C103 alloy qualification completed ahead of schedule and announcement of partner identity. This was expected but is a further derisking of the company's business plan.

Amaero Completes Qualification of Niobium C103 with ADDMAN

Amaero completes qualification of C103 AM powder to ADDMAN Group and its subsidiary Castheon’s technical specifications.

Positions Amaero as the largest capacity and most responsive U.S. domestic producer of C103, refractory and specialty alloy powder for additive manufacturing.

Amaero’s successful qualification of C103 AM powder triggers ADDMAN’s offtake obligation with 0.25 tonnes expected to ship in CY2024 and 2.0 tonnes expected to ship in CY2025.

The qualification commences a five year preferred supplier agreement whereby Amaero will be the primary supplier of C103, refractory and titanium alloy AM powder to ADDMAN Group and its subsidiaries, including Castheon and Keselowski Advanced Manufacturing. Expected future sales are material to Amaero’s revenue; moreover, the attributable revenue is a key assumption underpinning Amaero’s expectation that it will achieve EBITDA breakeven in FY2026. 

Investor presentation and financial guidance update. CR incoming. $12M in the bank and an estimate of $43M needed for FY25, $206M MC. SP has fallen back from near 50c highs to 35c and I would expect further falls following today's announcement.

Strategy built on subsidised electricity price, reshoring of manufacturing to the US, securing government grants and Defence contracts, focus on high-value C103 and Ti64, cost savings in additive manufacture for high-end products and successful testing of C103 powder which appears to be a longer time frame than expected.

Company estimates that capital expenditures over 3-year period of FY2024 to FY2026 to equal $71.5 million; prior estimate was $71.3 million. $7.4 million of expenditures budgeted for FY2024 have been deferred to FY2025. • Company estimates that EBITDA breakeven to be achieved in FY2026; prior estimate was CY2025.

Company now expects that EBITDA breakeven will be achieved in fiscal year 2026 (six months later). The estimate assumes that the company achieves qualification of C103 prior to end of 2 nd quarter of FY2025; moreover, the estimate attributes revenue to the offtake and preferred supplier agreement, to scaling production of 1st atomizer over calendar year 2025 and to commercial demand pertaining to isostatic powder pressing (IPP) manufactured components.

Only after qualification is achieved, counterparty is required to take 2.25 tonnes of Amaero’s C103 AM powder (expected in late CY2024 and CY2025) • If qualification is achieved, agreement will run five years with additional opportunities for further supply of AM powder (beyond the initial 2.25 tonnes)

C103 powder prices are ~20x greater than Ti-64 powder prices; Ti-64 prices are ~5x greater than stainless

The synergy of this high performance alloy with AM not only enhances the design and functionality of critical components but also provides cost savings and environmental benefits.”

Additive manufacturing can reduce traditional manufacturing buy-to-fly ratios of 40:1 for machining and 15:1 for forging to below 1.5:1 • Implementation of additive manufacturing results in significant design and manufacturing process efficiencies

Milestones

Ship C103 powder for testing

Achieve C103 qualification; disclose offtake and preferred supplier agreement counterparty

Order Atomizer #3

Commence commercial sales of C103, specialty and titanium alloy powder; manufacture developmental refractory alloys

Deliver multi-ton HIP-manufactured components and commence revenue scale

Commission Atomizer #2

Complete Phase 1, 2 and 3 improvements to Tennessee manufacturing and HQ facility

Secure 1st U.S. government grant and advance other grant opportunities

Advance collaboration with preferred supplier partner

Advance collaboration with U.S. DoD-funded labs

US ownership moves to 50% +if all options are taken up which opens up US govt grant options.

Held in SM and RL.

Atomiser Commissioning Completed Ahead of Schedule. Good to see things progressing ahead of schedule (original Jun30). You can see the strategic direction but it is such a shame that this tech couldn't have been kept in Australia considering some of the hypersonic testing has been done at Woomera.

Installation and testing of atomiser in accordance with technical specifications in Purchase Agreement have been completed and Acceptance Agreement has been duly executed.

Amaero’s technical and manufacturing team will commence proprietary modifications of the atomisation process and optimization of the operating parameters on 3 June.

