X2M Connect Raising $4.9m to Retire Debt and Fuel Renewable Energy-AI Expansion
X2M Connect (ASX: X2M) has received strong support for a $4.9 million share placement and entitlement offer to strengthen its balance sheet, reduce debt and position the company for future market opportunities.
The placement of approximately 200 million shares to institutional and sophisticated investors at $0.013 per new share represents a 28% discount to X2M’s last closing price.
X2M will issue a further 174 million shares through an entitlement offer to existing shareholders at the same price, on the basis of two new shares for every five shares currently held, with participants also receiving one free unlisted option for every new share at an exercise price of $0.016 and an expiry in December 2027.
Stronger Balance Sheet
The capital raising will substantially strengthen X2M’s balance sheet, with the majority of the company to pay down most of its debt from the proceeds and other sources.
X2M will also use funds to drive stronger business momentum and grow addressable market opportunities in renewable energy and AI, as well as numerous public safety applications.
Cygnet Capital was lead manager to the raising, which X2M expects to finalise in August.
Investor Confidence
X2M chief executive officer Mohan Jesudason said the support received reflected strong investor confidence in the company’s strategy.
“This placement will extinguish the majority of our debt, strengthen our balance sheet and position us to accelerate expansion across our existing markets in Asia and the Middle East,” he said.
“We have already secured new mandates exceeding $5.5 million that provide significant momentum as we head into the new financial year, our renewable energy AI solutions are being pursued in Taiwan, and the recent addition of a public safety vertical in South Korea has significantly expanded our addressable markets.”
He said the company’s commercialisation efforts in the United Arab Emirates were also gaining traction.
Utilities Solution
X2M has developed and commercialised a proprietary Internet of Things (IoT) solution which delivers productivity improvements, cost savings and improved public safety to enterprise and government clients in the utilities sector.
The technology connects water, gas and electricity meters and other utility sensors to the internet, enabling data exchange and the remote control of these devices.
The company generates revenue from the sale of hardware and monthly subscription fees under Software-as-a-Service (SaaS) arrangements.
To date, X2M has deployed more than 500,000 devices connected to its IoT platform and distributed intelligence solution, providing real-time information and control to a customer base across multiple communications technologies.