Eligible shareholders will also have the opportunity to participate in a share purchase plan (SPP) at the same issue price to raise an additional $0.5 million taking the total raising to $3.5 million.
Funds raised will be used to accelerate the development and commercialisation of XTEK’s XTclave™ and XTatlas™ technologies, and to provide working capital for growth from major contract wins.
Philippe Odouard, managing director, commented: “We are pleased by the considerable support shown during this equity raising.
“It reflects a strong endorsement from the investment community and XTEK’s shareholders and places the company in a very strong position to accelerate the growth of the business and to benefit from the global trend of increased government spending on security equipment and technology in the face of growing global uncertainty.”
XTEK is a leader in homeland security equipment for the military and police sectors.
The supply and maintenance of small unmanned aerial systems (SUAS) is becoming a major focus for XTEK.
In addition, XTEK has developed a range of new technologies which it is now commercialising for the international market.
XTclave™ composite protection products and XTatlas™ real-time geospatial video provide novel solutions for western military forces.
Use of funds
Funds raised from the placement and SPP will be primarily used for:
- XTclave commercialisation: including the construction of XTEK’s own commercial scale XTclave production plant and ancillary equipment, allowing XTEK to continue the promotion of its technology on the world market. This will allow XTEK to produce commercial quantities of its advanced XTclave personal hard armour ballistic protection plates;
- XTatlas technology development: the commercialisation of XTatlas through its existing and future unmanned aircraft system contracts is a key focus for the company;
- Expansion capital: to allow the achievement of revenue guidance and pursue more and larger contracts in the future; and
- Costs of the placement and SPP.
The proposed timetable for the placement and SPP is as follows:
- 27 June: Record date for SPP;
- 30 June: Settlement of placement;
- 3 July: SPP booklet despatched to shareholders; and
- 24 July: SPP closes.
The capital raising provides XTEK with the necessary funding to continue its strong momentum in 2017, which has seen the share price rise over 65% to $0.55.
XTEK is well positioned with Australian federal and state governments increasing their spending on security equipment during these uncertain times.
This is highlighted by the company’s recent $1.7 million contract for the supply of two explosive ordnance disposal (EOD) robots to a state police force.
Furthermore, XTEK is well placed to secure additional sales contracts as robots used by Australian law enforcement agencies are approaching the end of their useful lifecycle and will need to be either upgraded or replaced.