Final commissioning of the atomiser is an important step toward C103 and specialty alloy powder production and toward the expected achievement of qualification.

“This is an important achievement for Amaero and an important step towards addressing gaps in the U.S. domestic supply chain. Given the importance of advancing priority hypersonic and strategic missile programs from development and demonstration phases to serial production as quickly as possible and the pressure to achieve material properties and performance criteria, additive manufacturing plays an important role. The insertion of additive manufacturing in high-temperature applications is enabled by improved resiliency, scalability and responsiveness of U.S. domestic production of C103 and specialty alloy powders. Amaero is committed to collaborating with the U.S. government, the Department of Defense, prime defence contractors and suppliers to address priority initiatives to reshore strategic industrial base capabilities.” 

Held in RL and SM

RAAS flash comment on the raise. "We anticipate that the next significant milestone for the company will be the release of the Fairmont Consulting Group’s review of the company’s business model early in the New Year. 

Our expectation is that Amaero will deliver revenue from FY25, profitability from FY26, and achieve “at capacity” earnings in H2 CY28. Our forecasts anticipate Amaero will opt to produce a range of powders, first C103, followed by specialty alloy and Ti64 titanium powder. Our modelling has incorporated only three gas atomisers as per 3DA’s commentary, despite having capacity in its Tennessee facility for five. A decision to add additional gas atomisers and/or to focus entirely on C103 or a mix of C103 and specialty powders would have a significant impact on our forecasts. 

Retail investors left out of CR for US facility. Looks like a takeover on the cheap as Pegasus moves closer to a 50% stake.

Amaero secures firm commitments from new and existing institutional and sophisticated investors to raise A$10 million

Subscription price at A$0.1600 per share, representing a 15.8% discount to the last traded price on Thursday, 16 November 2023 and a 18.3% discount to the 5-day VWAP

Funds raised will be used for the Tennessee facility fit out and purchase of capital equipment

Pegasus Growth Capital leads the two-tranche Placement with A$4 million commitment. Increasing shareholding to 45% and 47% after options taken up

In addition to Pegasus, the financing had broad participation from the Board of Directors and from senior management. Further, an investment fund at Wilson Sonsini Goodrich & Rosati, a premier and pioneering law firm that specialises on emerging growth businesses, participated in the financing

Free attaching unlisted options exercisable at A$0.2400 per Share and expiring on the date that is 3 years from the issue of those options,

The Company proposes to use the proceeds from the Placement as follows: Facility fit-out A$5,680,000 Capital equipment A$4,320,000

Reading the EGM documentation an issue of 62M shares which is a dilution of nearly 60% for an input of 14% of market cap.

Disc small holding in RL

First atomiser being dedicated to C103 Niobium alloy for Hypersonic applications closely tied to defence. Investor presentation and briefing tomorrow.

For the past nine months, Amaero has described the opportunity in alloy powder production as “titanium and specialty alloy powder;” yet, we have provided financial guidance based on solely producing titanium alloy powder. Based on the critical need for refractory alloy powders for hypersonic applications, we will now dedicate production of the first atomiser to C-103. The Niobium alloy’s high performance and heat-resistant properties are utilised in hypersonic and space applications. The determination of production priority and production mix is a direct response to the industry’s demand pull. The production of C-103 powder is expected to be beneficial to the Company. We look forward to updating investors and taking questions.”

Speculation (Bloomberg confirmed steel AM trial) that Apple is moving to additive manufacturing using binder jetting technology which uses powder sprayed with a binder then sintered for some titanium components. Unlikely to directly involve 3DA but use of AM for mass production will increase demand and their powder will be produced at lower cost.

Both Apple and HP (which has binder jetting technology) are Berkshire holdings.

Making progress. Atomiser plant arrives in Port September 27 to be installed April 24 three months early and they have managed to squeeze it in to the existing building reducing fit out expense by $15M and rent by 30%. Now just need $12 M not $27 M.

Amaero Announces Key Executive Hires for U.S. Leadership. Seem to be good names added to the team.

