Risks Loom as Locate Technologies Plans ASX Exit for NZX Bitcoin Play

Background and Strategic Rationale

Locate Technologies Limited (ASX – LOC) has announced a significant corporate restructure via a scheme of arrangement that will see the company migrate its listing from the Australian Securities Exchange (ASX) to the New Zealand Stock Exchange (NZX). This move is driven primarily by the company’s desire to continue and expand its Bitcoin Treasury Strategy, which is currently constrained by ASX Listing Rule 12.3, commonly known as the “cash-box” rule.

Under the proposed scheme, a newly incorporated New Zealand entity, Locate NZ, will acquire 100% of the issued shares of Locate Technologies. Existing shareholders will receive one Locate NZ share for every Locate Technologies share held, maintaining their proportional ownership. The scheme booklet, recently registered with ASIC, includes detailed financial disclosures, risk assessments, and an Independent Expert’s Report that concludes the scheme is fair, reasonable, and in the best interests of shareholders.

Key Benefits of the Migration

The ASX “cash-box” rule restricts companies from holding half or more of their assets in cash or cash-like investments, a category under which Bitcoin is considered. This rule poses a risk of suspension or delisting for Locate Technologies if it continues to accumulate Bitcoin as a treasury reserve. The NZX Listing Rules do not contain an equivalent restriction, allowing Locate NZ to pursue its Bitcoin Treasury Strategy without regulatory impediments.

Directors believe that the migration will unlock shareholder value by enabling disciplined execution of the Bitcoin strategy, which has already attracted investor interest and increased trading volumes in Locate Technologies shares. The move also opens access to a new base of New Zealand investors, potentially increasing liquidity and diversifying the shareholder base.

Financial and Operational Continuity

The scheme does not involve any changes to Locate’s core operations or management. The Australian businesses, including the SaaS platform Locate2u and the delivery marketplace Zoom2u, will continue to operate as before. Locate NZ will act as the new holding company, with plans to raise approximately NZ$1 million in new capital concurrent with the NZX listing. This capital raise is expected to support ongoing operations and the Bitcoin Treasury Strategy.

The Independent Expert’s Report values Locate Technologies shares between AU$15.1 million and AU$16.3 million, with the post-scheme value of Locate NZ shares held by existing shareholders estimated between AU$14.9 million and AU$16 million, reflecting the capital raise and scheme terms. The report affirms that the scheme is fair and reasonable.

Risks and Considerations

While the scheme offers strategic advantages, it also entails risks. Shareholders will lose the protections afforded by ASX Listing Rule 12.3 and will be exposed to the regulatory environment of New Zealand, which differs from Australia. Liquidity on the NZX is expected to be lower than on the ASX, and Australian shareholders may face reduced convenience in trading their shares due to limited broker access to NZX-listed securities.

Tax implications vary by shareholder circumstances and should be carefully considered. The value of Locate NZ shares post-scheme will depend on market conditions and trading on the NZX. The company’s Bitcoin holdings also expose it to price volatility and regulatory uncertainties inherent in cryptocurrency assets.

Next Steps and Market Implications

The scheme meeting is scheduled to be held virtually on 1 December 2025, with voting eligibility determined as at 7 – 00pm Sydney time on 29 November 2025. Subject to shareholder and court approvals, and NZX listing of Locate NZ, the scheme is expected to become effective in mid-December 2025. Following implementation, Locate Technologies will be delisted from the ASX, and trading of Locate NZ shares will commence on the NZX.

Investors will be closely watching the scheme meeting outcome and the subsequent performance of Locate NZ shares on the NZX, particularly in relation to the company’s ability to execute its Bitcoin Treasury Strategy and maintain operational growth in its SaaS and delivery platforms.