Edgewater Wireless launches $1.2M share offering after investors snap up previous $800K placement

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Less than a week after announcing an $800,000 share offering, an Ottawa tech firm that makes technology aimed at boosting the performance of Wi-Fi networks is launching an additional offering worth up to $1.2 million due to what it says is “exceptional” market demand.

Edgewater Wireless, which trades on the TSX Venture Exchange, announced last Friday it was issuing nearly seven million units comprised of a common share and a future purchase warrant, with expected proceeds of $800,000.

On Thursday, the firm said the initial non-brokered private placement was “fully subscribed” and announced it was issuing an additional 9.2 million units valued at up to $1.2 million.

“Demand for our recently announced private placement has exceeded supply,” Edgewater CEO Andrew Skafel said in a statement, adding the company’s management and directors are participating in both offerings.

The company said the new units will be priced at 13 cents each, up from 11 and a half cents in the original offering, due to “regulatory requirements and positive momentum in Edgewater’s stock price since the first offering.”

Since last Friday, Edgewater’s stock price has risen from 14 to 18 cents on the TSX-V.

Option to sell more units

Edgewater says it could raise additional capital if it decides to exercise an over-allotment option allowing the sale of up to 10 per cent more units.

The firm says it plans to divide the additional funds among engineering and product development ($660,000), sales, marketing and business development ($240,000) and working capital ($300,000).

Edgewater’s latest bid for new capital comes as the company fights to gain market traction amid supply-chain disruptions and a severe cash-flow shortage.

In the quarter ending Oct. 31, 2020, the most recent period for which the company has filed reports, Edgewater said it brought in no revenue at all, while posting a net loss of nearly $190,000. The company has not generated six-figure quarterly revenues since early in 2019 and has racked up total net losses of nearly $4 million over the past eight quarters.

In a statement last week, Skafel said the firm’s management and directors “are committed to our current strategic direction.”