AEM Holdings Ltd. Announces Strategic Share Subscription and Warrant Issue to ASE Subsidiary

Key Points of the Announcement

• Share Subscription: On 21 March 2026, AEM Holdings Ltd. entered into a subscription agreement with Advanced Semiconductor Engineering Test, Inc. (ASE Test), an indirect wholly-owned subsidiary of ASE Technology Holding Co., Ltd. Under this agreement, ASE Test will subscribe for 3,350,000 new ordinary shares at S\$3.591 per share, totaling approximately S\$12,029,850.
• Free Detachable Warrants: Concurrently, ASE Test will be issued 28,111,856 free detachable warrants in two tranches (Tranche 1 and Tranche 2). Each warrant entitles the holder to subscribe for one new ordinary share, subject to specific exercise conditions.
• Potential Dilution: If all warrants are exercised, the aggregate of the subscription shares and warrant shares will represent up to 9.09% of AEM’s issued share capital (excluding treasury shares).
• Strategic Collaboration: The partnership aims to deepen collaboration between AEM and ASE, integrating AEM’s advanced semiconductor testing technologies into ASE’s manufacturing and test environments, especially for AI and high-performance computing (HPC) applications.
• Expansion Plans: The proceeds from this transaction are earmarked for AEM’s expansion in Taiwan, product development, system-level solutions, and joint go-to-market initiatives with ASE.
• Board Representation: ASE Test will be entitled to nominate a director to AEM’s board if it holds 5% or more of AEM’s shares.
• Lock-up Period: ASE Test is subject to a six-month lock-up period for the subscription shares, with limited exceptions.
• Price Discount and Premiums: The subscription price is at a 10% discount to the VWAP of S\$3.99 on 21 March 2026. Tranche 1 warrants have an exercise price of S\$4.1097 (3% premium to VWAP), and Tranche 2 warrants at S\$4.1895 (5% premium to VWAP).
• Exercise Conditions: Tranche 1 warrants can be exercised only if AEM achieves S\$30 million in qualified revenue from ASE and related sales; Tranche 2 warrants require S\$50 million in qualified revenue.
• Listing and Regulatory Approvals: The subscription shares and warrant shares will be listed on the SGX-ST, subject to approval. The transaction is conducted under the general share issue mandate and does not require prior shareholder approval.
• Financial Impact: Assuming full exercise of all warrants, AEM could raise gross proceeds of approximately S\$129 million (S\$12 million from shares, S\$117 million from warrants), significantly boosting its net tangible assets and providing capital for strategic growth.
• EPS Impact: The enlarged share base post-subscription and warrant exercise will dilute earnings per share (EPS) from 3.68 cents to 3.34 cents (basic EPS).

Important Shareholder Information

• Potential Price Sensitivity: The entry of ASE, a leading semiconductor player, as a substantial investor and strategic partner could materially impact AEM’s share price, given the enhanced collaboration and growth prospects.
• Dilution and Board Representation: If ASE Test exercises all warrants, it could become a significant shareholder (up to 9.09%), with the right to board representation and influence over AEM’s direction.
• Expansion and Revenue Growth: The proceeds are earmarked for aggressive expansion and technological integration, potentially accelerating AEM’s revenue growth and market presence, especially in next-generation AI and HPC segments.
• Warrant Exercise Conditions: The warrants are tied to revenue targets, meaning actual dilution and capital inflows depend on successful collaboration and sales growth with ASE and referred customers.
• No Placement Agent Fees: The transaction was initiated by ASE, and no placement agent or commission fees are payable, maximizing net proceeds for AEM.
• Lock-up and Transfer Restrictions: ASE Test is restricted from transferring or selling the subscription shares for six months, except to other ASE group entities, ensuring stability in AEM’s shareholder base during the initial period.
• Dividend Eligibility: The timing of completion is structured so that subscription shares will be eligible for the proposed final dividend of S\$0.013 per share, subject to shareholder approval.
• Shareholder Inspection: The subscription agreement is available for inspection at AEM’s registered office for three months.
• Cautionary Statement: The transaction is subject to various conditions (regulatory, corporate, and material adverse effect clauses). Shareholders are advised to exercise caution and consult professional advisors before making trading decisions.

Detailed Financial Effects

Summary & Potential Share Price Impact

This announcement represents a significant strategic development for AEM Holdings Ltd., with ASE, a global leader in semiconductor assembly and testing, taking a substantial equity stake and forming an operational partnership. The transaction brings immediate capital, potential revenue growth, and technological collaboration, while also introducing possible dilution and board representation for ASE. Investors should closely monitor regulatory approvals, completion of the transaction, and future revenue milestones that could trigger warrant exercises and further capital injection.

The entry of ASE as a strategic investor, coupled with clear expansion and technology integration plans, is likely to be price-sensitive and may materially affect AEM’s share value.

Disclaimer

This article is for informational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The information is based on official company announcements and is subject to change or further clarification.

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