Spacetalk Ltd has raised $4.05 million through a combination of a conditional placement and convertible notes to accelerate its geographic expansion and app development, alongside appointing a seasoned director to its board.
- Raised $4.05 million via $1.5 million placement and $2 million September Converting Notes
- Directors and management committed $0.55 million in converting notes
- Placement shares priced at $0.11, a discount to recent trading prices
- Appointment of John Bird as independent non-executive director and Audit & Risk Committee Chair
- Amendments made to July Converting Notes terms to align with new capital raise
Capital Raise to Support Growth Ambitions
Spacetalk Ltd (ASX, SPA), a technology company specialising in wearable safety devices, has successfully secured $4.05 million in new funding. This capital injection comprises a $1.5 million conditional placement of new shares and $2 million through the issuance of September Converting Notes to institutional and professional investors. Additionally, the company's directors and senior management have committed $0.55 million via Management Converting Notes, underscoring internal confidence in the company’s growth trajectory.
The funds are earmarked to fuel Spacetalk’s geographic expansion, enhance its app development capabilities, purchase inventory, and cover associated offer costs. Managing Director Simon Crowther highlighted that the raise will enable the launch of a new software experience designed to invigorate the Spacetalk ecosystem and drive subscription growth, with a target annual recurring revenue (ARR) of $20-25 million in 2026.
Placement Details and Shareholder Approval
The placement involves issuing 13.6 million new shares at $0.11 each, representing a notable discount of 26.7% to the last closing price and 23.6% to the recent five-day volume-weighted average price. This discount reflects the company’s need to attract institutional support swiftly. However, the placement remains conditional on shareholder approval, expected at an Extraordinary General Meeting (EGM) scheduled for late October, with settlement anticipated shortly thereafter.
Unified Capital Partners and Taurus Capital are managing the placement, receiving a combined fee of 6% of funds raised. The conditional nature of the placement introduces some execution risk, but the strong institutional demand reported suggests robust investor appetite.
Convertible Notes and Amendments
Alongside the placement, Spacetalk is issuing $2 million in September Converting Notes, unsecured instruments that accrue 10% annual interest payable in shares. These notes convert into equity at a price capped at $0.14 or the price of any subsequent capital raise above $1.5 million, with a floor price of $0.08. The conversion is also subject to shareholder approval at the EGM.
Management’s $0.55 million commitment via similar converting notes aligns leadership interests with shareholders. The company also amended the terms of its July Converting Notes, lowering the minimum capital raise threshold for conversion and adjusting the conversion price to reflect the new placement price, ensuring consistency across its convertible instruments.
Board Refresh and Strategic Oversight
In a significant governance update, Spacetalk appointed John Bird as an independent non-executive director and Chair of the Audit & Risk Committee. Bird brings over 30 years of public company experience, including senior financial roles in technology and biotech sectors. His appointment follows the resignation of Martin Pretty and is expected to strengthen the board’s oversight as Spacetalk pursues international growth and product innovation.
Chair Georg Chmiel welcomed Bird’s expertise, highlighting its importance in navigating the company’s expansion and operational complexities. This leadership refresh signals Spacetalk’s commitment to robust governance amid its growth phase.
Looking Ahead
Spacetalk’s capital raise and board changes come at a pivotal moment as the company seeks to scale its wearable technology offerings globally. The success of the placement and convertible notes, contingent on shareholder approval, will be critical to funding its ambitious app development and market expansion plans. Investors will be watching closely for the outcomes of the upcoming shareholder meetings and the company’s progress toward its 2026 ARR targets.
Bottom Line?
Spacetalk’s fresh capital and board expertise set the stage for growth, but shareholder approval and execution remain key hurdles.
Questions in the middle?
- Will shareholders approve the conditional placement and convertible notes at the upcoming meetings?
- How will the dilution impact from convertible notes affect existing shareholders’ value?
- Can Spacetalk successfully execute its geographic expansion and app launch to meet 2026 ARR guidance?