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Linius Seeks Backdoor Listing to Commercialise Video File Technology

Linius Seeks Backdoor Listing to Commercialise Video File Technology
Linius Technologies is the owner of patented data management and broadcasting technology for video files
Mar 30, 2016 By Simon Herrmann

Linius Technologies, owner of patented data management and broadcasting technology for video files, seeks to raise $3.5million in a reverse takeover of Firestrike Resources.

On 28 October 2015 Firestrike Resources (ASX:FIE) announced the acquisition of Linius Pty Ltd in an attempt to diversify away from gold and base metal exploration and focus on “cutting-edge” technology. Firestrike entered into a heads of agreement to acquire all of the issued shares in Linius for a total consideration of more than $5million, with the majority payable in equity. 

There are various reasons why technology companies choose to list on the Australian Securities Exchange via a reverse takeover, rather than an Initial Public Offering. Some of the most prominent arguments are lower fees and less effort to find new shareholders as the shell company already has an available share register. Linius Technologies seeks to raise only $3.5m, hence management believes it makes sense to pursue the reverse takeover strategy.

The key strategy of Linius pursuant to listing is to develop and commercialise its patented technology. To demonstrate core claims of its patents, Linius has completed an alpha release of its software suite. The Company has subsequently entered an evaluation and limited deployment agreement with Digisoft.tv, from which it plans to substantiate the market opportunity. Successful commercial trials and future licensing agreements are the primary drivers for this listing.

However, Linius does not presently generate revenue and is reliant on external capital to fund operations. While its technology is subject to patent protection, the technical and financial merits of its applications remain to be established. A significant degree of unallocated free float may impact near term trading performance.

Its patent protections and potential to eliminate or improve cumbersome segments of the broadcast value chain are attractive qualities. While the current evaluation agreement with Digisoft.tv highlights commercial potential for its software, demands for further trials and absence of near term revenue require a high risk, speculative appetite.

ASX Listing Details

Company: Linius Technologies Ltd

ASX Code: LNU

Shares on Offer: 70 million

Listing Price: $0.05

Market Capitalisation: $25.6 million

Listing Date: Apr 15  

This publication has also appeared on The Australian.

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Simon Herrmann Author: Simon Herrmann Mar 30, 2016

Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.


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