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Australian metal 3D printer manufacturer Titomic (ASX: TTT) has secured firm commitments from new and existing investors to raise $9 million through a share placement priced at $0.26 per share.
The company is also offering a share purchase plan to allow its shareholders to apply for up to $30,000 worth of shares at the same price. Together, the share placement and purchase plan are expected to raise around $11 million, which the firm will use to accelerate its commercialization activities and establish offshore sales and operational facilities.
“We are very encouraged by the strong level of support shown by both new and existing investors for the placement,” said Andreas Schwer, Titomic Chairman. “It validates the strategic reset of Titomic as we focus on the commercialization of the market-leading Titomic kinetic fusion (TKF) technology through seamlessly integrating custom CSAM systems into partner supply chains, and preparing to scale globally with JV partners in aerospace and defense, with shared risk and rewards.”
Titomic’s TKF technology
TKF is Titomic’s proprietary take on the cold spray additive manufacturing process which works by jetting metal powders out of a nozzle at supersonic speeds onto a solid substrate below. Since no heat energy is involved in the process, the powder deposits rely on the kinetic energy of the jetstream to fuse to the solid part being printed.
TKF is known for its excellent build rates of up to 75kg per hour and its capability to produce large parts. According to Titomic, its customers can also see material waste reductions of up to 80 percent compared to traditional machining methods.
Titomic co-developed TKF in partnership with Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), and retains exclusive rights to commercialize the process when used with titanium alloy powders. To this end, TKF has been widely used for applications in the aerospace and defense sectors, such as flight-ready aircraft parts and high-performance rocket components.
In August, Titomic was awarded a $2.3 million grant from the Australian Government’s Modern Manufacturing Initiative (MMI), which it will plow into the series production and commercialization of the low-carbon satellite and space vehicle parts it has been developing.
Details of the share placement
A share placement is when new equity shares are issued to individual investors, corporate entities, or small groups of investors in order to raise capital. Typically undertaken to fund company growth, share placements increase the amount of shares in issue and dilute the number of existing shareholders.
Titomic has received binding commitments from professional and sophisticated investors to raise $9 million via its share placement, which it says was strongly supported and oversubscribed.
Under the placement, approximately 34.6 million shares will be issued at a price of $0.26 per share, reportedly a 15 percent discount on the five-day volume weighted average price (VWAP) of its shares traded on the five days prior to entering a trading halt on 13th October. The shares are expected to be issued next week on Thursday 21st October, 2021.
Subscribers participating in the placement will be issued attaching options on a one-option-for-one-share basis, which give shareholders the right to convert the options to shares at a certain price within a set timeframe. In this case, the attaching options offer an exercise price of $0.40 with a two-year expiry.
These attaching options will also carry bonus options, so for every attaching option exercised a further option will be offered with expiry on 30th June, 2024, and at $0.60. All of the attaching options laid out will be issued at the company’s AGM on 29th November, 2021.
The share purchase plan
Alongside its share placement, Titomic is also offering eligible shareholders the opportunity to take part in a share purchase plan. Shareholders can subscribe for up to $30,000 worth of shares in the company at $0.26 per share without having to pay brokerage or other transaction costs.
According to Titomic, this represents a 10 percent discount on the last traded closing price of its shares on the ASM on 12th October, 2021, and a 15 percent discount on the five-day VWAP up to 13th October, 2021.
The company is seeking to raise up to $2 million through the share purchase plan, through which it is offering up to 7,692,307 shares. Shareholders will be eligible to take part in the share purchase plan as long as they registered as a holder of shares by 5pm ADST yesterday, and if they have a registered address in Australia or New Zealand.
In total, Titomic is hoping to raise around $11 million through both its share placement and share purchase plan. The company will use the funds to accelerate its commercialization through investing in joint ventures, as well as establishing offshore sales and operational facilities, and to fund its working capital.
“The need for Titomic’s technology is growing as the manufacturing industry undergoes major structural shifts with companies reducing product development timelines and re-examining production methods,” said Schwer. “3D printing is likely to either completely replace traditional specialized component manufacturing or become an additional production technology for aerospace and defense components needed in faster design and production schedules and with faster manufacturing and replacement times. Titomic is ideally placed to meet that need.”
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Featured image shows the Titomic Kinetic Fusion 3D printer at Formnext 2018. Photo by Michael Petch.
