December 3, 2020

Sequoia Financial Group publishes independent report on Linius - Linius

Summary

Linius Technologies Limited (LNU) listed in March 2017 with
an exciting patented video search and re-compilation
technology, but no product or customers.

Traditional search engines cannot automatically crawl videos,
so have to rely on text data associated with the video. LNU
has invented and patented the Video Virtualisation Engine
(VVE) which indexes, analyses, and tags each frame in a
conventional video and transforms it into a fully searchable
“Virtualised Video”. This allows a hyper-personalised single
video reel to be compiled on-the-fly from an infinite number of
source videos applying the users’ bespoke search criteria.
Each reel contains just the footage the user wants to see. Fully
automated and repeatable, it can be a personalised video
channel. Costs to serve are remarkably low.

Commercialisation Begins – Set to Zoom

LNU has announced a new product – “Whizzard” for the
booming video conferencing and higher education markets,
available to Zoom, Webex and Microsoft Teams users. Zoom
and Webex represent 52% of the world’s video-conferencing
market with millions of users. Users can search and compile
video content from recorded meetings and lectures held within
these video-conference platforms.

LNU’s partner LiveTiles (LVT) will co-market its’ white-labelled
version “LiveTiles Smart Video” to its 1,100 enterprise and
higher education customers targeting Microsoft Teams and
Zoom users. The first deployment to a large Australian
University has commenced. LVT expects strong interest.

Sports, Business News and Security ready to go

● Racing.com deployment now 12-mth in. Being expanded.
● Australian basketball - NBL to launch December. NBL
incentivised to introduce international basketball teams / orgs.
● Indonesian soccer – SportsHero to re-launch Feb 2021.
● UK / Euro football – partner Swanbay in discussions with
major Sports organisations. Golf & other sports possible too.
● Business news – partner Grafa’s launch is imminent.
● European Defence / Security application – pilot continuing.

Recommendation & Opinion

Based on our research and discussions with LNU’s partners,
we are confident in the technology advantage and large
commercialisation opportunities (especially post-Covid).
We have modelled potential revenue of $21m in FY22 and
$60m in FY23 but a wide range of outcomes are possible.
Investment risk is high as the business model(s) are not yet
proven. Potential user numbers and TAMs (total addressable
markets) are huge.

We initiate coverage with a Speculative Buy / High Risk
recommendation. Our valuation range based on 3-5x FY24
revenue (i.e. Year 3) is $0.25 to $0.35 per share. We set our
24-mth price target at the lower figure of $0.25.

© Linius Technologies Limited. All rights reserved. 2021