Amaero Chairman and CEO Hank J. Holland said: “Amaero is fortunate to have attracted some of the pioneering and leading minds in the industry just as the Company shifts its focus to operational execution and excellence. Attracting talent of this caliber to join Amaero at this exciting juncture is another important milestone for the Company. I’m confident that Eric Bono’s longstanding and industry leading experience, along with Fred Yolton’s renown as a pioneer in the industry, Dr. David Schmidt expertise and the collective skillsets of the rest of our existing team, will help Amaero deliver one of the most advanced titanium and specialty alloy powder manufacturing facilities in the world.”

Eric Bono brings extensive experience and relationships in powder metallurgy and additive/alternative manufacturing. Over the past 28 years, Eric has held leadership roles across technical and sales functions for various industry leaders, including 6K, Carpenter Technology, Puris, Summit Materials and Crucible Research. His education includes a Bachelor of Science and a Master of Science in Mechanical Engineering from University of Pittsburgh, and an MBA from Carnegie Mellon. As Amaero’s President and Chief Technical Officer, Eric will lead corporate strategy, project planning / management, process development and equipment procurement for the McDonald, Tennessee facility. Mr. Bono has been nominated to join the Board of Directors, subject to predicate regulatory approval.

Fred Yolton will lead Amaero’s powder metallurgy and materials engineering, including titanium and specialty alloy powder production and consolidated HIP manufacturing. He is a well-respected authority in these specialised industrial sectors. Fred pioneered the development and production of advanced powder metallurgy and invented the atomization process for producing titanium alloy powder. He has published over 50 peer-reviewed papers in the areas of powder metallurgy and advanced materials and is registered as an inventor or co-inventor on 12 patents. Mr. Yolton is a Fellow of ASM International. He received a Bachelor of Science in Metallurgical and Materials Engineering from the University of Pittsburgh.

Dr. David Schmidt will lead Amaero’s simulation-driven design and computational analysis efforts. Dr. Schmidt has over 20 years of invaluable industry experience across aerospace & defense, automotive and power generation. His expertise in blending simulation tools with traditional engineering design will aid Amaero’s alloy powder production, as well as its manufacturing of near net shape parts via consolidated hot isostatic pressing. Dr. Schmidt received a PhD in Computational Mechanics from Carnegie Mellon University and Bachelor of Science and Master of Science degrees in Civil Engineering from University of Pittsburgh.

Amaero on a big profile push with coverage on Share Cafe and Research as a Service resulting in a bump in the SP and a speeding ticket.

RAAS update gives a valuation of $0.85 fully diluted. Predicting July 25 as revenue start from Ti production. CY26 for profitability.

Key hires and capital funding arrangements coming

Like musical chairs and now we are off to the US! Another pivot in search of subsidies. Cash flow positive in CY26. Not sure how long this will remain listed now. Investor briefing recording

Amaero Green Lights Flagship Titanium Project in the United States Tennessee Location Delivers Financial, Operational and Strategic Advantages. Accelerates Breakeven Operations by 12 months and Reduces Working Capital Need by $22 million.

Amaero will pursue US government funding and incentives that target re-shoring advanced manufacturing and critical materials supply chain

Amaero continues to have strong relationships in the UAE and will pursue “offset credit” funding for other strategic projects 

The “nearing completion” facility in Tennessee will reduce the required working capital for the same 3-year period to $56 million and we expect to be cash flow positive in 2026.

JV signed, some details and wait till Q3 23 for more. Possible revenue from the licensing agreement of IP. 3d printing mentioned and an expansion of the gas atomisers to include aluminium, copper and superalloys. Considering the original forecast was for $40M revenue pa from Titanium this could become a big company if the JV gives 3DA a fair deal. Clearly the review gauged that the energy, labour and funding situation in AUS would not allow such an aggressive approach but a great shame that this opportunity just gets licensed overseas and most of the earnings going with it to UAE and US.

Disc: hold a small parcel in RL

As well as additive manufacturing and powder production, the JV will pursue an ambitious strategy to vertically integrate the titanium supply chain including titanium sponge, melt, mill and forge operations

The JV company, FALCON Advanced Metals PLC (FALCON), will be a 50/50 partnership between the two companies and will operate as a holding company that controls and owns directly and indirectly subsidiaries that will undertake projects. The partners will contribute working capital on a pro-rata basis.

Amaero will contribute goodwill, reputation and expertise. A licensing agreement is expected to be signed between FALCON and Amaero for IP and know how in respect of the JV.

