Capability X (ASX: CX8) - IPO Review of an Edge AI Safety Technology Company
The Capability X IPO offers 60 million shares at A$0.20 to raise A$12 million. It sells safety and remote operations technology to marine, port and offshore energy customers. It has audited revenue and three named customers on multi-year contracts. The offer closes on 19 October 2026 and trading is due to start on 12 November 2026.
Capability X Limited (proposed ASX: CX8) is raising A$12 million at A$0.20 a share in its IPO, and the offer closes on 19 October 2026 [R1]. It is a Perth technology company with paying customers. It sells remote operations, communications and safety technology. Its CX Protect product uses cameras and sensors to watch people and machinery on ship decks and wharves, and alert crews to danger. Its largest disclosed contract is with Bhagwan Marine (ASX: BWN), which Samso has written about before. This is Samso’s first piece on Capability X.
THE SOURCE DOCUMENT Capability X Limited, Replacement Prospectus dated 2 October 2026 and lodged that day with ASIC, the corporate regulator. It replaces the original prospectus dated 25 September 2026. It runs to 165 pages. It includes an independent accountant’s report on the financial information, an Intellectual Property Report by the law firm Thomsons and an Industry Overview Report by Frost & Sullivan. It is available from the Capability X website. |
The Capability X IPO Offer
The offer is for 60,000,000 new shares at A$0.20 each (TABLE 01). The minimum subscription is the full A$12 million. If the company does not raise all of it, no shares are issued and the money goes back. There are no oversubscriptions. The offer is not underwritten, which means no broker has agreed to buy shares that investors do not take. Westar Capital is the lead manager, the broker that runs the offer [R1].
At A$0.20 the 171,902,790 shares on issue at listing are worth A$34.4 million by Samso’s arithmetic. That is the market capitalisation, the value of all the shares. About A$12.0 million of that value is cash on the pro forma balance sheet, which shows the accounts as if the offer had already happened [R1]. The ASX upcoming floats page also gives 12 November 2026 as the listing date [R2]. In our reading, the rest of the A$34.4 million is roughly what the offer price places on the existing business.
What Capability X Does
Capability X was incorporated in Perth in November 2022. It has 15 staff, 12 of them in technical roles. Its headquarters, test site and remote command centre are inside a ground station and data centre at Cullacabardee, north of Perth [R1].
The company’s hardware is a rugged unit it calls CX Edge (FIG. 01 shows an example unit). It holds a camera, a LiDAR sensor, communications gear and a battery. LiDAR measures distance with laser pulses, so the unit can see depth. The unit runs the company’s software on the spot. This is called edge computing, where data is processed on the device that collects it rather than sent to a distant data centre first. Edge AI is the same idea with artificial intelligence software running on the device. The company says this suits ships and remote sites where communications are poor. CX Edge is still being redesigned for volume manufacture [R1]. We wrote about the edge AI theme in our piece on BrainChip.
The company sells four product lines. CX Protect uses computer vision to watch a work area. Computer vision is software that recognises people and objects in a camera image. The company says CX Protect builds a digital twin, a live 3D model of the site, and alerts deck crews, supervisors and remote operators when someone enters a danger zone (FIG. 02). The prospectus does not report detection accuracy, false-alarm rates or any functional-safety certification. CX Remote lets operators control remotely operated vehicles, drones and robots from a command centre onshore. CX Connect supplies communications networks to offshore and remote sites. CX 1 packages the three as a design, build and operate service [R1].
Customers mostly pay under subscription contracts, sometimes called “as a service”. They rent the hardware and software for a monthly or daily fee rather than buying it. Revenue since incorporation to 30 June 2026 was about A$3.62 million. Of that, A$2.61 million came from CX Remote and CX Connect, A$0.37 million from CX Protect and A$0.65 million from consulting [R1]. By Samso’s arithmetic, CX Protect, the product the prospectus leads with, was about 10 per cent of revenue to date. Its first contract, with GO Offshore, dates from January 2025. Most of the money earned so far came from the older remote operations and communications work. CX Protect is early in its sales.
