NS1 pushes $8.3M convertible notes out to late 2027
Our defence tech Investment Nodestream (ASX: NS1) just pushed out the maturity dates on its convertible notes by up to 12 months.
NS1 is the company behind tech that can securely stream video, voice and data in real time over almost any network, even congested or degraded satellite and cellular links, using minimal bandwidth.
Today NS1 announced it has signed deeds of variation with its convertible noteholders, delaying $8.325M in notes that were due to start maturing from next month, out to October and November 2027.
(source)
The “cost” of the extension is issuing up to 189,204,546 options priced at 1.5c to the note holders, subject to shareholder approval at the upcoming AGM.
That 1.5c exercise price is 50% above our entry price, and well above where NS1 trades today, so for the breathing room that this allows NS1, we were pleasantly surprised with this outcome.
As of the most recent quarterly, NS1 had $1.2M in cash, plus $3.5M received from the prior capital raise received after quarter end (and another $3.5M in available funding it can draw on). (source)
So ~$4.7M cash, $3.5M in additional funding and just $1.4M in notes due in the near term now.
From a total of ~$9.75M in convertible notes, ~$8.325M has now been extended out to at least 12 months from today.
So the short term cash position is now much more manageable for NS1, we think that those notes nearing maturity (prior to today’s extension) was likely one of the big reasons for the share price dropping in recent months.
Contracts in NS1's space take time to land, so this extension gives NS1 another 12 month runway extension to execute on its plan and strategy.
Two months ago we covered NS1 in a deeper dive (Note: NS1’s ticker code was formerly HTG):
How NS1's tech works
NS1’s Nodestream tech keeps mission-critical video, voice and data flowing over the thinnest, most degraded or jammed comms link.
It uses around 90% less bandwidth and works across satellite, cellular or radio (or any combination), whatever it takes to get a message through.
(source)
That is a problem that's becoming more important on a battlefield dominated by unmanned drones, robots and vehicles.
All of which the enemy is trying to scramble and cut connectivity to.
HTG’s tech is already commercially proven with a TRL 9 rating - the US Department of Defence's highest "deployed and proven in operations" readiness level - backed by >500,000 operational hours of commercial use.
HTG is now pivoting its proven technology into the defence market, aiming to convert trials, tests and early orders into materially larger paid contracts.
(source)
We are Invested to see HTG pivot its commercially tried, tested and revenue generating “communications link resilience” tech to sell into the defence space.
The 8 Reasons We Invested in NS1
Below are the key reasons why we are Invested in NS1 from our NS1 Investment Memo.
You can see our initiation note from 3 months ago here which include the expanded reasons and more: Our New Investment: Harvest Technology Group (ASX: HTG)
(Note: Nodestream (ASX: NS1) was previously known as Harvest Technology Group (ASX: HTG))
- NS1’s tech enables remotely operated and unmanned drones, robots, boats, submarines and vehicles
- We are backing the defence focused team
- Tired, stale shareholder base means opportunity for new Investors like us
- NS1’s tech has >500,000 operational hours and is TRL 9 certified.
- Full focus moving to defence
- NS1 already has defence market traction
- ASX listed peer has gone from 30c to $7 per share on defence pivot
- Small $18M market cap - leveraged to a re-rate
What we want to see next from NS1?
🔄 Land a major US or NATO defence contract
- ✅ CEO hire (done - Veronica Bainton appointed)
- 🔄 CFO hire
- 🔄 Convert the existing NATO defence-force trial into a paid contract
- 🔲 Sign a follow-on order with the existing Five-Eyes customer at a materially larger size
- 🔲 Contract with US defence contractors
- 🔲 Contract with EU defence contractors
🔄 Brave1 accreditation & Ukraine live deployment
- 🔄 Secure Brave1 accreditation
- 🔄 (NEW - via recent Ukraine MOU) Establish a direct Ukrainian testing partnership (source)
- 🔄 Convert the MOU into a binding agreement (with export approvals in place)
- 🔲 Deploy NS1's tech into a live Ukrainian defence-tech use case
- 🔲 Publish independent benchmarking results from Brave1 testing
Every box ticked here is match footage for the scouts in NATO and AUKUS procurement.
