Article originally published in: SatelliteFinance Issue 197 (January 2016).
Reprinted by permission. https://www.satellitefinance.com/
Satellite-based asset monitoring firm Orbital Tracking has started trading on the OTCQB, boosting the visibility of the US group’s common stock as it looks to expand into Asia.
The exchange, aimed at entrepreneurial and development stage companies, approved the listing on Monday, a week after Orbital raised US$1.1m through two private placements.
Orbital said on 30 December that it sold 1.1 million shares of preferred stock for US$550k, and US$605k in principal amount of original issue discount convertible notes due December 2017 for a purchase price of US$550k.
Most of the proceeds will fund its geographic expansion, as well as manufacturing a new line of branded dual-mode asset tracking products it expects to launch commercially early this year.
Chardan Capital Markets was sole placement agent for the offering, which was tapped by new and existing institutional shareholders.
It came after the group raised US$1.1m in February 2015 in a private placement connected to its all-share acquisition of Global Telesat, a group headed by David Phipps that sold contracts and licences to Orbital in 2014, enabling it to position itself for offering space-based solutions on MSS operator Globalstar’s network.
That same February, the group listed on OTC Pink, the OTC Markets Group’s lowest marketplace tier which, unlike OTCQB, has no disclosure requirements.
Phipps, who was brought in to advise Orbital as it searched for its space-based niche, was appointed CEO of the group following the Global Telesat deal.
Orbital posted revenues up 62% to US$983k for the three months to 30 September 2015, compared with Q3 2014. Sales grew 56% to US$2.95m for the nine months to the end of September 2015, compared with the corresponding period the year before.
However, it reported a Q3 2015 net loss of US$301k, compared with a US$12k net profit for Q3 2014. The group pinned the loss on increased services costs and expansion expenses including staffing, facilities and certain non-recurring professional fees.
Phipps said the Q3 2015 revenue growth was driven by strong e-commerce sales across Europe – up 179% in France, 95% in the UK, 70% in Italy, 66% in Spain and 57% in Germany. North America e-commerce sales also grew 73% during the quarter.
Comparable sales relating to recurring revenue from monthly service contracts for satellite phone and tracker products increased by 75% during the Q3 2015, compared with Q3 2014.
Phipps told SatelliteFinance that he sees further demand for its satellite tracking products – including personal trackers and asset trackers – in Asia, where it is on the lookout for additional satellite operator partners.
“We have also seen a significant increase in the sale of portable satellite phones and Wi-Fi hotspot terminals such as Iridium Go and Inmarsat Isathub,” he said.