The project under consideration by the JV has a capital budget of A$300 million. The integrated project includes:

• An Applied Engineering, Design and Commercialisation Centre;

• Large format 3D printing; and

• Large scale metal powder production that would include seven gas atomisers – four dedicated

to titanium and three atomisers for aluminium, copper and superalloys.

Hank Holland, Amaero’s Chairman and CEO said: “After spending three months in the UAE and countless hours with our partners, I couldn’t be more excited about embarking on the next chapter of Amaero’s growth and development with Rabdan Industries. Our partner brings deep knowledge and relationships in the UAE, as well as in the Kingdom of Saudi Arabia. Moreover, FALCON Advanced Metals’ capabilities and growth strategy closely align with the UAE’s priority economic and industrialisation initiatives.”

I feel like valuable Australian IP has just been stolen. Pegasus gets to buy out the company for peanuts. How can this be in Australias interest to lose valuable materials manufacturing capability?

Share price has tanked, a CR at historic lows with little incentive for existing shareholders to get on board other than a 38% dilution if you don't. 6% of the raise + options going to the underwriter which happens to be the largest shareholder, all operations being moved overseas. Then only 50% ownership of the new JV(incorporated in Abu Dhabi) with the UAE company and further raises of $78M and $290M total with no projections for revenue.

JV Term Sheet The key points of the Term Sheet relating to the joint venture are summarised below: • The joint venture company (JVCo) will be incorporated in Abu Dhabi. • JVCo’s ownership will be held 50% by the Company and 50% by the JV Partner. 

Issue Price of $0.067 Per New Share with 1 free attaching New Option for every 1 New Share issued (The exercise price of the New Options is $0.18 each, 3 yr expiry)

$750K of $10.5M are costs of the raise, 2% management fee, 4% underwriting fee + 1 option /5 shares issued all going to the largest shareholder $630K,$120K other costs, $2.9M of the raise used for restructuring costs. $6.8M for operating costs.

The Directors have considered the matters outlined in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings, because the proposed future operations of the Company do not have an operating history from which reliable forecasts can be made. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

The maximum total number of New Shares proposed to be issued under the Offer is approximately 156,716,418 which will constitute 37.91% of the Shares on issue following completion of the Offer

50% take up would change Pegasus holdings from 14.55% to 33.5%

Disc: small parcel held in RL

Looks like the whole company is going to move to the UAE and be US funded. No mention of 3D printing or Australian operations.

Amaero will embark on the next phase of its strategic review which includes comprehensive assessment of the Company’s geographical footprint, staffing and commercial projects. 

Fully Underwritten Renounceable Entitlement Offer to raise up to A$10.5 million, priced at A$0.067 per share representing a 10.7% discount to the last traded price on Friday, 28 October and a 18.6% discount to the 5-day VWAP •

The Entitlement Offer is fully underwritten by PAC Partners Securities which has entered into a sub-underwriting agreement with affiliate of major shareholder Pegasus Growth Capital (Pegasus) whereby Pegasus has agreed to sub-underwrite the Entitlement Offer to the amount of A$10.5 million

Amaero has signed a non-binding term sheet to form a joint venture with United Arab Emirates (UAE)-based strategic partner, Technology Holding Company LLC, an affiliate of Ethmar Holdings, for the production of titanium, aluminium and super alloy powders in the UAE

Joint Venture Funding

It is also anticipated that the JVCo’s capital investment will be funded by a U.S. defence offset obligor (Strategic Funder) working in cooperation with the UAE offset program administrator (such funding being subject to the approval of the UAE offset program administrator). It is anticipated that the equipment and inventory funded by the Strategic Funder will be conveyed to and wholly owned by the JVCo.

The estimated cost for capital investment (facility improvements, equipment and inventory) is approximately A$290,000,0001 , which is expected to be funded by the Strategic Funder. The Joint Venture working capital will be initially funded by a pro-rata equity contribution made by both Amaero and the JV Partner. It is estimated that approximately A$78,000,0002 of working capital will be required over the first three years of the JVCo. Any subsequent working capital funding would be sought by way of asset-backed debt.

