Linius Reports $3.7M Funding Boost Amid 60% Expense Reduction
Linius Technologies has implemented a sweeping operational restructure, cutting expenses by more than 60% compared to FY25, while progressing a pivotal proof of concept with a major European football league and securing over $3.7 million in new funding.
- New board and management team driving strategic overhaul
- Over 60% reduction in expenses compared to FY25
- Progress on proof of concept with top 3 European football league
- Early conversion of convertible notes to reduce interest costs
- Secured $3.7 million in capital commitments post-quarter
A Quarter of Transformation
Linius Technologies Limited (ASX – LNU) has embarked on a significant restructuring journey following the mid-year appointment of Brent Jones and Anthony Baker, two of its largest shareholders, to the board and executive team. This leadership change has catalyzed a strategic refocus and operational overhaul aimed at streamlining costs and sharpening the company’s growth trajectory.
The company has replaced its entire board and management team, with Brent Jones stepping in as interim chair after Gerard Bongiorno’s departure in early October. This new leadership has aggressively pursued cost reductions, achieving a remarkable cut of over 60% in total expenses compared to FY25 on a like-for-like basis. The savings, exceeding $3.6 million annually, have been partially reinvested into specialist marketing, sales, and engineering resources, resulting in a net cost reduction of more than $2.5 million.
Operational and Sales Momentum
Despite the cost-cutting measures, Linius has maintained investment in its sales capabilities, particularly within the sports vertical. Anthony Baker transitioned from a consulting role to Chief Operations Officer, underscoring the company’s commitment to operational excellence and growth. The sales pipeline is expanding, with contract renewals progressing as expected.
A key highlight is the ongoing proof of concept (POC) with a top three European professional football league. Although the project has experienced delays due to the client’s restructuring of licensing agreements with broadcasters, its successful completion is anticipated to unlock significant opportunities across European and global sports markets. Meanwhile, the POC with Fujitsu remains on hold but active communication continues, reflecting Linius’s pivot towards a software-as-a-service (SaaS) model rather than a software development agency.
Financial Resilience and Capital Raising
Financially, Linius has taken decisive steps to strengthen its balance sheet. The company issued 350 million shares and 1.535 million convertible notes in the quarter, raising $350,000 and establishing a convertible note facility with a 20% coupon. Post-quarter, it secured commitments for an additional $2.215 million through further share issuances and convertible notes, including significant participation from board members and senior management.
Notably, Linius exercised early conversion rights on existing convertible notes, converting 825,000 notes into over 510 million shares. This move reduces future interest obligations and reflects confidence in the company’s strategic direction. Additionally, Linius renegotiated and terminated a standby placement facility with Eli Capital Pty Limited, reducing associated fees and issuing replacement securities.
Cash Flow and Outlook
The quarter’s cash flow was impacted by restructuring-related costs, including redundancy payments and settlements of inherited liabilities totaling over $1.4 million. Despite these outflows, the company remains well-capitalized and expects to continue operations and meet business objectives, supported by recent capital injections and ongoing cost efficiencies.
Linius is also enhancing its technology platform by refining APIs and developing a live demonstration environment, which should shorten sales cycles and improve customer engagement.
Bottom Line?
Linius’s bold restructuring and capital strategy set the stage for growth, but execution on key POCs and sustained revenue gains will be critical in the coming quarters.
Questions in the middle?
- Will the POC with the European football league convert into long-term contracts?
- How quickly will the cost savings translate into improved cash flow and profitability?
- What impact will the shift to a SaaS model have on Linius’s revenue growth and market positioning?