The deployment map shows sites from the North West Shelf to Port Kembla, with more under manufacture (FIG. 03). The prospectus lists other work in progress. There is a memorandum of understanding, or MOU, with a partner in Timor-Leste, and MOUs with one Australian and one international defence contractor. An MOU sets out an intention to work together and is not a sales contract. The company says its technology is already deployed in Brunei, and lists opportunities in China and New Zealand [R1]. For a shareholder, the MOUs are possible future business. The prospectus does not say how much of the revenue has come from outside Australia.
Capability X Customers and Contracts
The prospectus lists three customer contracts as material (TABLE 02). Bhagwan Marine has used Capability X since October 2023 and the contract now runs to 31 December 2028. It is a services agreement that includes access to Capability X personnel and its command centre, as well as equipment and software. Bhagwan can end it on 30 working days’ notice, but must then pay the remaining balance of the fixed term. Qube Ports signed a three-year agreement in December 2025 for CX Protect units the prospectus calls Car Carrier Risk Control and Operational Efficiency units, ordered under separate quotes and purchase orders. GO Offshore pays a daily fee for CX Protect on its vessels [R1].
At the stated rates for a full year, the three contracts would bring in about A$1.26 million. That is Samso’s arithmetic, not a company figure. Bhagwan would be about two-thirds of it. The prospectus does not say how many vessels or systems the GO Offshore fee covers. In August 2026 GO Offshore issued a purchase order to prepare CX Protect for two more vessels. Bhagwan signed a letter of intent for four CX Protect systems in April 2025. The company says customer concentration has fallen with the Qube Ports and GO Offshore deployments and expects that to continue [R1]. Put together, Bhagwan provides most of the contracted income today. The Qube Ports and GO Offshore contracts are what the company points to as spreading that load.
The prospectus lists a customer as “Qube Logistics (ASX: QUB)”. Qube’s website says the group was delisted from the ASX on 17 August 2026 after a takeover [R3]. The contract is with Qube Ports Pty Ltd and the prospectus does not suggest any change to it.
Revenue, Losses and the Going Concern Note
The financial accounts for the three years to 30 June 2026 are audited (FIG. 04). Revenue was A$0.67 million in 2024, A$1.71 million in 2025 and A$1.06 million in 2026. That is a fall of 38 per cent in the latest year by Samso’s arithmetic. The company made a small profit in 2024 and losses in 2025 and 2026. The 2026 loss of A$3.17 million includes A$1.34 million of share-based payments, which are the accounting cost of shares, options or rights issued as payment. They are not cash spent. Operating cash flow, the cash the business itself produced or used, was an outflow of A$2.09 million in 2026 [R1].
The auditor gave a clean, or unmodified, opinion each year. In each of the three years it also drew attention to a material uncertainty about going concern. Going concern is the assumption that a company can keep paying its bills. The financial notes say the company’s ability to do so depends on this fundraising succeeding [R1].
Government grants brought in about A$1.5 million of cash in 2026. They sit in investing cash flow, beside payments for intangible assets of about A$1.5 million in 2026 and A$1.9 million in 2025. The prospectus does not say what those intangible assets are. Payments like these are not in operating cash flow. The company has applied for a further A$4.2 million grant under the federal Industry Growth Program, which it says may or may not succeed. It also has a A$1,015,000 loan from Rockford Equity Pty Ltd, secured against its expected research and development tax refund. Interest is 17 per cent a year, and up to 36 per cent in some circumstances. The company says the refund will repay it, so none of the offer money goes to the loan [R1].
The directors give no revenue or profit forecast. They say the company is at an early commercial stage with a small number of customers [R1]. In 2026 the business spent more cash than it brought in. Its accounts assume this raise succeeds. With no forecast given, the audited history and the contracts are what a reader has to judge it by.
