By sifting through hundreds of smaller names, investors can find hidden gems worth investing in.

In this article, we're going to look at two businesses that are in the portfolio of the listed investment company (LIC) WAM Microcap Ltd (ASX: WMI), which focuses on the smallest growing businesses on the ASX where the fund manager can see a catalyst that could send the share price higher.

While the following two businesses may not become the next Commonwealth Bank of Australia (ASX: CBA), the fund manager Wilson Asset Management is bullish on these ASX small-cap shares with their prospects.

Ai-Media Technologies Ltd (ASX: AIM)

WAM describes AI-Media Technologies as a business that provides the full suite of technology and services needed to accurately caption live broadcasts, in-venue displays and over-the-top (directly to the customer through the internet) content in multiple languages.

The fund manager noted that in September, the company benefited from utilising the annual general meeting (AGM) webcast to feature a live demonstration of LEXI Voice, an AI-powered, real-time multi-lingual voice translation solution.

On 26 September 2025, the ASX small-cap share released the chair and CEO addresses, which highlighted its pivot to a tech-led model and noted the adoption of the LEXI AI suite.

This followed the company's strong full-year results where management spelled out the continued shift towards technology product revenue and reiterated the long-term aspirational targets of $150 million in revenue and $60 million of operating profit (EBITDA) by FY29.

COG Financial Services Ltd (ASX: COG)

The other ASX small-cap share that the fund manager highlighted was COG Financial Services, which it described as Australia's largest aggregator of finance brokers and equipment leasing businesses.

WAM noted the company saw a positive rise gain in September largely due to contract wins and result-driven momentum.

In early September 2025, it announced the $40 million acquisition of EasiFleet, a salary packaging and novated leasing business.

The fund manager highlighted that the acquisition aligns with the company's growth plan being expanding the ASX small-cap share's scale and geographic reach in novated leasing, salary-packaged car leases arranged through employers, while adding complementary customer exposure across its existing brand portfolio.

The company has already been growing consistently in this segment, with FY25 revenue from novated leasing up 22% on the prior year. On top of that, the FY25 result remains a focus for investors after an updated result presentation was announced and fresh substantial holder filings suggested rising institutional investor interest.

WAM concluded about the ASX small-cap share:            

While cyclical factors have weighed on COG's recent earnings, we continue to see long-term upside as management executes a more focused strategy, with the annual general meeting on 6 November 2025 representing the next potential catalyst.

The post These ASX small-cap shares have BIG potential appeared first on The Motley Fool Australia.

At the centre is Lexi, AI-Media's flagship automatic captioning solution. Once seen as a complement to human transcription, LEXI is now positioned to replace it entirely.

Going fully AI

In a recent interview, CEO Tony Abrahams set out bold ambitions: By year's end 2025, the company expects to remove the human element from its workflows altogether. The company indicates Lexi could deliver transcription and translation with better than 99% accuracy, a benchmark previously reserved for manual services.

This shift has powerful implications for scale. Human labour is expensive and difficult to grow globally. Purely AI-driven systems, by contrast, can scale almost instantly, lowering costs and improving margins as demand rises.

Abrahams highlighted the growth trajectory: LEXI revenue has expanded from just $800,000 four years ago to $24 million today. By FY29, the company is targeting $120 million in LEXI revenue, forming the bulk of an expected $150 million group total.

Expanding markets

AI-Media is already a dominant supplier in the US broadcast market, but the growth plan stretches much further. Management is investing in geographic expansion across Europe and Asia, while also moving into government and enterprise contracts.

That government angle is becoming a competitive edge. The company has achieved security accreditation from the US Department of Defence, leading to a $500,000 purchase order for Congress. Its captioning equipment is now installed across legislative chambers in the US, UK, Canada, and multiple Australian states. These wins provide sticky, long-term revenue and credibility to pursue further contracts.

Riding the AI wave as a consumer

One important point often missed by investors is that AI-Media isn't competing to invent new AI models. Instead, it's a consumer and integrator of the latest AI breakthroughs. The faster the world's largest tech companies advance, the faster AI-Media can bake those improvements into its stack.

That means lower latency, higher accuracy, and better economics for LEXI over time. In other words, rather than fearing disruption from bigger AI players, AI-Media can actively benefit from their progress.

