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Authorised Investment Fund Limited (ASX:AIY) is a pooled development fund based in Melbourne. It is inclined towards investing in innovative companies, with high potential for future growth across sectors, comprising of pharmaceuticals, energy, solar tech, manufacturing, cyber tech or defence, and SMEs in other sectors.
The company has recently inked a non-binding term sheet for the acquisition of 30% equity stake in SpartaCard Pty Ltd, along with the non-transferable option for the extension of holding to 55%, which when exercised would entitle both AIY and SpartaCard to appoint one nominee to each other's respective boards.
The total monetary consideration for the buy-out is $5.7 million, which includes AIY issuing 19 million shares to SpartaCard in parts. Secondly, in case of no approval from the PDF Board for the issue of AIY Shares to SpartaCard, AIY will extend a cash amount to SpartaCard.
The agreement is subject to various conditions yet to be fulfilled, including the approval from the Board of the Pooled Development Fund (PDF Board), to allow the issue of AIY shares under the proposed transaction. The other conditions include completion of due diligence on SpartaCard, finalisation of documents etc. as detailed in the term sheet.
SpartaCard is an early stage technology company, established in 2018. It is engaged in the development, and commercialisation of products, and services for the cryptocurrency generation. Its flagship product is SpartaCard, which is a ground-breaking technology combining a secure hardware wallet, with transactional capabilities. The strategic investment by AIY in SpartaCard is expected to immensely facilitate the launch of the first ever secure transactional hardware wallet.
Recently, Authorised Investment Fund released its report for the half-year ended December 31st, 2018, affirmed a favourable performance. The companyâs revenue from ordinary activities augmented to $11,549, up by 100% from 31 December 2017. The profit from all operations after tax attributable to members increased, staggeringly by 214% to $74,474 from a loss of $65,580 recorded on 31 December 2017. Moreover, since the last financial year, the net assets of the company have also increased to $ 11.88 million.
In the companyâs cash flow statement, the net cash held at the end of the period was at $587,104. The operating activities resulted in cash burns of $302k mainly due to payments to the suppliers and employees. The investing activities further contributed to cash outflows of around $350k. Also, the financing activities primarily including the capital raised from issuing shares, and options led to a massive cash inflow of $1.136 million.
Recently, AIY notified that it had obtained, a business update from its investor company, e-Mersion.
AIY has a market capitalisation of AUD 42.13 million and ~ 401.19 million outstanding shares. At the closure of the trading session on March 5th, 2019, the AIY stock stood at a market price of AUD 0.087, down by 17.143% from its previous close. The stock of the company performed well in the past three months with a positive return yield of 320%, and so far, AIY has also generated a positive YTD return of 23.53%.
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