iWOW Technology Secures S\$3 Million Strategic Investment Through Private Placement: Shareholder Set to Become Substantial Holder

Key Points of the Announcement

• iWOW Technology Limited entered into a subscription agreement with Mehta Vimesh Piyush, an existing shareholder, for the issue of 15 million new ordinary shares at S\$0.20 per share, totaling gross proceeds of S\$3 million.
• The subscription price reflects a modest 1.6% discount to the recent volume weighted average price (VWAP) of S\$0.2032, aligning with market norms for private placements.
• Following completion, the subscriber’s shareholding will rise from 2.73% to 7.98% of the enlarged share capital, making him a substantial shareholder under Catalist rules.
• No moratorium is imposed on the new shares, and they will rank pari passu with existing shares, except for dividends declared prior to completion.
• The placement is not underwritten and involves no introducer or placement agent fees.
• Proceeds will be used for M&A activities (67.8%) and working capital focused on Age-Tech initiatives (32.2%), including capital expenditure for ongoing government contracts and new solutions.
• Directors confirm the company has adequate working capital even without the placement, but the proceeds will further strengthen its financial position and capital base.
• Shareholders are cautioned that the completion of the placement is still subject to several conditions, including regulatory approvals and KYC/AML checks.

Detailed Analysis and Investor Implications

iWOW Technology Limited has taken a significant step to bolster its balance sheet and strategic flexibility by entering into a private placement agreement with existing shareholder Mehta Vimesh Piyush. The S\$3 million capital raised through the issuance of 15 million new shares will be priced at S\$0.20 per share, a slight discount to the recent market average but above the trading range observed over the past year, which has seen limited liquidity.

This capital injection will elevate Mr. Mehta’s holding from 2.73% to 7.98% of the company’s enlarged share capital, resulting in his designation as a substantial shareholder. Notably, Mr. Mehta is a private investor and entrepreneur with no business or personal relationship with the company, its directors, or major shareholders, apart from his current shareholding. He will remain a passive investor, with no operational role in the company.

The new shares will be allotted under the existing share issue mandate, with iWOW confirming that the total shares issued under the mandate (up to 131.6 million on a non-pro-rata basis) far exceeds the 15 million shares in this placement. No moratorium applies to these shares, which may impact secondary market liquidity and price dynamics upon their listing.

Strategic Rationale and Use of Proceeds

• Most of the funds (approximately S\$2 million or 67.8%) are earmarked for expansion through investments, M&A, joint ventures, and fulfilling payment obligations arising from completed transactions.
• The remainder (S\$950,000 or 32.2%) will support working capital needs in the Age-Tech segment, including ongoing deployment of the Wireless Alert Alarm System for GovTech and additional solutions such as fall detection sensors and wearable alert devices.

Pending deployment, the proceeds may be temporarily placed with financial institutions or used for other short-term working capital needs. The company commits to ongoing disclosure of material use of proceeds and any deviation from stated plans.

Potential Price-Sensitive and Shareholder-Relevant Issues

• Substantial Shareholder Emergence: Mr. Mehta’s new status as a substantial shareholder may influence future corporate actions and shareholding dynamics.
• No Moratorium on New Shares: The lack of lock-up could mean increased trading activity and potential price movements upon share listing.
• Strategic M&A Readiness: The company signals a strong intent to pursue M&A and strategic investments, which could lead to material corporate developments in the near future.
• Age-Tech Segment Focus: Significant reinvestment into Age-Tech and government contracts may drive growth and market re-rating if these initiatives succeed.
• Financial Strengthening: The capital raise strengthens the company’s capital base and liquidity, providing resilience against market uncertainties.
• Completion Risks: The placement is still conditional on regulatory, KYC/AML, and shareholder approvals; failure to satisfy conditions within a month could void the agreement.

Financial Effects

• Net Tangible Assets (NTA) per share: Will rise from 7.20 cents to 7.89 cents post-placement, reflecting improved balance sheet strength.
• Loss per Share (LPS): Dilution effect will reduce LPS from 0.69 cents to 0.65 cents, assuming completion at the start of the financial year.

Regulatory and Corporate Governance

• The proposed placement complies with the Catalist Rules and will not result in a change of control.
• The company will remain in compliance with the minimum public float requirement (at least 10% in public hands).
• Directors and substantial shareholders have declared no interest in the placement, and the subscriber is independent from management and other major shareholders.

Caution to Shareholders and Investors

Shareholders are advised to note that completion of the placement is not guaranteed. The transaction is subject to regulatory and internal approvals, as well as satisfactory completion of compliance checks. Any material changes or failure to complete could impact the share price.

Conclusion

This private placement represents a pivotal moment for iWOW Technology, strengthening its financial position and signalling ambitious growth plans, especially in strategic investments and the Age-Tech vertical. Investors should monitor further announcements regarding the completion of the placement and subsequent deployment of funds.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The author and publisher are not responsible for any actions taken based on the information provided herein.

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