Additive manufacturing company Titomic (ASX: TTT) has come out of a trading halt to reveal a binding agreement with Australian research and development company Composite Technology, a commercialisation division of a global defence product manufacturer.
According to Titomic, the contract is set to generate $25.5 million in sales from the provision of two its Titomic Kinetic Fusion (TKF) systems for industrial-scale metal additive manufacturing.
The additive manufacturing company says its proprietary system is currently the world’s fastest metal additive manufacturing process, with the ability to produce at 75kg per hour.
Titomic’s TKF system will be integrated into Composite’s current process to establish more effective and sustainable manufacturing solutions.
Composite founder Anthony Khouri said the integration of technologies will increase its capacity to develop components and other products for the defence sector, which would offer “significant revenue opportunities” for both parties.
Under the terms of the agreement, Composite will provide certified products and component parts for the global defence market including the production of replacement parts for NATO units including quality assurance, design and development applications.
The TKF manufacturing process will be certified in conformance with approval for Composite to deliver defence products to the global defence market.
Titomic noted Composite required two years of extensive research and extensive prototyping to guarantee the fulfilment of quality assurance requirements for the design, development and production capability of the TKF manufacturing system.
The $25.5 million sales contract announced today, therefore, represents the result of commercialisation of Titomic’s previous R&D efforts and will “open up further large revenue opportunities” with strong industry partnerships in high-margin industries such as the defence sector, the company said.
As part of the binding agreement, Composite will receive 7.5 million Titomic options upon entering into a joint cooperation agreement that will develop certified manufacturing processes for defence-related products with the TKF manufacturing systems for industrial-scale metal additive manufacturing.
Furthermore, as part of the cooperation agreement, Composite and Titomic said they intend to jointly develop “new material technology and manufacturing process IP” that will “exclusively utilise” TKF manufacturing systems for defence products.
Composite stands to receive an additional 7.5 million Titomic options in exchange for providing certification and quality assurance for products manufactured using TKF.
“This is a significant milestone for Titomic, on signing this sales contract with Composite further validates the exceptional work the staff at Titomic have achieved in creating the world’s largest and fastest metal additive manufacturing TKF systems,” said Titomic’s managing director Jeff Lang.
“I would like to thank the Composite team, and founder Mr Khouri, for partnering with Titomic to purchase and implement our TKF systems for the sustainable metal manufacturing of their products for the global defence market,” Mr Lang added.
Cashed up after oversubscribed capital raising
As well as the $25.5 million sales contract with Composite Technology, Titomic has added $19 million to its coffers via an oversubscribed private placement.
Titomic made the placement to existing and new institutional and international long-term investors, which scooped up 23.75 million shares at $0.80 each.
The company will also offer eligible shareholders the ability to participate in a $1 million placement at the same price of $0.80 per share.
Proceeds from both will be used to expand its capabilities at the existing Melbourne Bureau production facility, along with growing its business and establishing offshore operations.