Multistack International (MSI) will divest substantially all its assets and liabilities to Hong Kong-based entity Willing Y Limited, discontinuing its loss-making core business and retaining a small cash buffer for statutory obligations as it seeks new opportunities.
This transaction includes the sale of 100% of the shares in MSI’s wholly owned subsidiary, Multistack Australia.
The business will continue to be operated prudently as a going concern until the target completion date, set for the end of June 2026.
Exit From Loss-Making Operations
MSI’s underlying business has been deemed loss-making and would require significant capital injection, which the company states is beyond its means.
Consequently, MSI will discontinue its current operations in their present form.
Post-completion, MSI expects to have a small net asset position.
This will be represented by an agreed amount of cash intended to meet statutory and ASX liabilities over the next 12 months.
FY2025 Financial Context
The company’s FY2025 financial results, reported on 27 March 2026, showed total revenue declined by 57.52% to AUD 158,888, down from AUD 374,032 in FY2024.
Despite the revenue decline, the Group swung to a profit of AUD 2,257,151 (FY2024: loss of AUD 1,679,290).
This was largely driven by AUD 4,120,891 in other income, including settlement proceeds related to a Danfoss settlement and disposal outcomes for Verdicorp/ORC technology and SuperLink.
Multistack Australia still incurred a loss before income tax of AUD 560,753 for FY2025.
Going Concern and Approvals
The annual report for FY2025 highlighted a material uncertainty that could cast significant doubt on the Group’s ability to continue as a going concern.
This was due to ongoing loss-making operations and a capital deficiency.
Completing the proposed transaction is subject to several conditions.
These include the finalisation of definitive documentation, shareholder approval, and the submission of an independent expert’s report to ensure compliance with the Corporations Act and ASX Listing Rules.
Other regulatory approvals are also required.
Strategic Pivot to New Ventures
During the interim period leading up to the transaction’s completion, MSI plans to solicit opportunities for new business activities into the entity.
The cash retained post-divestment is earmarked to cover statutory and ASX liabilities for the next 12 months.
This strategic move aims to reposition the company for potential future growth opportunities, pivoting away from its previous loss-making core business.
While the move aims to extricate the company from ongoing operational losses and a precarious going-concern status, the transaction's completion is contingent on several approvals, introducing execution risk.
Investors will monitor the company's ability to secure a new business direction with its limited retained cash buffer.
