Datamarine seeks $3.5 million investment
, Mountlake Terrace, WA, may yet receive the money it needs to fill back orders and continue product development.
Last month, it appeared as though a potential $6 million investment in Datamarine from High Desert Partners, Denver, was unraveling, although hope remained as late as Aug. 10. David Thompson, Datamarine’s president, explained at the time that HDP’s purchase of preferred shares and common shares and the grant of a bridge loan were “delayed” by other transactions that HDP had pending.
“While we are still hopeful that the HDP deal can proceed to closing, we and our placement agent, William Fritts of WPF Company, are also actively pursuing other potential investors in order to address our immediate working capital and long-term funding needs,” Thompson said on Aug. 10.
By Sept. 7, Datamarine’s gaze had left HDP and had fallen on Santa Fe Capital Group, Santa Fe, NM. Datamarine announced that it had signed an agreement with Santa Fe Capital to raise $3.5 million through the sale of convertible preferred stock with warrants.
Thompson commented: “Santa Fe Capital has a long record of raising funds for companies with similar size funding needs. During a period of 28 years, Santa Fe has raised more than $600 million.”
David Silver, president of Santa Fe Capital, said that he knows Datamarine’s marine products because his father used them on his boats. He said that Santa Fe Capital had not previously helped to fund marine equipment manufacturers, so there was no conflict of interest. He added that Datamarine has “a hell of good product line, and their people are impeccably honest and hard-working.”
He said that the convertible preferred stock would be priced above the market price but subject to events 12 to 18 months from now. He said that warrants could be added if certain conditions weren’t met.
“That’s what you do when the market has beaten down a stock,” Silver said.
Datamarine’s Thompson said that he has confidence in the company he has headed for 20 years, counting his service with SEA, which merged with Datamarine in 1985.
“The proceeds will be used to restore our marine and land mobile businesses to profitable levels. Our strong order backlog indicates we’re poised to resume our position as a premier provider of marine electronics,” Thompson said.
Thompson said the company also is the only manufacturer of 220MHz LMR equipment. Securicor Wireless, New York, uses Datamarine as its OEM supplier. Datamarine contracts with Seoul, Korea-based Maxon to make its own SEA 220MHz mobile unit. All of its other 220MHz equipment is made by SEA in the United States.
“We want to take advantage of the 220MHz market’s expansion. Once we restore the financial health of the company, we expect to revisit our plan to expand the 220MHz SMR spectrum and service provision segment of our business. Our lack of working capital has kept us from pursuing the spectrum ownership and operating portion of the business. We first acquired spectrum in 1993 and continue to believe opportunities exist in acquiring licenses and consolidating existing operators,” Thompson said.
