Hang in there boys and girlsJust in the spirit of elevating the...

Hang in there boys and girls
Just in the spirit of elevating the level of discussion, I'll share with you the information based on which I bought the shares back in September. Of course, the SP has down south ever since but I have been buying more averaging down since. My view is that the next few positive announcements will get this baby flying again. The company fundamentals are solid it's only a matter of time

ArchtisLimited (“AR9” or the “Company”) specialises in the design anddevelopment of products, solutions and services for secure information sharingand collaboration. The Company has over 10 years’ experience delivering secureinformation and identity management services and solutions within the highestsecurity levels of the Australian Government.

Overthe past 12 months archTIS successfully won a number of high-profile Governmentclients, including The Aged Care Royal Commission, The Commonwealth AttorneyGeneral’s Department, The Australian Criminal Intelligence Agency and TheCommonwealth Ombudsmen; validating its target government market for Kojensi.

InJanuary 2020, the Company diversified to commercial industries that work withGovernment, with its first wins in the Education and Space sector with CurtinUniversity, and the Defence Industry sector, with Northrup Grumman, a globalmilitary system integrator.

On10^th September2020, the Company announced that the AustralianDepartment of Defence picked archTIS for a $4.2 million deal. Under thecontract, archTIS will lead to risk reduction activity and provide threelicences for its Kojensi platform, a digital database for sharing classifieddocuments.

INVESTMENTRATIONALE:

• Strong Sales Pipeline – the Company’s business development activities across the year resulted in over 350 demonstrations of Kojensi, both locally and internationally. These activities have generated a sales pipeline of over $15 million of opportunities to be executed against in FY2021.
• Acquisition of Nucleus Cyber – On 29^th October 2020, the Company announced that it has entered into a binding term sheet to acquire global information protection business, Nucleus Cyber Inc. The acquisition is highly strategic and transformational for archTIS. Through this acquisition archTIS gains an immediate presence in the key North American market, as well as access to the Microsoft business product suite. This transaction represents a key step in archTIS’ strategy of being the world’s premier provider of policy enforced access control platforms for securing and sharing digital information. The new combined product offering creates increased revenue diversity, greater recurring revenues, and a platform for accelerated growth.
• Strong Capital Structure – In May 2020, archTis raised capital via a $1.65 million placement and $0.6 million share purchase plan to pursue the execution of archTIS sales pipeline across Enterprise and Government sectors. The acquisition of Nucleus Cyber involves cash outflow of up to $9.75 million. The Company updated that by utilising a scrip swap deal, archTIS remains in a strong cash position with ~$4 million cash at hand plus further $1 million cash proceeds expected from exercise of expiring options by July 2021. Cash receipts from customers for the September quarter were $231k (prior June 2020 quarter was $190k). Cash receipts are likely to increase in subsequent quarters as revenue is received from the landmark Department of Defence contract.
• Australian Government funding tailwinds – During the September quarter, the Australian Government committed to the following funding initiatives to mitigate the growing threat to Information and Cyber Security:
• $270 billion of funding to Department of Defence, including $15b over the next decade to cyber and information welfare capabilities
• $1.67 billion over the next decade to Australia’s Cyber Security strategy

Therecent government funding initiatives have substantial information-sharingrequirements that archTIS is well positioned to potentially capture though theKojensi platform, either directly or indirectly to private markets tendering toGovernment. With the successful commercialisation of Kojensi. archTIS haspositioned itself strongly to take advantage of the current economic and marketcircumstances

SinceJuly 2020, the Company has further secured over $5 million of contracts andrenewals including Department of Defence, Northrup Grumman and CurtinUniversity. The Company’s key strategic partnership with leaders such as KPMGand DXC Technologies will further drive archTIS’ growth and scale.

Withproduct-market fit now being established and the reliability of the underlyingtechnology proven, there are many opportunities to continue growing the archTISbusiness in both public and private markets. Expect growth to be organic andfrom selected merger and acquisition opportunities should they arise. Atcurrent levels, we would like to recommend BUY rating on thestock.