Edge Total to acquire Austral's digital tech division

Executive Summary

• EdgeTI has entered into definitive agreements to acquire Austal Australia's digital technology division in an all-share transaction valued at approximately $6.08 million CAD.
• Austal Ltd. will receive approximately 6.08 million subordinate voting shares (SVS) in EdgeTI, representing a 9.9% ownership stake on a non-diluted basis, with no warrants issued.
• The acquisition includes key software platforms (aviation planning, LUSI, enterprise asset management) and key personnel, aiming to expand EdgeTI's defense-grade digital capabilities and support a planned uplisting to the Nasdaq or NYSE within 12 months.

Key Details

• Transaction Structure: All-share transaction; Austal receives equity in EdgeTI with no warrants issued.
• Consideration & Valuation: Deemed price of $1.00 per share; total purchase price of approximately $6.08 million CAD.
• Equity Issuance: Austal to receive approximately 6.08 million SVS, resulting in a 9.9% ownership interest on a non-diluted basis post-closing.
• Anti-Dilution Provision: If the proposed uplisting to the US occurs, Austal will be issued additional equity securities without additional consideration to maintain the 9.9% interest.
• Assets Acquired:
  • Planning software product focused on aviation applications.
  • Branched LUSI solution.
  • Enterprise asset management software suite focused on marine applications.
  • Other minor software products focused on workflow and automation.
  • Selected key software platforms, domain expertise, and long-standing customer relationships.
• Financial Impact & Revenue:
  • Multiyear master service agreement with Austal expected to deliver $4.1 million (Australian) in annual recurring revenue (ARR).
  • Projected gross margin associated with expected ARR of approximately $1.0 million (Australian).
  • Potential additional upside from additional Statements of Work (SOWs).
• Strategic Goals:
  • Expand EdgeTI's defense-grade digital capabilities and operational scale.
  • Establish a path toward a proposed uplisting to the Nasdaq or New York Stock Exchange within approximately 12 months.
  • Permanent ownership of transferred software is contingent on the completion of the uplisting transaction.
• Conditions Precedent: Approval of the TSX Venture Exchange and the Australian Securities Exchange.
• Other Terms: No debt acquired; no finders' fees payable; transaction is not a non-arm's-length party transaction.

Notable Quotes

• Paddy Gregg, CEO of Austal: "This partnership allows EdgeTI to continue to develop its operations while supporting Austal in continuing to deliver technological capabilities to its key customers and aligns us with EdgeTI as a long-term strategic partner positioned for global growth."
• Jim Barrett, CEO of EdgeTI: "We are excited to welcome the Austal digital technology team and their proven platforms into the EdgeTI family. This strategic fit merges our real-time operational software with their deep defence domain expertise to deliver an unmatched digital twin and asset management capability across air and maritime fleets. Together, we are positioned to accelerate growth, broaden our global footprint and advance our highly accretive Nasdaq uplisting strategy."
• Mathew August, Investor: "Through this transaction, EdgeTI reaffirms its commitment to building a self-sustaining, sovereign defence and enterprise technology ecosystem, combining top-tier engineering, allied technology transfer and global market access. This combined entity and the force multiplier nature of the synergies result in an incredible growth enabled platform for growth and support of our customers in their important missions."