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More than two years after losing 87 per cent of its value in a single day when a clinical study for its drug pezadeftide in treating mould infections came up as "inconclusive", biotech Hexima (ASX: HXL) is using its listed position to pivot into an entirely new field of next-gen autonomous intelligence products.
To do this, the penny stock company has reached a binding agreement to acquire fellow Victorian business RealThing Entertainment, backed by a planned capital raise of between $4 million and $7.5 million before costs.
Founded in 2006 and with around $2.4 million in capital raised to date according to records with the corporate regulator, RealThing has developed an artificial intelligence platform called AiSAP (Autonomous Intelligent Software Agent Platform) that is used by the visually impaired.
RealThing's intelligent agents take advantage of advancements in generative artificial intelligence (AI), and combine this with what is known as a Belief, Desire, Intention (BDI) model of human practical reasoning.
Its early sales are currently in the US and UK markets, and the company believes its technology could also be deployed in a range of other services including for the elderly, other disabilities, healthcare, government services and beyond.
The company's first product, a software application known as RealSAM, is sold in the USA where RealThing is working with the Library of Congress National Library Service for Blind and Print Disabled (NLS), as well as Veteran Affairs.
In the UK, RealSAM is available via Virgin Media O2, and RealThing has collaborations with organisations supporting visually impaired people including the Royal National Institute for the Blind, Blind Veterans UK, Macular Society, and Torch Trust.
If the acquisition and restructuring scheme is successful, it would see Hexima change its name to RealThing AI Limited with the target's director and founder Silvio Salom becoming non-executive chairman of the group. He would join the board alongside intelligent agents pioneer Dr Michael Georgeff, a former a former program director of the Artificial Intelligence Center in California.
Under the arrangement, Hexima's current chairman and CEO Geoffrey Kempler would be managing director, while several domain specialists would move into executive roles.
Nick Howden and Andrew Hodgson, who have both worked at the Australian Artificial Intelligence Institute, would become chief executive officer (CEO) and chief technology officer (CTO) respectively, while other experienced industry hands Brendan Lewis and Ralph Ronnquist would be chief commercial officer (CCO) and chief science officer (CSO).
The news sent HXL shares soaring by 67 per cent in morning trading, albeit off a low base, to 2 cents per share (cps).
Hexima has proposed a multi-layered proposal for acquiring RealThing, including almost 78.9 million shares issued to the vendors in addition to 8.3 million options at the current 2cps share price.
Hexima will also issue two RealThing shareholders an aggregate of up to 2.5 million shares at a price deemed equal to the capital raising price.
The group notes the transaction is subject to various conditions precedent, including receipt of required shareholder approvals, and Hexima successfully re-complying with Chapters 1 and 2 of the ASX Listing Rules.
"The proposed acquisition of RealThing provides an opportunity to grow Hexima shareholder value in an exciting and cutting-edge technology that builds on the profound impact that AI is already having on society," says Hexima CEO and managing director Geoffrey Kempler.
"RealThing is transforming how people use their mobile and personal devices. The first products are already launched and generating early revenue. This is an exciting and transformative time for Hexima."
Hexima has appointed MST Financial Services to act as lead manager of the capital raising.
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