JVCo Business

JVCo’s business will be the large-scale production of advanced alloy powders. It is expected that the business will be operated from a green field purpose-built facility (or an existing re-purposed building) in a mutually agreed industrial zone in Abu Dhabi. It is anticipated (however not confirmed that) the facility will be commissioned and operational by the end of 2023, with commissioning of additional powder capacity production through 2026. 

What a shocker of a strategic revue. SP down 28%. US based private equity firm Pegasus Growth Capital takes over. Not focusing on 3d printing and not making Titanium powder in AU despite taking out a lease on a location. As a result, it is no longer anticipated that Amaero will become cash flow positive in CY2023. (after projecting 40M revenue)

In terms of the Company’s Fletcher Insulation, Rio Tinto and Boeing projects, these projects are continuing but are not anticipated to produce significant revenue in the near term.

As a result of the strategic review undertaken:

o Amaero will not proceed with the titanium powder manufacturing facility in Victoria, Australia

o The Board is taking active steps to pursue alternative opportunities for titanium powder production with Mr Holland exploring a number of opportunities in the Middle East over the past four weeks

o The Board has determined that Amaero’s operations will be primarily focused on titanium powder production

Hold a small parcel in RL not worth selling will hold and see if anything comes of the titanium powder production

Big loss as expected. Looks like some questions will be answered in the strategic review due in October. Wording suggests more capital raising to come. Mention of Fletcher Insulation project for the first time in a while.

Revenues increased by 13% to $569,834 compared to previous corresponding period (pcp); Amaero reported a net loss of $8.62 million (FY21: $6.99 million), with an increase in R&D a major part of the increase in the loss. R&D was predominantly focused on the atomisation process, aerospace materials, machine development and development of tooling technology for the Fletcher Insulation project.

Board and executive leadership have commenced a strategic review of Amaero’s operations, business development opportunities and allocation of capital:

In light of the delay of the powder manufacturing facility and the uncertainty of timing of Middle East opportunity, the review will include funding needs

Board and executive leadership plan to provide an update to the market prior to the September quarterly report, due at the end of October

28% increase yesterday off a 52 week low following an Investor presentation and an announcement "Amaero has engaged Guggenheim Securities to assist in the evaluation of strategic alternatives."

I missed the webinar but appears to be seeking US capital possibly via SPAC.

@Hogajo identified a few concerns when the quarterly came out a month ago. The half year report doesn't give any more confidence. Cost of $214K sales was $376K! Middle East face to face meetings still planned in March. At least the Ti powder plant is on track.

• Committed to build an $8 million customised and proprietary Titanium Alloy Powder Manufacturing Plant

" project management plan for the manufacture of equipment is on time and within budget. The project is on track to finalise construction and commencement of commissioning which are both expected in 3Q CY2022."

 A fivefold ramp up of additional gas atomisers with commensurate revenues is expected by 2025.

Cash reserves of $4,967,862 so raise coming soon.

ACTIVITIES SUBSEQUENT TO 31 DECEMBER 2021 

Amaero’s US operations received a purchase order totalling ~US$100,000 from Oceaneering International Inc. (NYSE:OII). Oceaneering is a subsea engineering and applied technology company based in Houston, Texas, that provides engineered services and hardware to customers in the marine, space and other sectors. The purchase order is for a development project for space applications involving aluminium 3D printed components and test specimens.

3Q of funding left with Ti powder plant commissioning due in Q3 suggests a raise is coming.

Revenue of 134K against a cash outflow of 1.9M even with a 22% reduction in costs.

Delays to ME project put down to travel restrictions seems a bit dated, personal meetings due in March puts any revenue quite a way off. Progress on other projects.

December quarter highlights:

Heads of Agreement secured with Gilmour Space that will lead to a long term supply agreement expected to deliver total revenues of ~A$1.7 million

Positive test results for spinner tools for the Fletcher Insulation project and good progress with Rio Tinto with the first batch of billets atomised and being tested

Revenues increased 21% quarter on quarter (qoq) to $134,388; Amaero continues to focus on progressing key projects to deliver increased revenues

 Operating costs fell 22% qoq to $2.064 million due to a significant drop in manufacturing, corporate and administration costs

Progress with Fletchers Insulation and Rio Tinto projects

Amaero recorded positive test results for its spinner tools for the Fletcher Insulation project during the quarter, with the spinner tools performing well within Fletcher’s required performance standards.

