In the matter of Locate Technologies Limited

By Originating Process filed on 21 October 2025, the Plaintiff, Locate Technologies Limited (“Locate AU”) seeks orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) in respect of a proposed scheme of arrangement between Locate AU and its shareholders.

By way of background, Locate AU is a technology company which provides customers with access to same-day courier services by connecting them with a network of independent drivers by a “Software-as-a-Service” platform known as “Locate2u”. On 29 May 2025, Locate AU announced a strategy to allocate surplus capital, beyond immediate working capital requirements, into Bitcoin as a long-term reserve asset. As at 30 June 2025, Locate AU held 10.1 Bitcoin, which increased to 12.3 Bitcoin by 30 July 2025. The cash and Bitcoin reserves amounted to $3.4 million at year-end FY25, representing a 64% increase in treasury assets compared to FY24.

Locate AU has engaged in correspondence with the Australian Securities Exchange (“ASX”) to explain the Bitcoin treasury strategy and review its compliance with ASX Listing Rule 11.1. ASX there advised that it would be concerned if Bitcoin or other assets readily convertible to cash came to represent more than 50% of Locate AU’s total assets, as this could raise issues under Listing Rule 12.3, which deals with “cashbox” companies. ASX also advised that, if Locate AU’s Bitcoin holdings were to exceed 50% of total assets, ASX may consider that Locate AU’s main undertaking had changed to investing in Bitcoin; ASX may then require compliance with Listing Rules 11.1.2 and 11.1.3 (shareholder approval and/or re-compliance with admission requirements); and, in those circumstances, Locate AU could be treated as an “investment entity” and the ASX would be unlikely to approve a re-application for listing. Locate AU has formed the view that it would be constrained by pursuing its Bitcoin treasury strategy while it remains listed on ASX and that, rightly or wrongly, it wishes to avoid that constraint for the future.

On 11 September 2025, Locate Technologies Limited (a company incorporated in New Zealand) (“Locate NZ”) was incorporated for the primary purpose of facilitating the migration of the Locate Group’s parent company to New Zealand Stock Exchange (“NZX”). Locate AU and Locate NZ entered into a Scheme Implementation Deed (“SID”) on 12 September 2025. By letter dated 17 October 2025, NZX Regulation Limited provided its conditional approval of initial listing and quotation of Locate NZ, subject to a condition that Locate AU’s shareholders approve the scheme in accordance with the SID.

The proposed scheme provides for the acquirer, Locate NZ, to acquire all of the issued shares in Locate AU in exchange for scrip in Locate NZ on a one-for-one basis. It is also proposed that Locate NZ will conduct a capital raise up to NZ$1 million prior to the scheme meeting and issue collateral shares under an “ATM” facility, such that the shareholding of Locate NZ will be different to Locate AU upon implementation of the scheme, although Locate AU shareholders will receive Locate NZ scrip on a one-for-one-basis as scheme consideration. Mr Jameson, who appears for Locate AU, submits, and I accept, that is a matter which shareholders will be able to consider when deciding whether to vote their shares in favour of or against the scheme.

As I noted above, the effect of the scheme would be to enable the Locate group to shift its listing to NZX in order to avoid potential constraints on its strategy to allocate surplus capital into Bitcoin as a long-term reserve asset, which arise under ASX’s policies relating to cashbox companies. It is not a matter for the Court to assess the merit of that objective, provided adequate disclosure of its risks is made, where that will be a matter for Locate AU’s shareholders to consider at the scheme meeting. Locate AU’s Australian business will otherwise remain unchanged after implementation of the scheme.

I made the orders sought by Locate AU at the conclusion of the hearing on 31 October 2025. These are my reasons for doing so. I have drawn on Mr Jameson’s helpful submissions in this judgment.

Locate AU reads several affidavits in support of the application, and revised the explanatory booklet between the first listing of this matter on 27 October and its second listing on 31 October so as to provide detailed disclosure of the perceived advantages and risks of, first, its Bitcoin strategy and, second, moving from a listing regime which specifically regulates “cashbox” companies to a listing regime which does not do so.

Locate AU also tendered a letter dated 31 October 2025 from the Australian Securities & Investments Commission in common form, which reserved its position as to s 411(17)(b) of the Act; indicated that it considered that it had had a reasonable opportunity to examine the terms of the scheme and draft explanatory statement and to make submissions to the Court; and indicated that it did not propose to appear to make submissions or to oppose the scheme at the first Court hearing. ASX has also indicated it has no comments as to the scheme documents.

It is well-established that the Court’s role at a first Court hearing in respect of a scheme is primarily to determine, in the exercise of its discretion, whether to convene a scheme meeting and approve the explanatory statement if it is satisfied of several matters, namely that the plaintiff is a “Part 5.1 body”; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; there has been proper disclosure to members (or creditors if a creditors’ scheme); the scheme is bona fide and properly proposed; ASIC has had reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; the procedural requirements of the Supreme Court (Corporations) Rules 1999 (NSW) (“Rules”) have been met; and there is no apparent reason why the scheme should not, in due course, receive the Court’s approval if the necessary majority of votes is achieved: Re Ellerston Global Investments Ltd [2020] NSWSC 879 at [25]–[26]; Re Vocus Group Ltd [2021] NSWSC 630 at [12]; Re InvoCare Ltd [2023] NSWSC 1180 at [16]; Re Pacific Smiles Group Ltd [2024] NSWSC 812 at [9]; Re APM Human Services International Ltd [2024] NSWSC 1095 at [11].