Foolish Takeaway

AI-Media's journey reflects how small ASX companies can leverage global AI innovation to build competitive advantages. With ambitious revenue targets, expanding global contracts, and a shift to fully automated transcription, management is positioning AIM as a technology-first business.

If successful, AI-Media could turn its niche into a global platform and provide a fascinating case study of how Australian ingenuity can ride the AI wave.

The post ASX small cap chasing global growth with a bold AI strategy appeared first on The Motley Fool Australia.

That's because they have just been named as buys with major upside potential. Here's what analysts are saying about them:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap ASX share that is being tipped as a buy is Ai-Media Technologies. It is a technology company that allows many of the world's leading brands to caption their TV broadcasts, live streams, events, virtual meetings and more.

It notes that its technology delivers over 7 million minutes of captioning, transcription, and translation for live and recorded media content, online events, and web streams every month.

Morgans rates the company as a buy. Last week, its analysts said:

Technology led captioning is the bulk of AIM's gross profit today and should exceed 90% within the next 12 months. Management has highlighted it will now aggressively pursue growth, targeting $60m of EBITDA by FY29, with the requirement of upfront investment in sales and product development.

We see substantial share price upside if management achieve its target. We estimate that $60m of EBITDA in FY29 is worth $2.91 in FY29 or $1.44 today. This equates to a ~40% IRR, leaving substantial margin for error. The reward is, in our view, well worth the risk.

Morgans has an add rating and $1.00 price target on its shares. This suggests that its shares could rise 27% from current levels.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Another small cap ASX share that is highly rated is Paradigm Biopharmaceuticals.

It is a biotechnology company focused on repurposing Pentosan Polysulfate Sodium (PPS) for the treatment of Osteoarthritis (OA) in the knee. If approved the drug will have the brand name Zilosul.

Bell Potter notes that the "global market for a safe, effective treatment that provides superior patient outcomes compared to the standard of care is a multiple blockbuster." It adds:

In the US along the incidence of moderate to severe osteoarthritis is estimated at 30m persons. The pricing of the drug will ultimately be determined by the economic benefit associated with its use as well as the cost of other therapies. The conservative estimate is US$2,500 per year which places the addressable market in the tens of billions of US$.

In light of this, the broker is highly encouraged by recent trial data and the prospect of phase 3 studies starting next year.

As a result, Bell Potter put a speculative buy rating and 80 cents price target on its shares last week. This implies potential upside of 38% for investors over the next 12 months.

The post These small cap ASX shares could surge 27% to 38% higher appeared first on The Motley Fool Australia.

Interest has been surging amid the phenomenal gains achieved by generative AI chipmaker Nvidia Corporation (NASDAQ: NVDA) and the rapid technological advances delivered by US-based AI research organisation OpenAI.

While not all ASX AI stocks have joined in the rally, investors have sent the Ai-Media Technologies Ltd (ASX: AIM) share price surging 189.3% over the past 12 months.

AI Media shares closed yesterday trading for 81 cents apiece.

AI Media, if you're not familiar with it, provides live and recorded captioning, transcription, and translation solutions.

When the company released its full-year results (FY 2024) on 29 August, investors responded by sending the AI Media share price up 11.0% on the day.

Highlights from those results included a 7% year on year boost in revenue to $66.2 million, while gross profit of $42.5 million was up 15% from FY 2023. The ASX AI stock had a cash balance of $10.9 million as at 30 June.

Notably, the company's technology revenue increased by 37% from the prior year to $32.9 million.

Management said this result was underpinned by 40% growth in its flagship Lexi. Lexi is the company's AI-powered captioning and transcription solution.

Now, here's why Tamim Asset Management thinks AI Media shares could gain another 14% over the shorter term and rocket 1,000% or more over the next few years.

ASX AI stock well-placed for long-term growth

"AI Media has been transforming its operations from a services-based business to a technology-focused company, centred around AI-powered language services," the asset manager noted.

Tamim said this transformation is a core part of the ASX AI stock's strategy of moving toward higher-margin, recurring technology revenue.

"AI Media aims to have 80% of its revenue come from technology by December 2025, up from the current 50% level," Tamim said.

The asset manager noted that AI Media's ambitious five-year targets include achieving $150 million in revenue and $60 million in earnings before interest, taxes, depreciation and amortisation (EBITDA).

Management intends to achieve this goal by focusing on geographic expansion, sector diversification, and new AI-powered product launches.

