Highlights

  • X2M Connect secured a Placement of about A$1.4 million at A$0.004 per share after a trading halt.
  • A non-renounceable rights issue of about A$3.6 million on the same or similar terms is planned to follow.
  • Sep-2026 quarter Revenue fell 34% to A$1.4 million amid a pause in South Korean municipal spending.
  • Net operating cash outflow narrowed 54% to about A$0.8 million, with quarter-end cash of A$1.42 million.

X2M Connect (ASX:X2M) has returned to investors for fresh capital, securing a placement of about A$1.4 million on 30 October 2026 and flagging a non-renounceable rights issue of about A$3.6 million to follow. The smart city technology company said the funds will support its push into the data centre ecosystem, where it aims to provide services, equipment, energy management and sensor monitoring.

The raising came alongside a September quarter update showing lower revenue but a smaller operating cash outflow.

Terms of the Placement and Rights Issue

About 353 million placement shares are being issued at A$0.004 each, a 16.8% discount to the five-day volume-weighted average price, to sophisticated and professional investors. Subject to approval at the Annual General Meeting on 30 November 2026, participants will also receive one free Listed Option for every two placement shares, exercisable at A$0.008 and expiring on 2 June 2029, and one Bonus share for every four placement shares.

Offer documents for the rights issue are expected to be lodged within about two weeks of the announcement. The proceeds are earmarked for data centre sensor integration, design consultation, platform enhancement, energy management and storage systems, and working capital. The raising follows A$3 million raised during the September quarter through a A$2 million placement and an oversubscribed A$1 million share purchase plan.

Korean Election Pause Weighs on Revenue

X2M's platform connects devices from any manufacturer or network to edge and cloud software for Utility and government customers, with more than 500,000 devices connected across Japan, South Korea, Taiwan, the Middle East and Australia. Revenue for the Sep-2026 quarter fell 34% to A$1.4 million, reflecting a pause in South Korean municipal spending around local elections. Gross Margin edged up to 45%, while operating expenses eased 4% to A$1.6 million and the adjusted EBITDA loss was A$0.9 million.

Customer receipts were A$1.94 million, and the net operating cash outflow narrowed to about A$0.8 million. Cash was A$1.42 million at 30 September 2026, with A$2.34 million drawn across Debt facilities.

Data Centre Agreements and Near-Term Targets

During the quarter, X2M entered a binding agreement to deliver an AI-enabled data centre with estimated project costs above A$250 million, from which it expects to earn a delivery margin and recurring platform revenue. It also signed two partnerships to develop GPU data centre and energy precincts of 10MW to 100MW in regional Queensland, and a non-binding memorandum of understanding for data centre campuses in Darwin. A new wholly owned subsidiary, X2MDC, will hold all data centre contracts.

In its core business, the company expects to deliver 55,000 HelpMe safety devices for Seoul City by the end of the December quarter, recognising about A$1.3 million in revenue. Management expects December quarter revenue to exceed the September quarter as Korean activity normalises, and the board's stated priority is reaching profitability and positive operating cash flow.

Shares were priced at A$0.004 on 2 November 2026, down 12.5% on the day, giving a Market Capitalisation of A$9.08 million.