Defence and Homeland Security provider XTEK Limited (ASX:XTE) has secured a $10 million equity placement facility from Kentgrove Capital GrowthTech Fund to drive its next phase of growth.
Under the Agreement, Kentgrove Capital may provide XTEK with up to $10 million of equity capital via placements over the next 36 months, in a series of individual placements of not less than $100,000 and not more than $500,000.
Proceeds will be used to fund the rollout of XTEK’s proprietary XTclave technology which is used in lightweight armour applications including personal ballistic protection plates.
The company will also continue to develop other products for defence and commercial applications.
Strategic Defence Intelligence has estimated that the global body armour and personal protection market was worth US$1.5 billion in 2012 and will have compound annual growth rate of 4.89% to a peak of US$2.4 billion by 2022.
North America is the leading spender in the body armour and personal protection sector and accounts for 50% of the global market.
XTEK could have an opportunity to be a key supplier of personal ballistic protection plates that need to be replaced or issued to U.S. defence, police, and security agencies between 2017- 2022.
Under the facility, shares in each new placement will be issued at a 5% discount to a VWAP over the period of the placement but not less than the minimum price of $0.25.
The company has also issued 250,000 shares and 500,000 options ($0.45 exercise price, 3 year term) to Kentgrove Capital as an upfront establishment fee.
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