According to Tamim, which owns shares in the ASX AI stock:

AI Media represents one of the most promising AI-focused companies on the ASX. With a strong foothold in global markets, AI Media's business transformation, bolstered by its flagship Lexi platform, positions it well for long-term growth.

The company boasts strong revenue and profit growth, a cash-rich balance sheet, and a highly committed leadership team. 

The asset manager said that with 35% annual revenue growth, it values AI Media at around 90 cents a share in the medium term. That's 11% above yesterday's closing price.

And longer term, Tamim said this ASX AI stock has 10-bagger potential.

The asset manager added:

As AI Media continues its rapid transition, the market is likely to price it according to its trajectory towards its five-year goal of $150 million in revenue and $60 million in EBITDA.

At that point, a valuation of $5.00+ is achievable, making AI Media a potential ten-bagger over the next few years.

The post Up 189% in a year, could this be 'one of the most promising' ASX AI stocks to buy today? appeared first on The Motley Fool Australia.

Here's what the broker is saying about them:

Ai-Media Technologies Ltd (ASX: AIM)

Bell Potter has a buy rating and 55 cent price target on this captioning, transcription, and translation services provider. This price target implies a potential upside of 93% for investors over the next 12 months.

Commenting on its FY 2023 results, the broker said:

AIM has delivered a solid FY23 with revenue +3% to $61.8m (BPe $60.8m) largely underpinned by the scaling of LEXI solutions (Tech revenue +33% to $24.0m) with the continued transition towards higher margin SaaS revenue driving gross margins to 60% from 55% in FY22. EBITDA was broadly in line with our forecast (+201% to $3.3m) demonstrating improved operating leverage however, NPAT of -$4.0m (+18%) was a miss (BPe -$1.9m) driven by an income tax expense vs. our forecast benefit.

One of the reasons the broker is bullish on this small-cap ASX share is its large market opportunity. It adds:

In 2020, the speech-to-text segment of the language services market was forecast to be US$11.8 billion, increasing to US$14.7 billion in 2022. Key industry drivers include: growth in media consumption, higher levels of engagement with captions and increased regulatory requirements for localisation.

Medical Developments International Ltd (ASX: MVP)

Another small-cap ASX share that Bell Potter rates as a buy is this medical device company. Its analysts have a speculative buy rating and a $1.60 price target on its shares. This implies a potential upside of 82% for investors over the next 12 months.

The broker sees a big opportunity for the company to grow its Penthrox offering in the emergency department (ED) segment of the market. It explains:

Rapid onset, non-opioid mechanism and ease of administration provides significant advantage in the overburdened ED environment. Whilst there is currently limited penetration within the ED setting, this growth may be accelerated by the newly appointed sales team and its engagement with clinicians and hospital departments.

The post Buy these small cap ASX shares in September: Bell Potter appeared first on The Motley Fool Australia.

Morgans analyst Andrew Tang, who has been keeping an eye on all the action, named his last set of stocks to buy for the February reporting season:

Back in 2021 no one thought coal would become the new black

When Dalrymple Bay Infrastructure Ltd (ASX: DBI) listed on the ASX in December 2020, more than one pundit questioned how it would survive as a public company.

After all, it is the owner and operator of a coal export terminal.

But no one saw what was coming next — an energy crisis in 2022 sending any stock related to coal production soaring.

Now Dalrymple Bay shareholders are laughing, with the share price up in excess of 18.5% since the first day on the ASX, all while delivering an 8% dividend yield.

"The FY22 result delivered the substantial earnings growth we were expecting following finalisation of terminal infrastructure charge (TIC) negotiations in 2H22," Tang said on the Morgans blog. 

"Dividend per share guidance had already been provided and was unchanged (albeit the growth outlook was not reaffirmed)."

The stock is a buy for Morgans, especially considering a "forward cash yield of mid-8% and circa 6% price growth potential".

Reporting season 'easily beat our expectations'

On the same theme, coal explorer and producer Stanmore Resources Ltd (ASX: SMR) is also a buy for Tang's team, based on a sensational report to the market.

"Key CY22 financials easily beat our expectations on higher PCI [pulverised coal injection] price realisations," said Tang.

"We now forecast Stanmore to reach a net cash position during 1H23."

The Stanmore share price has more than tripled over the past 12 months, but incredibly still represents excellent value for those willing to buy now.

"Stanmore looks too cheap trading on a +25% free cash flow yield, with +30% capital upside and upside to tight/buoyant hard coking coal pricing," said Tang.

