Halifax-based video game tech startup Swarmio Media revealed it intends to go public on the Canadian Securities Exchange (CSE), in a June 25 filing.
The company doesn’t plan to sell or issue any new securities in connection with the move, which was first reported by Private Capital Journal. Instead, according to Swarmio’s non-offering preliminary prospectus, the startup has created a new holding company, Swarmio Media Holdings, which secured $5 million in gross proceeds through a June private placement.
Swarmio aims to use the funding to support its expansion into the Middle East, North Africa, and South Asia.
Swarmio intends to apply to go public on the CSE via a reverse takeover of Swarmio Media Holdings. According to the startup, once complete, the transaction would equip Swarmio with approximately $6.8 million in working capital between the private placement proceeds and the company’s existing funding.
Founded in 2015, Swarmio, formerly known as Ubique Networks, has developed a set of internet infrastructure and software for the gaming and esports ecosystem. The startup’s solutions include proprietary, patent-pending smart edge computing tech and a gamer engagement and monetization platform. Swarmio has offices in Halifax, Toronto, and Sydney, and its investors include Toronto’s Extreme Venture Partners and Nova Scotia’s Innovacorp.
Swarmio aims to use the funding from its private placement to support its expansion into the Middle East, North Africa, and South Asia and develop and release a new online gaming platform and live streaming service for esports over the course of the next 12 months.
Between the new funding and Swarmio’s existing financing, the amalgamated company is expected to have nearly $6.8 million in working capital. In its prospectus, Swarmio said it anticipates the transaction will give the company the cash necessary to execute its business objectives and cover its operating and administrative costs for at least a year following the completion of the acquisition.
As part of the arrangement, Swarmio Media Holdings will issue about 59.2 million common shares in exchange for 100 percent of the common shares, preferred shares, and convertible securities of Swarmio.
According to Private Capital Journal, following the completion of the deal, which would value Swarmio at approximately $20.7 million, the largest shareholders of the new company will be Swarmio founder and CEO Vijai Karthigesu and Innovacorp.
According to Entrevestor, the move represents a pivot from Swarmio’s initial plan to go public on the TSX Venture Exchange. The company told Entrevestor it abandoned this plan in April 2020 because COVID-19 drove down stock markets.