The A$280 Billion Market Estimate
The Chairman’s letter and the company overview quote an estimate by Frost & Sullivan, a market research firm, that the company’s total addressable market exceeds A$280 billion a year [R1]. Total addressable market, or TAM, is the revenue a company would earn if every possible customer bought its product. It is an upper limit and the report does not present it as a forecast.
The report explains the method. It counts sites in four markets, such as 20,000 offshore oil and gas platforms and 16,500 major military bases. It multiplies each by the number of “applications” a site could use. It then applies management’s estimate of average subscription revenue per application. That last number is not disclosed (TABLE 03). The 16,500 bases and the applications per site are Frost & Sullivan estimates [R5].
The counts in the table add to 1,262,257 applications. A$280 billion spread across them is about A$222,000 a year for each application, by Samso’s arithmetic. The report’s split of the TAM by market is within a percentage point of each market’s share of the application count. In our reading that is what one average price across all four markets would produce. Defence and mining make up 60 per cent of the estimate, and the company does not yet sell into either. The report itself says the TAM assumes full penetration and that parts of the market may not be addressable [R5]. Samso’s reading is that the A$280 billion describes the size of the field and is not a guide to what Capability X will earn.
Use of Funds from the CX8 IPO
The board says A$12 million is enough to meet its stated objectives for two years after listing (TABLE 04). Research and development takes about 40 per cent, split between salaries and capitalised costs such as prototype parts. Inventory takes A$2.1 million over two years and the prospectus does not break it down further [R1].
The costs of the offer are A$1,491,365, or 12.4 per cent of the money raised. The largest item is A$720,000 to the lead manager, which is 6 per cent of the raise. The A$1,068,753 value of the lead manager options is a further cost of the offer in the accounts and is not in that total [R1]. Most of the money goes to the product and to running the company. About one dollar in eight goes on the cost of the raise itself.
Capital Structure, Escrow and the Lead Manager
Escrow means a holder cannot sell for a set period. About 53.6 million existing shares are expected to be escrowed for 24 months from quotation. About 29.9 million are escrowed for 12 months from the date they were issued, so some may be released less than a year after listing. Shares bought in the offer are not escrowed. About 28.4 million existing shares are not escrowed either. So about 88.4 million shares, or 51.4 per cent, can trade on the first day by Samso’s arithmetic (FIG. 05). ASX makes the final decision before trading starts [R1].
The earlier shareholders came in at lower prices in share sales before the IPO. After 30 June 2026 the company issued 2,812,500 shares at A$0.16 in a seed raising, an early round for first investors. A research and development loan of A$125,000 was converted into shares at A$0.10 a share. So was a debt of A$310,701 owed to Subsea Investments Holdings Pty Ltd, a company in which the founder and Managing Director, Christopher Eastwell, holds 49 per cent. Convertible notes, which are loans that turn into shares, converted into 12,500,000 shares [R1].
Westar Capital is paid 6 per cent of the raise and a corporate adviser fee of A$10,000 a month for 24 months. It is paid or owed A$197,000 plus GST for the pre-IPO raisings. For 12 months from the mandate it has a first right of refusal, which means it must be offered the job first on any capital raising. It can take up to 12,000,000 options at A$0.0001 each. An option is a right to buy a share later at a set price. These are exercisable at A$0.30 within three years, and Westar chooses which of the brokers helping with the offer receive them. They are expected to be escrowed for 24 months [R1].
The prospectus also discloses that three Westar Capital staff who run the offer took part in the pre-IPO raisings through associated entities. By Samso’s arithmetic they hold 10,429,076 shares and 11,479,149 options between them. The prospectus expects 11,479,149 existing options to be escrowed for 24 months, the same number, but does not say whether they are the same options. It says these people are not related parties or associates of Westar Capital. The Company Secretary, Chris Achurch, sometimes works under the Westar Capital banner, and the prospectus says he is not employed or paid by Westar [R1].
