- MyFiziq (MYQ) will soon become the majority shareholder in its own investment company, Body Composition Technologies (BCT), by participating in its new capital raise
- BCT aims to raise $1.92 million through a convertible note sale, a loan that has cash value and can be converted into shares
- Via the offer, MyFiziq will buy more than $670,000 worth of notes, increasing its stake in the company to 54.5 per cent
- Joint venture partner Gold Quay, who created BCT with MyFiziq, will also buy $1.25 million worth of notes
- In the meantime, under the joint venture agreement, both parties have agreed to increase the anti-dilution right to $6 million
- MyFiziq shares are trading down 1.75 per cent at 28 cents per share
MyFiziq (MYQ) will soon become a majority shareholder in its own investment vehicle, Body Composition Technologies (BCT), by participating in its new capital raise.
The company was created between MyFiziq and Gold Quay as part of a joint venture agreement signed in 2017.
BCT now aims to raise $1.92 million through a convertible note sale, a type of loan that has a cash value and can be later converted into shares.
MyFiziq said it will buy $670,833 worth of notes, which will increase the company’s stake in BCT to 54.5 per cent, on a fully diluted basis.
Under the deal, the notes can be converted at any time in the next two years.
Gold Quay will also take part in the capital raise for BCT, subscribing to buy $1.25 million worth of notes.
Along with the capital raise, Gold Quay and MyFiziq have also agreed to increase the Anti-Dilution Right threshold from $5 million to $6 million.
Essentially this means MyFiziq has been granted 50 per cent ownership of BCT, until Gold Quay raised more than $5 million in equity for the company. They’ll now have to raise more than $6 million.
So far, a total of $4.3 million in equity for BCT has been raised.
MyFiziq Group CEO, Vlado Bosanac, said the new terms negotiated are ‘favourable’.
“With board support, it was agreed that taking a majority stake in BCT was strategically an advantage and well-positioned for both companies whilst firming up BCT’s balance sheet,” he said.
“Furthermore, the increase to $6,000,000 on the anti-dilution position for MYQ is a very positive outcome, further protecting our interest in BCT and its growth,” he added.
MyFiziq shares are currently trading down 1.75 per cent at 28 cents per share at 1.11 pm AEST.