Linius Board Revamp and Funding Raise Questions on Dilution and Growth
Linius Technologies secures $3.3 million through share placement and convertible notes, appointing former AFL CEO Andrew Demetriou to its board as it accelerates commercial momentum under new leadership.
- Capital raising of $3.3 million via share placement and $3 million convertible note facility
- Andrew Demetriou and Brent Jones join Linius Board
- Directors to take remuneration in convertible notes to conserve cash
- Expansion of sales team and progress on paid proofs of concept, including with European sports league
- Goal set to achieve cashflow breakeven amid operational cost reductions
Capital Injection Fuels Growth Ambitions
Linius Technologies Limited (ASX – LNU), a cloud-based video solutions provider, has announced a $3.3 million capital raising initiative comprising a $350,000 share placement and a $3 million convertible note facility, with $2 million already committed. This funding round underscores growing investor confidence in the company’s trajectory under new CEO Ben Taverner, who joined earlier this year and is steering Linius toward cashflow breakeven.
Strategic Board Appointments Signal Commercial Focus
In a notable move, Linius has appointed Andrew Demetriou, former CEO of the Australian Football League (AFL), and financial services veteran Brent Jones to its board. Demetriou’s extensive experience in sports and entertainment is expected to help unlock commercial opportunities, especially as Linius advances paid proofs of concept with major sports leagues, including one in Europe. Brent Jones brings a strong background in capital markets and corporate governance, complementing the company’s growth ambitions.
Innovative Funding Structure to Preserve Cash
To conserve cash, all directors have agreed to receive their remuneration in convertible notes rather than cash, subject to shareholder approval. These notes carry a 20% annual coupon, mature in 24 months, and convert at a low price of $0.001 per share, potentially diluting existing shareholders by up to 44.4% if fully converted. This approach reflects Linius’s pragmatic stance on balancing growth investment with financial discipline.
Scaling Sales and Commercial Pipeline
With the fresh capital, Linius is expanding its sales team by recruiting senior personnel to support a rapidly growing pipeline. CEO Ben Taverner highlighted significant commercial momentum, particularly in sports and security sectors, where multiple market-leading video surveillance providers are engaging with Linius’s SaaS platform. While current revenues from proofs of concept remain modest, these engagements are viewed as critical stepping stones toward larger commercial contracts.
Board Changes and Governance
The company also announced the departure of Executive Director Giuseppe Rinarelli, who will continue as CFO and company secretary, and the upcoming resignation of Non-Executive Director John Wallace. Meanwhile, the board plans to grant performance-based options to directors, incentivizing value creation tied to share price milestones over the next five years.
Bottom Line?
Linius’s fresh capital and high-profile board additions set the stage for a pivotal growth phase, but investors will watch closely for execution and dilution impacts.
Questions in the middle?
- How will the convertible note dilution affect shareholder value if fully converted?
- What commercial contracts might emerge from the ongoing paid proofs of concept?
- How effectively can the new board members leverage their networks to accelerate revenue growth?
