AML3D Addresses ASX's Concerns Over Conditional Purchase Order Disclosure
AL3 (AL3) Share Update July 2024 Tuesday 16th
AML3D Clarifies Response to ASX Aware Letter
AML3D Limited (ASX: AL3) has issued a detailed response to the Australian Securities Exchange (ASX) regarding a conditional purchase order and its impact on the company's stock price and compliance with listing rules.
Instant Summary:
- AML3D received a conditional purchase order on 27 June 2024.
- The order was subject to various conditions, including scope review and acceptance testing.
- AML3D asserts that the conditional order was not material enough to affect stock price.
- The company confirmed compliance with ASX Listing Rules, particularly Listing Rule 3.1.
- The conditional order became unconditional and was announced on 2 July 2024.
Background
AML3D Limited (ASX: AL3), a company specializing in 3D printing technology, has recently responded to a letter from the Australian Securities Exchange (ASX) regarding a conditional purchase order received on 27 June 2024. The ASX had raised questions about the impact of this order on the company's stock price and whether AML3D had complied with its continuous disclosure obligations.
Details of the Conditional Purchase Order
The conditional purchase order, valued at approximately A$1.1 million, was received from BlueForge Alliance for an ARCEMY® system to be used by US Navy component supplier, Laser Welding Solutions. The order was subject to several conditions, including a review of scope requirements, pricing, contractual terms, warranties, and acceptance testing. AML3D clarified that the order could be revoked by the customer at any time until both parties agreed on the terms and accepted the purchase order.
ASX's Concerns and AML3D's Response
The ASX had queried AML3D on whether the conditional purchase order was material information that should have been disclosed earlier, especially given the significant increase in the company's stock price following the announcement. AML3D responded that the conditional nature of the order meant it was not material enough to affect the stock price. The company emphasized that it complied with Listing Rule 3.1, which requires immediate disclosure of any information that a reasonable person would expect to have a material effect on the price or value of the company's securities.
Timeline of Events
AML3D provided a detailed timeline of events leading up to the announcement:
- 27 June 2024: Conditional purchase order received from BlueForge Alliance.
- 28 June 2024: Order made available to management for review.
- 1 July 2024: Contractual terms and scope reviewed and issued to the customer.
- 2 July 2024: Order accepted by both parties and announced to the ASX.
The conditional purchase order's announcement had a notable impact on AML3D's stock price, which saw a significant increase. However, the company's clarification that the order was conditional and subject to various terms may temper investor enthusiasm. The confirmation of compliance with ASX Listing Rules should reassure investors about the company's governance practices.
Investor Reaction:
Investor reaction has been mixed. Some investors appreciate the transparency and detailed response from AML3D, while others are concerned about the initial lack of disclosure. Analysts have noted that the conditional nature of the order justifies the company's decision to delay the announcement until it became unconditional.
Conclusion:
Investors should keep a close eye on AML3D's future announcements and any developments related to the ARCEMY® system sale. The company's adherence to disclosure regulations and its ability to secure significant orders will be crucial for maintaining investor confidence.