Directors and managers are to receive 6,850,000 performance rights. A performance right converts into a share at no cost if a target is met. Of those, 2,740,000 vest at audited annual revenue of A$5 million and 2,397,500 at A$10 million. The other 1,712,500 vest if the share price averages A$1.00 or more, weighted by volume, over 20 trading days. That is five times the offer price. The revenue test excludes grants and one-off items [R1]. All the options and rights together could add 41,290,455 shares, 24 per cent more, taking the fully diluted total to 213,193,245 by Samso’s arithmetic. Put together, about half of all shares can be sold from the first day, including shares held by investors who came in before the IPO.
Capability X Board, Founder and Intellectual Property
“The Company’s goal is simple: keep people out of harm’s way while helping businesses operate more safely, efficiently and productively.” Hon. Ian Campbell AM, Non-Executive Chairman, in his letter to investors in the replacement prospectus dated 2 October 2026 [R1]
Hon. Ian Campbell AM, the Chairman, served in the Cabinet of the Howard federal government and has been a director of ASX-listed companies. Christopher Eastwell is the founder, Managing Director and Chief Executive Officer, on A$300,000 a year plus superannuation, and the only executive director. The Chairman and the two other non-executive directors are independent. Shane Bransby led an IT services company to an ASX listing in 2025, and Daniel Rohr is a chartered accountant and a company chief financial officer. The directors are not taking part in the offer [R1].
Mr Eastwell holds 43,811,493 shares through his family trust and a company he part-owns. That is 39.15 per cent now and 25.49 per cent after the offer. The prospectus names him among a small number of key people the business depends on [R1].
The company has two provisional patent applications, filed on 6 February and 14 April 2026. A provisional application sets a priority date, the date that counts if someone else later files the same invention. It is not examined. To go on to a patent, a complete application must be filed within 12 months. Both were formally assigned to the company by Mr Eastwell and by the Chief Technology Officer, Adrian Kirk-Burnnand, on 17 September 2026. Thomsons, the lawyers who wrote the IP report, say they did not run a freedom to operate search. That is a search for other people’s patents the products might infringe. They also say they cannot confirm there was no “secret use” of the inventions before the filing dates [R4].
The IP report gives the second patent application as 2026903473 in section 3.2, and as 2026900932, the first application’s number, in the list of assignment documents in section 3.4 [R4]. Samso quotes both as published. The company says it also holds significant secret and operational intellectual property [R1]. Trade secrets are protected only while they stay confidential. For a shareholder, the patent position is at an early stage, and protection rests on two unexamined filings and on keeping the know-how confidential.
What the Prospectus Does Not Settle
Revenue in 2026 was lower than in 2025, and the prospectus does not break the fall down by customer. It gives the contracts as approximate monthly amounts or a daily fee, without the value remaining on each or the number of systems deployed. The market estimate rests on a revenue per application figure that is not disclosed.
Near-term Milestones to Watch
The shareholder meeting to approve the directors’ performance rights, which the prospectus says will be held before listing.
Conversion of letters of intent into contracts, including Bhagwan’s for four CX Protect systems.
ASX’s final escrow decision, and the first day of trading, expected on 12 November 2026.
The outcome of the A$4.2 million Industry Growth Program grant application.
Conversion of the Timor-Leste MOU and the two defence MOUs into contracts.
Complete patent applications, which must be filed within 12 months of the February and April 2026 provisional filings to go on to patents.
The first half-year accounts as a listed company, to 31 December 2026.
Samso Concluding Comments
Capability X has audited revenue and named customers. Its equipment is in use on vessels and wharves. For readers comparing this year’s technology floats, our earlier review of Overwatch Technologies covered another Perth sensing business.
At the offer price, the shares on issue before the offer are worth about A$22.4 million by Samso’s arithmetic. Against that is revenue of A$1.06 million in 2026. In our experience, the test for a hardware subscription business at this stage is the next two years of contract wins. The 2027 accounts will show whether the revenue line has turned back up and whether more of it comes from CX Protect.
