DataMotion raising funds for possible M&As

IT security company DataMotion (ASX:DMN) will put most of the funds raised in a newly-announced rights issue towards finding M&As or investment targets

IT security solutions company DataMotion Asia Pacific (ASX:DMN) plans to conduct a rights issue to raise up to $615,000.

The company announced a one-for-three non-renounceable issue, underwritten to up to $200,000.

Each new share allocated will be bundled with an attaching option exercisable at half a cent per share by March 2013.

DataMotion intends to use a small part of the proceeds to upgrade IT equipment, but the bulk will go towards funding a search for possible acquisition or investment opportunities.

The company had in FY11 decided not to proceed with a planned mining joint venture, after a negative sample assessment at the site.

But DataMotion still managed to trim its losses for the year by 36 per cent to $953,000, even in the face of a 20 per cent decline in revenue.

If the full amount of the issue is subscribed to, it will result in the allocation of 1.23 billion new shares and the same amount of options.

DMN shares stayed flat on Wednesday at $0.001. The shares entered a trading halt during the day.

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