"Stanmore enjoys clear M&A advantages in the Bowen Basin and we think positioning for possible acquisitions will far out-rank dividends through 2023."

'Growing profits gets much easier from here'

Captioning technology and services provider Ai-Media Technologies Ltd (ASX: AIM) has been on a hiding to nothing the last few years.

The stock price has sunk more than 73% over the past five years. Over the past 12 months, it has seen a 40.7% decline.

However, Tang feels like it has turned a corner after seeing its software-as-a-service (SaaS) arm contribute more than 50% of the total profit growth.

"Since it's nearly double the margin of legacy and growing much faster, this means Ai-Media has cleared the critical [inflection] point in its transition to a SaaS business," he said.

"Growing profits gets much easier from here."

The business' gross profit grew both on a year-on-year basis and half-on-half.

"The company booked revenue of $29.7 million for the year, in line with our $29.5 million forecast and 8% below consensus expectations."

13.8% dividend yield? Yes, please

Kina Securities Ltd (ASX: KSL) is not a name often heard when financial stocks are discussed.

The Papua New Guinean bank incredibly pays out a 13.8% dividend yield.

Tang said its February report was "broadly solid", with a lid kept on bad debts and "an impressive ~18% FY22 return on investment".

"Kina Securities' FY22 Underlying net profit after tax (PGK106 million) was +10% on the prior comparable period and in-line with Morgans' expectations."

One headwind that the bank faces is "the lingering Papua New Guinea corporate tax issue".

But the stock is still an add for Morgans analysts, with the low share price seemingly pricing in headwinds.

"Kina Securities continues to deliver solid underlying profit growth, and trading on ~6x FY23F earnings and a >10% dividend yield, we see the stock as too cheap."

The post 4 ASX shares to stock up on after a bright reporting season: Morgans appeared first on The Motley Fool Australia.

The Ai-Media Technologies Ltd (ASX: AIM) share price is currently up 15.71% at 40.5 cents. In contrast, the S&P/ASX Small Ordinaries Index (ASX: XSO) is 1.03% in the red.

Deal between Google and this small ASX tech share

The small-cap ASX tech share jumped after it said it would become Google's lead global provider of premium live captioning and translation services for internal meetings and events.

The three-year agreement is valued at up to US$5 million. All Google employees will have access to Ai-Media's services.

But the ASX company warned that there is no guarantee that the contract will generate the full value of the agreement.

Strategic importance

It was quick to play up the "strategic importance" of the agreement between the ASX tech minnow and the global giant though.

Ai-Media's chief executive Tony Abrahams said:

We are incredibly excited to be partnering with Google, one of the world's leading technology companies, to improve the interconnectivity of its employees through our product offerings.

This is an important agreement for Ai-Media as it highlights our position as a trusted market leader, and it validates our ability to deliver high-quality and secure captioning services to a variety of global customers across different industries. Ai-Media is capitalising on the increasing demand for live captioning globally.

This agreement with Google demonstrates our product suite and technology is leading edge, and is expanding into more environments as video becomes a core communications tool for business.

ASX tech shares gaining traction

ASX tech shares have started to rebound following their brutal sell-off early this year. Deals like this show that there is value to be found as many of these shares are still nursing big losses.

In another boost to confidence, some ASX tech shares have started to attract takeover interest. These include the MOQ Ltd (ASX: MOQ) share price, and more recently, the Nearmap Ltd (ASX: NEA) share price.

Ai-Media share price snapshot

There seems like there may be a lot more room for the AI-Media share price to run. The shares have shed over 57% over the past year.

In contrast, the S&P/ASX All Technology Index (ASX: XTX) has fallen 27% over the same period.

The post Guess which ASX tech share is soaring 16% on a new Google deal appeared first on The Motley Fool Australia.

Shares in the company are currently trading at 68 cents, down 3.13%.

Ai-Media provides captioning, transcription, and translation services to companies around the world using a cloud-based technology platform.

Let's take a look at what may be weighing on the Ai-Media share price today.

Djokovic leak controversy

Investors could be reacting to news that Ai-Media is investigating whether a staffer leaked a private conversation between Seven Network Holdings Ltd (ASX: SVW) newsreaders about the World No. 1-ranked tennis star, Novak Djokovic, The Australian has reported.

Ai-Media and Seven held high-level discussions about the matter on Wednesday night, the publication said.