Also during the quarter, one of Amaero’s SP400 3D printing machines was built for the project with commissioning beginning in January.

The High Operating Temperature Aluminium Alloy (H.O.T Al) project with Rio Tinto is also progressing well, following freight delays causing project timing slippage earlier in 2021.

The first batch of Rio Tinto’s alloy billets has been atomised into powder and testing has commenced. In addition, the second shipment of Amaero H.O.T. Al was dispatched from Rio Tinto during the quarter.

Proposed Middle East 3D printing centre

Amaero is making progress with virtual meetings on the project agreement for the proposed Middle East centre for additive manufacturing. In person meetings are also expected to be conducted in March, subject to international travel restrictions.

Amaero executes LOI with Australian Missile Corporation

In December, Amaero executed a letter of intent (LOI) with Melbourne based Australian Missile Corporation (AMC) to explore opportunities to support of the accelerated establishment of a Sovereign Guided Weapons and Explosive Ordnance (GWEO) Enterprise in Australia.

AMC is a subsidiary of NIOA, a 100% Australian?owned Defence Prime specialising in the provision and support of weapon systems and integrated soldier systems.

The LOI follows AMC’s proposal to the Federal Government following a request for information for the establishment of the GWEO Enterprise. The proposal provided feedback and advice on how a Sovereign GWEO Enterprise could be established and operated, including proposed commercial model options and identified several areas that could accelerate Enterprise establishment.

Boeing Purchase Order

During the quarter, Amaero received a Purchase Order totalling $50k from Boeing for a defence aircraft Independent Research and Development (IRAD) project.

As @jwrostagno27 said things are moving slowly and the language is quite a bit more conservative

Lease secured for titanium powder plant

• Ten-year lease secured for a 3,857 sqm facility in the Monash Precinct

• Additional works to begin in January 2022 to prepare for the installation of the titanium powder facility

• The additional works include the construction of a 600sqm warehouse extension high bay to accommodate Amaero’s first gas atomiser for the plant

• The project is expected to provide Amaero with a strong revenue and profit stream of ~A$40.8 million per annum

• Amaero expects construction to be finalised and production to commence in 3Q

CY2022; ramp up of additional gas atomisers and revenues expected over the next few years

• Plant expected to position Amaero as a supplier of choice for defence, aerospace and critical manufacturing segments in allied nations

Disc: small hold in RL

3DA has had a couple of recent announcements which start to show some significant progress toward taking a strong position in specialist manufacturing. Share price has been lagging of late.

HoA will lead to a long-term supply agreement for the manufacture of rocket components for Gilmour Space

The resulting supply agreement will be for a three-year term and is expected to deliver total revenues to Amaero of approximately $1.7 million

Gilmour Space is a venture-backed Australian rocket company which is pioneering

innovative hybrid propulsion technologies that will offer lower cost access to space.

 Production of the components for the supply agreement will commence in FY2022

Also following the announcement of the Boeing manufacturing centre to be built in Queensland https://statements.qld.gov.au/statements/93300

3DA are part of a webinar series supported by Boeing.

https://kapara.rdbk.com.au/landers/994608.html

Australian Additive Manufacturing Forum webinar series for 2021. 

After Boeing and BAE Systems are bringing together the webinar series for this year to continue supporting the Australian Additive Manufacturing Industry. 

Our distinguished speakers for 1st Webinar are :

• Ms. Melissa Orme , VP Boeing AM 

“Additive Manufacturing in Aerospace:  Opportunities and Challenges on the Road Ahead”

• Mr. Nicholas Mule, Director Boeing AM

“Digital Additive Manufacturing at Boeing: The Opportunities and Challenges towards achieving Quality at Scale”

• Mr. Barrie Finnin, CEO Amaero

“Additive Manufacturing of Aerospace Components”

• Doug McPherson, Engineering Manager Memko

“Challenges and Opportunities in the Certification of AM parts for Aviation”

• Mr. Dan Braley , Boeing Global Services AM

“The Future of Additive Manufacturing for Boeing Global Services”