Mr Jameson refers to the summary of the relevant principles in Re Absolute Equity Performance Fund Ltd [2022] FCA 933, where Halley J observed at [19]–[22] that:

Each of the preconditions to the exercise of s 411(1) of the Act is met here. Locate AU is registered under the Act and is a Part 5.1 body and the proposed scheme is an “arrangement” between Locate AU and its shareholders. The draft scheme booklet has been the subject of a verification process. The procedural requirements under the Rules have been met, on the basis that I will dispense with r 3.4 of the Rules where Locate AU proposes to give notice of the second Court hearing by way of ASX announcement in accordance with common practice.

Where the preconditions to the exercise of power under s 411(1) of the Act are satisfied, then it is necessary for the Court to consider whether the Court should, in its discretion, exercise its power under s 411(1) of the Act. The principles relevant to the exercise of that discretion are well established and were summarised in Re Origin Energy [2023] NSWSC 1246 at [21]–[23]. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed and that members (or creditors) are to be properly informed as to the nature of the scheme before the scheme meeting.

Locate AU’s directors recommend to shareholders that they vote in favour of the scheme subject to the independent expert continuing to conclude that the scheme is in the best interests of shareholders. They also intend to vote (or procure the voting of) their respective shares in Locate AU in favour of the scheme, subject to the independent expert continuing to conclude that the scheme is in the best interests of Locate AU. The independent expert, Hall Chadwick, has concluded that the scheme is fair and reasonable and in the best interests of shareholders and has amended its report to address regulatory issues in doing so. The expert concludes that Locate AU’s shares are valued at between $15.113 million to $16.273 million (with a mid-point of $15.693 million) and the indicative value of Locate NZ shares offered as scrip consideration are valued at between $14.884 million to $15.983 million (with a mid-point of $15.434 million). Where the value ranges overlap, the expert concludes the scheme is fair and reasonable. No apparent difficulty arises with the disclosure in the scheme booklet, in its revised form, and the verification process adopted in respect of the scheme booklet.

Mr Jameson also addresses the manner of despatch of scheme materials and reminder communications which are in conventional form. He also refers to the engagement of a third party to operate an in-bound shareholder information line for Locate AU shareholders. The script for the shareholder information line is in evidence and Locate AU, consistent with now common practice, does not seek orders approving it.

Subject to the particular matters addressed below, I am satisfied that there is nothing in the terms of the scheme or in its effect on scheme shareholders that would otherwise warrant the Court declining to approve the scheme at the second Court hearing, if it receives the statutory majorities required by s 411(4)(a)(ii) of the Act at the scheme meeting.

Mr Jameson draws several particular aspects of the scheme to the Court’s attention. First, Mr Jameson notes, and I accept, that the usual performance risk measures are employed in relation to this transaction. Locate NZ has signed and delivered a Deed Poll binding it to comply with its obligations under the SID, and the transfer of shareholders’ shares is conditional upon the provision of the scrip consideration to shareholders. Second, there is no break fee, nor are there any provisions such as “no talk”, “no shop” or “no due diligence” in relation to this scheme.

Third, Mr Jameson recognises that the directors of Locate AU and Locate NZ are the same, other than that Locate NZ also has two additional, New Zealand-based directors. That matter is disclosed to shareholders in the scheme booklet and shareholders can take it into account by them when voting on the scheme. Fourth, Locate NZ presently has one shareholder, being Mr Orenstein, the managing director and chief executive officer of Locate AU. Mr Orenstein’s evidence is that that share is held by him solely for the purpose of complying with the requirement for a New Zealand company to have at least one shareholder and it is intended that the share will be bought back and cancelled immediately following the first allotment of ordinary shares in Locate NZ. Mr Orenstein has executed a share transfer to give effect to this arrangement and provided confirmation by letter to the board of Locate NZ that he will transfer his share on the first allotment. This matter is also disclosed in the scheme booklet.

Fifth, Locate AU has various options on issue as set out in the scheme booklet. Locate NZ has entered into option sale and purchase agreements pursuant to which it has agreed to acquire all of the vested and unvested options held by all optionholders on the scheme implementation date in exchange for the same number of options to acquire shares in Locate NZ on generally equivalent terms. The terms of the employee share options which are proposed to be issued to Locate AU employee share option holders by Locate NZ have been adopted by the board of Locate NZ on or about 30 October 2025. These matters are also disclosed in the scheme booklet.

Sixth, Locate AU seeks to rely upon s 3(a)(10) of the Securities Act 1933 (US) for its US shareholders who are scheme participants. As requested by Locate AU, I note this matter which will otherwise be addressed at the second Court hearing: Re Simavita Holdings Ltd [2013] FCA 1274 at [50]–[52]; Re Ardent Leisure Ltd (No 2) [2018] NSWSC 1990 at [19]; Re Telstra Corporation Ltd (2022) 163 ACSR 429 at [40]; [2022] NSWSC 1180; Re Telstra Corporation Ltd (No 2) (2022) 163 ACSR 543 at [55]–[57]; [2022] NSWSC 1460. These matters, separately and together, provide no reason not to make the orders sought by Locate AU.

For these reasons, I made the orders sought by Locate AU at the conclusion of the first Court hearing on 31 October 2025.