Monday, 08 June 2020 10:57

MGM Wireless looks to raise $1.5 million through new share issue Featured


Australian-listed technology company MGM Wireless, the maker of the Spacetalk all in one children’s smartphone, watch and GPS device, has announced a share purchase plan to raise up to $1.5 million, with the capital raised to be used to accelerate the growth of its Spacetalk business.

Under the capital raising plan, eligible shareholders will be able to apply for up to $30,000 worth of MGM (ASX:MWR) shares at an issue price of 10.75 cents each.

MGM Wireless CEO, Mark Fortunatow said: “The SPP is an attractive opportunity reserved for our existing and loyal shareholders to increase their holdings prior to the company entering a significant next stage of scale-up and growth, and at a very attractive discount to an already COVID-19 affected share price”.

“With strong distribution of SPACETALK across Australia, New Zealand and the UK and the impending release of a new seniors watch, the capital raised will be used to further grow the SPACETALK business, as we near finalisation of additional distribution opportunities with major telcos. I strongly encourage shareholders to participate.”

The company said its children’s mobile phone watch has seen “phenomenal success” since it was launched from a single online portal in 2017.

“Sales soared online and were exponentially boosted by major bricks-and mortar retailers JB Hi-Fi, The Good Guys, Officeworks, among others, and e-commerce stores Kogan, Belong and Qantas Rewards,” the company said in its statement to the ASX.

“SPACETALK’s popularity in Australia rapidly spread to New Zealand via telco Spark and retailers JB Hi-Fi, Harvey Norman, Officeworks and Noel Leeming; and to the UK via Sky Mobile and retailer Currys Carphone Warehouse (UK).

“With revenues increasing 87% from the previous period to achieve record revenues for H1 2020, the company aims to scale-up growth and progress towards potential company changing deals for SPACETALK and new product releases.”

MGM says it will be releasing a new model watch specifically for seniors, as well as a new model children’s watch in time for Christmas sales.

“Both are high quality, carrier grade devices designed for international markets. Both are 4G, have improved battery performance, waterproofing and many other exciting and breakthrough new features. Both will be very attractive to International Mobile Network Operators and for expanded distribution,” the company said.

A new version of SPACETALK set to be released this month, designed specifically for seniors. and MGM says it expects its seniors watch revenue growth may match or exceed the revenue growth the it experienced with SPACETALK, “creating the opportunity to double the rate of the overall revenue growth and further solidify SPACETALK’s position as the leader in the fast growing connected family wearables market.

“With the development of the new wearable device for seniors, a new device for children, extensive existing distribution coupled with strong and growing recurring revenue generated through our AllMyTribe App and MGM's Communication Software Suite for schools, the company is on the cusp of experiencing a significant growth period.

“COVID-19 has impacted the MGM share price and capital markets in general. Very early on in the pandemic, the company implemented cost saving measures to ensure we maintain a strong cash and financial position whilst aggressively continuing our growth activities, releasing new products to take advantage of the tremendous opportunities in the rapidly growing family wearables market.

“The company believes that a Share Purchase Plan, whereby our existing and loyal shareholders are given priority access to invest in the company’s next growth phase at current share prices is appropriate.

“Capital raised through the SPP will be used to build up inventory of our new seniors device to meet the anticipated demand, accelerate development of our next SPACETALK children’s device and increase marketing investments to further accelerate and scale up MGM’s SPACETALK business.”

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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