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Fuelling Momentum In the US and Defence Sectors:

Why Now was the Right Time for a Capital Raise

By: Kurt Mueffelmann, Global COO / US President

As archTIS expands its presence in the global defence markets, we face an inflection point: significant customer wins and pipeline growth are accelerating demand for our solutions across the U.S., UK, and Australian markets. And we need additional resources to convert this demand in a timely manner.

Our recent wins with both the US Department of Defence (DoD)[1] and a UK subsidiary of a leading global defence business[2] have validated our offerings – and proven that there is demand in a global market for our data-centric technologies.

With that validation comes the potential for significant “network effect” among allies, alliances, and industry. To capitalise on this momentum, archTIS decided to undertake and close a successful capital raise to  unlock opportunities that would otherwise remain untapped due to resourcing constraints. Our goals -

Expand our U.S. presence to accelerate revenue growth and delivery capabilities;

Deepen and grow strategic global partnerships with technology leaders; and,

To accelerate research, development, and product innovation.

These three pillars are essential in delivering the Company’s overarching strategy and create sustainable, long-term value for customers and shareholders alike.

Following the recent wins announced on the 16thand 18th of June 2025 with the U.S. DoD and a major UK defense business, the Company's market cap surged from $20m to over $60M.

Off the back of these wins, and to capitalise on our growing momentum the Company undertook a $7.5 million placement under its existing placement capacity (pursuant to ASX Listing Rules 7.1 and 7.1A).

The raise was conducted through the issuance of 50 million new fully paid ordinary shares at $0.15 per share. By executing the capital raise at a premium to this year’s trading levels, archTIS strengthened its balance sheet in readiness to convert demand into scalable, recurring revenue, plus position the Company for long-term shareholder value creation. We also hope to further signal some of the strength of the institutional support we have received with the capital raise and show that this placement is demonstrative of the international growth trajectory we envision for archTIS as a result.

The new capital will be allocated across three key areas of activity, each servicing one of the three pillars for growth and expansion:

1. U.S. Expansion & Support – $3 million

The U.S. market is critical to archTIS’ growth strategy; not only because it represents the largest defence budget globally – accounting for approximately 40% of total global military spending - but also because the U.S. defense market is paramount in setting technological benchmarks and security standards that are subsequently adopted by allied nations and coalition alliances worldwide.

With over $900 billion in annual defence expenditures and a heightened focus on data security, zero trust, and secure collaboration, the U.S. DoD serves as both a revenue opportunity and an influential validation engine for product adoption among allied organisations and markets.

Successful adoption by the U.S. DoD creates a powerful “network effect”, signalling credibility and compliance to other coalition forces around the globe. This cascading trust should accelerate procurement cycles across allied security and defence bodies, NATO partners, and international defence companies (primes) for further adoption.

To accelerate growth in the Company’s largest market – the U.S. DoD and US-based defence industrials – we must continue to invest in people, tools, and infrastructure that can deliver new wins while providing ongoing customer success at scale. By building U.S.-based sales distribution, implementation teams, and enhancing support capacities for customers, we can increase revenue opportunities, reduce onboarding times, drive higher adoption rates, and shorten the time-to-revenue for each contract.

Additionally, the automation of post-sales onboarding and implementation can reduce costs and increase the manageable volume of accounts without raising our linear headcount. Building out health dashboards and better understanding our customer success metrics will allow us to identify expansion opportunities earlier – directly fuelling ARR growth by identifying opportunities for upsells and renewals.

These U.S.-based enhancements are anticipated to accelerate customer acquisition, strengthen gross margins, and drive revenue growth through improved customer experience and retention.

2. Strategic Partnerships – $1.5 million

archTIS' strategic alliance strategy is centered on partnering with global technology leaders and defence primes. In doing so, we hope to accelerate further customer market access, enhance the integration of our solutions, and ultimately drive revenue growth.

Key alliances with Microsoft, Thales, Fujitsu and other technology and defence ecosystem partners will enable archTIS to embed its data-centric security capabilities within widely adopted platforms and mission-critical environments.

As an example, utilising co-sell and co-marketing opportunities with Microsoft, archTIS can gain leverage across both public sector and enterprise accounts that are migrating to the Microsoft 365 ecosystem, while looking to provide more granular attribute-based access controls (ABAC) across those environments.

Additionally, collaborations with defence primes like Thales, Leidos, Fujitsu, BAE and others will enhance credibility and open doors to multi-national defense programs where data sovereignty and compliance are paramount.

These partnerships not only extend the reach of archTIS solutions, but are also able to reinforce their position as a trusted layer of security within heavily regulated high-value ecosystems.

Our strategy is grounded in recognition that strategic alliances like these are a high-leverage path to revenue growth.

With increased investment in partner management and enablement programs, we are looking to create a multiplier effect on our sales organisation. We hope to equip our ecosystem and partners with the ability to better identify demand, validate deals, and reduce the cost of acquisition.

Co-marketing initiatives and technical integrations expand our visibility and relevance in joint go-to-market motions. As these partners have embedded trust and access within large enterprises and public sector customers, they accelerate pipeline velocity and improve conversion rates.

Leveraging alliances and partnerships enables faster customer acquisition across markets, accelerating growth while bypassing resource restrictions, ultimately gaining access to new procurement opportunities.

Our product roadmap is central to both winning and retaining business. By prioritising features that map directly to enterprise requirements – such as industry-specific ABAC policies, usability improvements, and government compliance – we improve win rates in competitive procurements and increase average deal size.

R&D investments in AI and automation not only enhance product differentiation, but also reduce the resource cost for customers managing complex security policies – making our value proposition more compelling and “sticky”.

Additionally, funding third-party certifications and audits (e.g., NIST, ISO, IRAP, FIPs) is critical to accessing highly regulated verticals, unlocking significant new and larger market opportunities. These investments ensure our platform is not only compliant, but also best-in-class – directly driving product adoption, upsell potential, and retention and meeting the highest standards expected from our customers and required to win high-profile defense contracts across several allied jurisdictions.

Accelerated delivery of differentiated product capabilities directly improves win rates in active procurement cycles and enables faster market penetration into high-value, compliance-heavy segments.

The Value to Shareholders and the Path Ahead

This capital raise was about enhancing long-term shareholder value by enabling growth that is:

Scalable – with infrastructure and staffing strategies that are aligned to growing client bases in large, defensible markets;

Strategic – focused on partner leverage and recurring revenue models that reduce customer acquisition costs and increase overall margins; and

Repeatable and Sustainable – create a stickier and more predictable revenue model through lower churn rates and much larger lifetime value of government and enterprise-backed contracts.

We believe this funding round is a strategic step forward for our shareholders – not just in revenue terms, but in the global repositioning of archTIS as the go-to provider of data-centric zero trust security that protects the world’s most sensitive information.

With this momentum and backing to expand toward the U.S., we want to reiterate that archTIS is looking to create an expanded ecosystem leveraging powerful alliances and industry-leading partners, coupled with enhanced technology offerings to meet demand in the world’s most critical domains.

[1] ASX Announcement (16 June 2025) – “archTIS Achieves Major Milestone in Sale of NC Protect to U.S. Department of Defense”

[2] ASX Announcement (18 June 2025) – “archTIS Successfully Enters UK Market with Defence Industry Award Following Recent U.S. DoD Win”