Advanced Systems Automation Limited Announces Major Debt-to-Equity Swap with Advance Opportunities Fund I

Key Highlights

• Debt Settlement: ASA to settle S\$2.0 million debt by issuing 555,555,555 new ordinary shares at S\$0.0036 per share to Advance Opportunities Fund I (AOF I).
• Significant Shareholding Change: AOF I’s stake will rise from negligible levels to approximately 25.02%, making it a controlling shareholder.
• Shareholder Approval Required: The transaction is subject to specific shareholder approval at an upcoming EGM.
• Discounted Share Issue: Shares issued at a 16.28%–32.08% discount to recent market prices.
• No Cash Proceeds: This is a non-cash transaction—no new cash will flow to ASA, but liabilities will decrease.
• Outstanding Debt Remains: Post-transaction, ASA will still owe AOF I S\$0.3 million and over S\$307,000 in accrued interest, with interest to accrue until full settlement.
• No Adjustment to Warrants: Existing warrant holders will not see changes in exercise price or number of warrants.
• Financial Impact: The swap will reduce net tangible liabilities and lower loss per share, boosting balance sheet metrics.
• Cautionary Statement: Transaction subject to several conditions—investors advised to exercise caution.

Detailed Report

Advanced Systems Automation Limited (“ASA” or “the Company”) has announced a substantial debt-to-equity swap agreement, marking a pivotal development for the company’s financial structure and shareholding profile.

Transaction Structure

ASA will issue 555,555,555 new ordinary shares at S\$0.0036 per share to Advance Opportunities Fund I (“AOF I”) in full satisfaction of S\$2.0 million owed to AOF I. The swap is part of a broader debt settlement arrangement relating to previously issued redeemable convertible notes and follows several prior announcements and negotiations.

Shareholding Changes – Controlling Shareholder Emerges

Upon completion, AOF I’s shareholding will surge from a nominal 65 shares to 555,555,620 shares, representing 25.02% of ASA’s enlarged share capital. This will make AOF I a controlling shareholder under the SGX Catalist Rules, which is a major shift and could affect control, strategy, and governance at ASA.

Shareholder Approval & Regulatory Compliance

• The allocation of shares at a discount, the transfer of controlling interest, and the issuance outside the general mandate all require specific shareholder approval at an EGM.
• No prospectus will be issued as the shares are offered under Section 272B of the Singapore Securities and Futures Act.
• AOF I and its associates will abstain from voting on resolutions related to the swap.

Pricing Details and Rationale

The issue price of S\$0.0036 per share is at a notable discount to recent volume weighted average prices, reflecting arm’s length negotiations and prevailing market conditions. The discount is substantial—16.28% to the VWAP on the last full trading day before the agreement and 32.08% to the VWAP for the two days straddling the agreement’s signature.

Financial Effects

• Share Capital: Will increase from 1,665,144,341 shares (S\$169.9 million) to 2,220,699,896 shares (S\$171.9 million).
• Net Tangible Assets (NTA) per Share: Improves from negative S\$0.80 cents to negative S\$0.51 cents.
• Loss per Share (LPS): Improves from S\$1.33 cents to S\$0.67 cents, assuming the swap was effective at the start of FY2024.
• Outstanding Debt: After the swap, ASA will still owe AOF I S\$0.3 million principal plus S\$307,109.27 accrued interest, with further interest accruing until repayment.

Other Notable Details

• No Placement Agent: The swap was negotiated directly between ASA and AOF I.
• No Changes to Warrants: Holders of the company’s 624,000,546 outstanding warrants will see no adjustments as a result of this transaction.
• No Director/Substantial Shareholder Conflicts: ASA directors and substantial shareholders have confirmed no material relationships with AOF I outside its shareholding.
• Inspection Rights: The Debt-Equity Swap Agreement is available for inspection at ASA’s registered office for three months.

Price Sensitive Elements and Risks for Shareholders

• Change in Control: The emergence of AOF I as a controlling shareholder could result in strategic, operational, or governance changes at ASA.
• Large Dilution: Existing shareholders will see their percentage ownership diluted by over 25%.
• Discounted Share Issue: The large discount to market price could affect market perception and share price performance.
• Outstanding Debt Remains: ASA continues to carry significant liabilities to AOF I, with the fund reserving the right to demand payment at any time.
• Transaction Conditionality: The swap is subject to several regulatory, shareholder, and board approvals, and may not occur if conditions aren’t met by 31 March 2026.

Next Steps

ASA will issue a circular with further details and convene an EGM for shareholder approval. The company will also apply for the listing and quotation of the new shares on the SGX Catalist Board.

Investors and shareholders are strongly advised to monitor further announcements and exercise caution given the potential changes in control, dilution, and ongoing negotiation over the company’s remaining debt.

Disclaimer

This article is prepared for informational purposes only and does not constitute investment advice. All information is based on the company’s public announcement as of 8 January 2026. The proposed debt-to-equity swap is subject to regulatory, shareholder, and other approvals and may not proceed as described. Investors should consult their financial advisers and consider all risks before trading or making investment decisions related to Advanced Systems Automation Limited.

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