MyFiziq raises capital at significant premium to recent trading levels
MyFiziq Limited (ASX: MYQ) has received firm commitments to raise $5 million from institutional and sophisticated investors, allowing management to continue the group’s rapid expansion through internal operational initiatives and providing assistance to partners in bringing collaborative products to market.
This comes ahead of a proposed NASDAQ IPO and other strategic investment opportunities that remain in the pipeline, but will not be the subject of capital investment from this raising.
The capital raising will be completed through the issue of shares at $1.20 each, together with a 1:1 free option with a strike price of $1.60 and a 3-year expiry date.
Commenting on this development, chief executive Vlado Bosanac said, “I am very pleased with the support we have received for the placement.
‘’We worked closely with Evolution Capital and the list of institutional and high net worth investors they brought to the table.
The offer closed substantially oversubscribed, demonstrating significant investor interest in the company.
‘’With the current partner rollouts underway and MyFiziq starting to generate revenue, we are now in a position where the company is unlikely to need additional capital outside of any strategic investment opportunities currently being considered or the proposed NASDAQ listing.
‘’This new capital will assist the company in more rapid expansion of our team and the ability to assist our partners in expediting their go to market timelines.”
Strike price represents 330% premium to August share price
It is worth noting that MyFiziq’s shares were trading at 28 cents two months ago, indicating that the strike price for the capital raising represents a 330% premium to its share price in August.
MyFiziq’s ability to complete a heavily oversubscribed capital raising at a premium price is an endorsement of both the company’s operational future and management’s ability to continue to successfully execute on its growth initiatives.
One only has to consider the amount of merger and acquisition activity occurring within MyFiziq’s specific area of activity, in particular the $559 billion telehealth industry to appreciate the wealth of opportunities that should present themselves in the near to medium-term.
Consequently, it appears to be an astute move by management to remain on the front foot in positioning the group to engage in its own corporate initiatives, including the collaboration with players in adjacent industries, something that has been a hallmark of the group’s success in 2020.
The following graphic shows the intense activity in the industry, and whether MyFiziq emerges as a suitor or a target, one can only expect that the outcome will be financially beneficial.
COVID-19 isolation has fuelled retail trading on a global scale.
There has been a strong focus on companies that provide stay-at-home type services such as Amazon (NASDAQ: AMZN) - its shares have increased from about US$1600 to a high of US$3550 in the last 12 months with the majority of those gains occurring since the emergence of COVID-19.
MyFiziq benefits from similar activity as it allows users who are exercising in their homes to track their progress on a smartphone.
With limitations regarding travel outside the home and many gyms closed, this has become an important offering at a time when even day-to-day activities such as exercising while travelling to work and shops for example is prohibited.
Such has been the interest in MyFiziq that its shares have increased from about 7 cents six months ago when the impact of coronavirus first became evident to Friday’s closing price prior to the capital raising of $1.36, making it an overnight 20-bagger.
But Bosanac has proven his ability to continually identify new opportunities, and it wouldn’t be surprising to see further upside in the near term.
Furthermore, should the company progressed with its intention to list on the NASDAQ this would open up additional access to capital markets, as well as increasing the group’s profile.
Consequently, numerous share price catalysts are in play and MyFiziq very much remains a ‘’watch this space’’ stock.