranches over two years with an interest of 7 per cent payable on the drawn amounts.
Chief executive Mark Fortunatow, the company’s founder and largest shareholder with a stake of 17 per cent, said the company was after “flexibility” when securing funds to purchase more stock.
“This is a good financing option for us, which gives us the flexibility we need ahead of fast-tracking the production of Spacetalk,” he said.
“It is unsecured at an attractive interest rate and doesn’t restrict us from raising additional debt or equity,” he said.
“We continue to see strong demand for our Spacetalk watch and anticipate making announcements on new customers and bricks and mortar expansion in time for the Christmas selling season,” he said. Mr Fortunatow said he hoped the deal would be welcomed by the company’s shareholders, mostly high net worth private investors.
“As such having the note in place gives us and our customers surety that we can continue to aggressively grow the company in the fast-growing wearables category, he said.
MGM Wireless shares closed six per cent stronger at $3.29 on Wednesday.