The market may be a sea of red again on Wednesday, but that hasn't stopped the Titomic Ltd (ASX: TTT) share price from rocketing higher.
This afternoon the industrial scale additive manufacturing company's shares returned from a trading halt and rocketed as much as 34% higher to $1.09.
Its shares did drop back a touch as the day went on, but finished it with a 22% gain to 99.5 cents.
Why did the Titomic share price rocket higher today?
Investors have been buying the company's shares after it announced a binding agreement with Composite Technology, an Australian R&D and commercialisation division of a global defence product manufacturer.
According to the release, the contract will generate $25.5 million in sales for Titomic from the provision of two Titomic Kinetic Fusion (TKF) Systems for industrial scale metal additive manufacturing.
Management believes the sales contract for TKF Systems and certification for Titomic Kinetic Fusion will open up further large revenue opportunities with strong industry partnerships in high-margin industries such as the defence sector.
The company's managing director, Jeff Lang, advised: "This is a significant milestone for Titomic, on signing this sales contract with Composite Technology further validates the exceptional work the staff at Titomic have achieved in creating the world's largest and fastest metal additive manufacturing TKF systems."
It is worth noting also that Composite Technology will receive 7.5 million Titomic options upon entering into a Joint Cooperation Agreement (JCA). This JCA will develop certified manufacturing processes for defence related products with the TKF manufacturing systems for industrial scale metal additive manufacturing.
Composite Technology will then receive a further 7.5 million Titomic options for providing certification for the quality assurance requirements of the process.
Capital raising.
The company used the news to successfully close a $19 million capital raising via a private placement.
Titomic raised the funds through the issue of $23.75 million shares to new and existing institutional funds and international long-term investors at a price of 80 cents per share. A share purchase plan will now be offered to shareholders to raise up to an additional $1 million.
These funds will be used to provide additional capabilities to the existing TKF Melbourne Bureau production facility. This will allow the development of further innovative additive manufacturing solutions, technology and techniques.
Management also intends to use the funds to expand the scale and scope of its operations, establish offshore operations, and for working capital.
The founders and IPO broker offloaded 1.45 million shares from their shareholding as part of the placement.