SAMSO TAKE We like that the revenue is audited and the three main contracts are named, with their terms. Bhagwan Marine has stayed a customer for three years and extended to 2028. That is a reasonable sign the product does what the customer needs. The A$280 billion figure describes the whole market. It is of limited use in valuing this company. Revenue of about A$1 million a year, and how fast it grows, is the more useful measure. The performance rights targets of A$5 million and A$10 million a year give a useful yardstick. The lead manager is paid fees, options and an adviser retainer on a A$12 million raise, and its staff hold shares and options acquired in the pre-IPO raisings. About half the shares can trade on the first day. How much of the early trading will come from holders who came in before the IPO? |
THE OTHER WAY TO READ THIS On the favourable side, the company has three paying customers on multi-year terms and three years of audited accounts. At the stated rates the three material contracts come to about A$1.26 million a year by Samso’s arithmetic, above the A$1.06 million of revenue in 2026. Bhagwan Marine must pay out the fixed term if it ends its contract early. The board says A$12 million funds two years, and the founder keeps a quarter of the company. On the other side, revenue fell 38 per cent in 2026 and the business used A$2.1 million of operating cash. The auditor flagged going concern in all three years. The two patent applications are provisional and unexamined, and the market estimate is an upper limit that the report does not present as a forecast. |
VOCABULARY, IN PLAIN ENGLISH Edge computing Processing data on a device at the site where it is collected, rather than sending it to a remote data centre first. Edge AI Artificial intelligence software running on an edge device. Computer vision Software that recognises people, objects and events in camera images. LiDAR A sensor that measures distance with laser pulses to build a 3D picture. Digital twin A live digital model of a real site or asset, updated from sensors. As a service Renting hardware and software for a regular fee rather than buying it. Total addressable market (TAM) The revenue a company would earn if every possible customer bought its product. It is an upper limit and is not a forecast. Memorandum of understanding (MOU) A written intention to work together. It is not a sales contract. Pro forma Accounts shown as if a planned event, here the offer, had already happened. Going concern The assumption that a company can keep paying its debts as they fall due. First right of refusal A right to be offered a piece of work first, before anyone else. Share-based payments The accounting cost of shares, options or rights issued as payment. It is not cash spent. Convertible note A loan that turns into shares on set terms. Provisional patent application A filing that sets a priority date. It is not examined. To go on to a patent, a complete application must be filed within 12 months. Freedom to operate search A search for other people’s patents that a product might infringe. Escrow A period in which a holder cannot sell. Option A right to buy a share later at a set price. Performance right A right to receive a share at no cost if a set target is met. Lead manager The broker that runs a share offer. Underwritten An offer where a broker has agreed to buy any shares investors do not take. Market capitalisation The number of shares on issue multiplied by the share price. |
References and sources
Every company figure in this piece comes from the prospectus unless another source is named. Where two parts of the prospectus disagree, both figures are quoted as published.
[R1] Capability X Limited, Replacement Prospectus dated 2 October 2026 and lodged with ASIC on that date. It replaces the prospectus dated 25 September 2026. Available from the company website, capabilityx.com. https://capabilityx.com
[R2] ASX, Upcoming floats and listings. Read on 12 October 2026. https://www.asx.com.au/listings/upcoming-floats-and-listings
[R3] Qube Holdings Limited website, home page. Read on 12 October 2026. https://qube.com.au
[R4] Thomsons, Intellectual Property Report, Annexure B to the Capability X Limited Replacement Prospectus dated 2 October 2026.
[R5] Frost & Sullivan, Industry Overview Report, Global Edge AI Control Systems Market, Annexure C to the Capability X Limited Replacement Prospectus dated 2 October 2026.
Cover image: Capability X headquarters and technology centre, from the Capability X Limited replacement prospectus dated 2 October 2026, section 2.1, Figure 4 (PDF page 44).
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