Linius Seeks Backdoor Listing to Commercialise Video File Technology
Linius Technologies is the owner of patented data management and broadcasting technology for video files
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.
Author: Simon Herrmann
Mar 30, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.