Linius Technologies (ASX: LNU) capital raise and board shake-up fuel commercial AI strategy

Linius Technologies Limited has confirmed a new capital raising package totalling AUD 3.3 million, designed to accelerate revenue generation from its patented video personalization technology. The capital injection includes a fully subscribed AUD 350,000 share placement and a newly established convertible note facility with binding investor commitments worth approximately AUD 2 million.

The share placement comprises the issuance of 350 million fully paid ordinary shares priced at AUD 0.001 per share, accompanied by 70 million free-attaching options (exercisable at AUD 0.002 and expiring 30 June 2027). This structure complies with Listing Rule 7.1A, using the 15-day volume-weighted average price (VWAP) and avoiding the need for immediate shareholder approval.

The convertible note facility authorizes issuance up to AUD 3 million in face value. Each note carries a 20% annual coupon—capitalized monthly—and is convertible at a fixed price of AUD 0.001. The first tranche involves AUD 350,000 in convertible notes, while the second tranche, pending shareholder approval, includes a further AUD 2.65 million. Notably, approximately AUD 585,000 in this second tranche stems from directors’ participation, including AUD 500,000 from new appointee Brent Jones.

The new funding replaces the earlier AUD 750,000 note program closed in March 2025, which had raised AUD 350,000. The updated conversion terms—lowered from a floor of AUD 0.002 to a fixed AUD 0.001—reflect current market dynamics and were reportedly more attractive to professional investors.

Why have Andrew Demetriou and Brent Jones joined the board and what expertise do they bring to Linius Technologies?

In a bid to enhance strategic execution and industry credibility, Linius Technologies appointed Andrew Demetriou, former Australian Football League CEO, and Brent Jones, a seasoned financial services executive, to its board on the same day as the capital raise announcement. Their appointments come as the Melbourne-based software firm aims to deepen commercial penetration into the global sports and security video ecosystems.

Andrew Demetriou, best known for his leadership of the Australian Football League from 2003 to 2014, brings significant experience in media rights, sports commercialization, and stakeholder engagement. He currently serves as Co-Chair of the National Basketball League Advisory Board and has held prior roles with Crown Resorts, Capitol Health, and the Bastion Group.

Brent Jones, whose most recent role was as Non-Executive Director of Latin Resources (acquired by Pilbara Minerals in February 2025), has also served as Managing Director of Professional Services at Sequoia Financial Group. With exposure to a broad range of capital market transactions, including mergers, acquisitions, and early-stage funding, Jones adds capital strategy depth to Linius Technologies’ leadership bench.

Both directors have accepted their 2025–2026 remuneration in the form of convertible notes and will also be eligible for up to 45 million zero-exercise-price options each, tied to progressive share price milestones of AUD 0.005, AUD 0.01, and AUD 0.015. These equity-linked incentives are conditional upon shareholder approval and are designed to align board performance with shareholder value creation.

How is Linius Technologies deploying capital to support commercial scaling and SaaS video proof of concepts?

Under the leadership of CEO Ben Taverner, who joined in February 2025, Linius Technologies has sharpened its go-to-market strategy by investing in revenue-generating use cases within sports broadcasting and surveillance. The newly raised funds are earmarked for scaling its sales force—where four senior hires are underway—and supporting ongoing proof of concept (POC) initiatives with potential high-value clients.

Among these engagements is a paid POC with a major European sports league, which is testing the company’s Video Virtualisation Engine platform. Although current revenue contributions from these POCs are not material, Linius Technologies expects them to mature into longer-term commercial contracts, especially given the traction it is seeing in the security sector with video surveillance SaaS providers.

By focusing capital toward sales and client onboarding, the Australian technology company is aiming to compress its timeline toward cashflow breakeven. Management also highlighted ongoing cost-control efforts, including restructuring and non-cash director compensation, as a foundation for sustainable financial performance.

What is the potential dilution from the convertible notes and how are existing shareholders affected?

While the capital raise strengthens Linius Technologies’ cash runway, it also introduces a substantial dilutionary effect if all notes are converted. The AUD 350,000 placement increases total shares on issue to approximately 6.5 billion. If all 3 million convertible notes—including AUD 480,752 issued in lieu of directors’ fees—are converted along with accrued interest, this could result in the issuance of up to 5.19 billion additional shares.

This represents a potential 44.4% dilution based on current outstanding shares. The initial tranche alone, assuming full conversion and interest capitalization, would result in 522 million shares—approximately 7.4% dilution.

The notes are unsecured but include prohibitions on asset encumbrance outside the ordinary course of business. Linius Technologies also retains rights for early redemption or forced conversion 12 months post-issuance, providing optionality to manage equity overhang risks.

How is Linius Technologies’ share performance, capital position, and investor sentiment shaping future prospects?

Linius Technologies remains one of the lowest-priced stocks on the Australian Securities Exchange, trading at AUD 0.001 with a 52-week range of AUD 0.001 to AUD 0.003. The market capitalization, currently at AUD 6.15 million, reflects a 33.3% one-year share price decline, underscoring historical investor caution despite recent operational progress.

However, institutional sentiment appears to be cautiously optimistic. The participation of existing shareholders and directors in the convertible note facility, coupled with a still-undrawn AUD 1.5 million standby equity facility with Eli Capital, suggests some backing for the revised execution roadmap.

Chairman Gerard Bongiorno emphasized that the board is now squarely focused on value creation, noting the importance of converting early commercial momentum into stable cashflows. Analysts and investors alike will be closely monitoring the outcome of the sports league POCs and any follow-on commercial contracts emerging from these engagements.

What is the future outlook for Linius Technologies and how is the company positioning itself in the AI video space?

Looking ahead, Linius Technologies aims to build on its differentiated architecture that enables real-time personalization of video via its Video Virtualisation Engine. By converting conventional video files into lightweight, searchable data streams enriched with artificial intelligence and machine learning, the platform positions itself as a solution for content monetization across broadcast, streaming, and surveillance markets.

While the current focus is on sports and security sectors, the long-term vision involves broader adoption across content-heavy enterprises such as news, education, and media archiving. The ability to integrate Linius’ solutions into existing cloud infrastructure provides scalability and interoperability that could be appealing to potential partners or acquirers.

The firm’s roadmap includes further expansion of its commercial sales team, onboarding of more proofs of concept, and strategic efforts to reach operating breakeven. If these initiatives succeed and POCs translate into recurring contracts, the Australian software firm could begin to reposition itself from a speculative microcap to a revenue-generating SaaS player.