In the footage, which has been going viral on social media, newsreader Rebecca Maddern comments:

Whatever way you look at it Novak Djokovic is a lying, sneaky… it's unfortunate that everybody else stuffed up around him. To go out when you know you are COVID-19 positive…

Djokovic has been dominating the news in recent days after his controversial entry into Australia to play in the Australian Open.

The Federal Immigration Minister, Alex Hawke, is considering whether to use his veto rights to cancel Djokovic's visa. A decision is expected today, according to a News Corp report.

My Foolish colleague James noted Ai-Media is a growing small-cap share to watch this week. Broker Bell Potter has a buy rating on the company and a $1.50 target for the Ai-Media share price.

Ai-Media share price snapshot

The Ai-Media share price has fallen by 27.66% in the past 12 months. It is down 5.56% over the past 4 weeks.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 12% in the past year.

Ai-Media has a market capitalisation of about $145 million based on the current share price.

The post Ai-Media (ASX:AIM) share price slides amid Novak Djokovic leak saga appeared first on The Motley Fool Australia.

With that in mind, here are two small cap ASX shares that could be worth watching closely. Both have been tipped to climb notably higher from current levels. They are as follows:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap ASX share to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets. The company's cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics.

These services are in great demand from end users. As a result, at the last count, Ai-Media Technologies was delivering 7 million minutes of live and recorded media content, online events, and web streams each month. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares. This is more than double its current share price of 70 cents.

SILK Laser Australia Limited (ASX: SLA)

Another small cap ASX share to watch closely is SILK Laser. It is one of Australia's largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. SILK's five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products.

SILK has also been experiencing strong demand for its services, despite the pandemic. This has underpinned stellar sales and profit growth since its IPO. The good news is that management still sees significant room to expand its clinic over the next decade to drive further growth. Wilsons is bullish on SILK and has an overweight rating and $5.25 price target on its shares. This compares to the latest SILK share price of $4.21.

The post 2 growing small cap ASX shares to watch appeared first on The Motley Fool Australia.

Here's why they could be worth getting better acquainted with:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets. The company's cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares.

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company. It provides a unified platform to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. ELMO has been a strong performer in recent years and looks well-placed in the future. This is due to acquisitions and favourable industry tailwinds. Morgan Stanley has an outperform rating and lofty $7.80 price target on its shares.

Serko Ltd (ASX: SKO)

Serko could be a small cap share to watch. It is an online travel booking and expense management provider with a number of quality solutions which have significant market opportunities. Another positive is that it recently signed a deal with travel booking giant Booking.com. This has the potential to be a game-changer over the coming years. Ord Minnett recently put a buy rating and $8.10 price target on Serko's shares.

The post 3 small cap ASX shares to watch in January appeared first on The Motley Fool Australia.

With that in mind, here are three small cap ASX shares that analysts rate highly:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap ASX share to watch is Ai-Media Technologies. This global media access provider's cloud-based technology platform offers live and recorded captioning, transcription, subtitles, translation and speech analytics. And these services are certainly in demand! So much so, globally, Ai-Media technology delivers 7 million minutes of live and recorded media content, and online events and web streams every month. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares.

Mydeal.Com Au Ltd (ASX: MYD)

Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. At the end of FY 2021, MyDeal had more than 1,800 sellers on its platform with over 6 million product SKUs listed across over 2,000 categories. And with its customer numbers nearing 1 million, the company looks well-placed to benefit from the shift to online shopping over the long term. The team at Morgans is positive on the company's outlook and has an add rating and 90 cents price target on its shares. It feels MyDeal would be a good option for investors that want exposure to a high growth ecommerce opportunity with a strong balance sheet.

SILK Laser Australia Limited (ASX: SLA)

A final small cap ASX share to watch closely is SILK Laser. It is one of Australia's largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. SILK's five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products. Demand has remained strong for its services during the pandemic, underpinning stellar sales and profit growth. The good news is that management still sees significant room to expand its clinic over the next decade. This gives it a long runway for growth. Wilsons is bullish on SILK and has an overweight rating and $5.25 price target.

The post 3 exciting small cap ASX shares analysts rate highly appeared first on The Motley Fool Australia.

Here's why they could be worth getting better acquainted with:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. Its cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics to customers across the ANZ, North American, EMEA and Asia markets. These customers range from universities, schools, government and non government organisations, SMEs and individual content producers, events, global and domestic broadcasters and OTT streaming services.

Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target on its shares. This compares to the latest Ai-Media Technologies share price of 72.5 cents.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap to watch is Bigtincan. It is a provider of enterprise mobility software that allows sales and service organisations to improve mobile worker productivity through smart devices. The company notes that global businesses including Nike, Guess, Prudential, and Starwood Hotels trust Bigtincan to enable customer-facing teams to intelligently prepare, engage, measure and continually improve the buying experience for their customers.

Morgan Stanley is a fan of Bigtincan and has an overweight rating and $2.10 price target on its shares. This is notably higher than the current Bigtincan share price of 98.5 cents.

Serko Ltd (ASX: SKO)

A final small cap to watch is this online travel booking and expense management provider. Serko recently raised NZ$75 million to support its growth strategy. This includes Serko's global marketplace strategy, which is aiming to transform the company from an online booking tool into a distributed marketplace.

Ord Minnett appears pleased with these plans. It recently retained its buy rating and lifted its price target on Serko's shares to $8.10. This compares to the current Serko share price of $6.49.

The post 3 buy-rated small cap ASX shares with major upside potential appeared first on The Motley Fool Australia.

At the time of writing, Ai-Media shares are down a further 9.68% to 70 cents today. In total, the company — which provides live and recorded captioning, transcription, and translation services — has shed almost a third of its market value over two days.

What's going on with Ai-Media?

Following Ai-Media's annual general meeting presentations, leading Australian investment firm Morgans released an uncommissioned research report on 12 November.

The report revealed forward-looking financial projections for FY22. It stated that revenues would come to $61.6 million, revised from $70.5 million from the last research report in August. Additionally, group earnings before interest, tax, depreciation, and amortisation (EBITDA) are forecasted to be $0.6 million, down from $9.6 million. The Ai-Media share price has been spiralling since the report's release.

Ai-Media responded to the report today saying it has not published any earnings guidance for FY22 or beyond.

The company said it felt the need to respond to the report given the extreme volatility in its shares.

Despite registering an operating cash-flow loss of $0.025 million for the first quarter of FY22, Ai-Media is aiming for a turnaround. It hopes to achieve a positive operating cash flow for the remainder of FY22 and onwards.

The strategy is to increase revenue from services to higher-margin recurring software-as-a-service (SaaS) revenue. This is to be driven by iCap benefits through the newly-launched SubSilo platform.

Ai-Media is continuing to invest in its product suite and technology to take advantage of the global growth opportunities. Earlier this month, the Indian government announced it will set live captioning standards, accelerating potential revenue streams.

Ai-Media share price summary

Ai-Media shares are down by more than 30% over the past 12 months. It is a far cry from when the company's shares reached a 52-week high of $1.15 in late October.

Based on today's price, Ai-Media commands a market capitalisation of roughly $162 million and has approximately 209.51 million shares outstanding.

The post The Ai-Media (ASX:AIM) share price is falling another 10% today. Here's why appeared first on The Motley Fool Australia.

With that in mind, here are three small cap ASX shares that could be worth watching closely:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets. The company's cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares.

Mydeal.Com Au Ltd (ASX: MYD)

Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. MyDeal currently has more than 1,800 sellers on its platform with over 6 million products listed across over 2,000 categories. Thanks to this strong offering, its growing active customer base, and the shift online, MyDeal reported a 111% increase in gross sales to $218.1 million and a 119% jump in gross profit to $33.3 million in FY 2021. It has since built on this, reporting a 49% quarter-on-quarter increase in gross sales to $68.5 million during the first quarter. Also continuing to grow were its customer numbers, which had reached ~930,000 at the end of the period. The team at Morgans is positive on the company's long term outlook and has an add rating and 90 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap to watch is Serko. It is an online travel booking and expense management provider behind the Zeno Travel and Zeno Expense platforms. Serko's Zeno Travel platform provides AI-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas Zeno Expense allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. With travel markets rebounding and a major deal with travel giant Booking.com recently commencing, Serko appears well-placed for growth in the coming years. Macquarie currently has an outperform rating and NZ$8.31 (A$8.02) price target on its shares.

The post 3 exciting small cap ASX shares for your watchlist appeared first on The Motley Fool Australia.

Here's why these small cap ASX shares are ones to watch:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets

The company's cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics.

Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares. The broker was pleased with its performance in FY 2021 and remains positive on the future.

It commented: "We maintain our Buy recommendation and positive outlook on AIM. We remain attracted to AIM's long-term growth strategy driven by its ability to apply proprietary technology in providing high accuracy, near real-time voice transcription services."

Mydeal.Com Au Ltd (ASX: MYD)

Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. As per the company's most recent update, MyDeal had more than 1,800 sellers on its platform with over 6 million product SKUs listed across over 2,000 categories.

This strong offering and the shift online helped drive a 111% increase in gross sales to $218.1 million and a 119% jump in gross profit to $33.3 million in FY 2021.

The team at Morgans is positive on the company's long term outlook. As a result, it currently has an add rating and 90 cents price target on its shares.

The broker said: "We don't expect MYD to turn a profit in the current year (we never did), as all this investment in growth comes at a cost. But, to us, this story is not about short-term profitability and dividends. It's about creating a market leading ecommerce platform that can be the foundation of substantial earnings growth. We appreciate this is not an investment that will appeal to everyone. But for those that want exposure to a high growth ecommerce opportunity with a strong balance sheet, we think MYD fits the bill."

The post 2 buy-rated small cap ASX tech shares you need to know appeared first on The Motley Fool Australia.

At the time of writing, the Ai-Media share price is trading up 3.59% at $1.01.

Ai-Media provides live and recorded captioning, transcription and translation services. Its technology combines artificial intelligence (AI) and human expertise to deliver speech-to-text as accurately as possible.

Right now, Ai-Media is the biggest captioning provider in the Australian market and has a growing international presence, capturing more than 1 million minutes of live and recorded media every month.

Details of the acquisitions

The company's new acquisitions – Caption IT and CaptionAccess – are strategic within the US market.

Caption IT is based in Wisconsin and offers real-time, offline and post-production captioning, transcription and translation services. The company generates most of it's revenue from corporate customers. White label product sold via resellers in the technology space are a large part of this revenue. 

CaptionAccess is based in Illinois and is owned and managed by people who are deaf and hard of hearing. It provides communication services to the government, corporate and education sectors. Revenue comes mainly from enterprise customers in these sectors and particularly in the university space, where it has 23 clients.

Key terms

The key terms of the acquisition agreements include the following points:

• Total purchase consideration for the acquisitions, on a cash and debt free basis, is US$1.9 million comprising approximately US$1.6 million in cash and US$0.3 million in AIM shares with the number of AIM shares issued to be determined based on the 30-day VWAP to 11 December 2020 (consideration shares).
• The consideration shares will be subject to the three-year escrow agreement applying to board and senior management, as set out in the Ai-Media prospectus.
• 10% of the total purchase consideration will be retained in escrow for a 12-month period to cover any breaches of representations and warranties. There are no earnout amounts associated with the acquisitions.
• The acquisitions are expected to be completed on 4 January 2021 and will be funded by existing cash reserves.

Rationale behind the acquisitions

The rational behind this move was to grow revenue and expand the company's presence in North America.  Together, the acquisitions represent complementary additions to Ai-Media and help to achieve a number of goals for the company. Caption IT has a "top tier" corporate customer base and CaptionAccess is well positioned to service the education space. 

These two companies will directly help Ai-Media to expand its high-quality live captioning services in the US market. According to Ai-Media, the US is a fast growing market for these services and one that is directly in their target zone. The acquisitions are consistent with strategic goals to pursue consolidation opportunities that can complement the existing technology platform.

Ai-Media technology will help to leverage the already strong growth recorded by these new companies.

Earlier this year, Ai-Media completed another acquisition of Alternative Communication Services (ASC) to further enhance the US footprint. These latest acquisitions continue the expansion efforts.

Caption IT and CaptionAccess are expected to produce revenue of around US$2.2 million this calendar year. This is to be added to AI-Media's revenue for six months of FY21.

This revenue increase is incremental to the current revenue produced by Ai-Media, which will account for more than 95% of the total, even after this acquisition. It's complementary, but not majorly altering of the bottom line. AI-Media is expected to report around A$43.8 million in FY21. As this is incremental revenue, it's not yet known what kind of long term affect it might have on the AI-Media share price. 

Management commentary

Ai-Media CEO and co-founder Tony Abrahams said North America now made up around 50% of the company's total revenue.

Both CaptionAccess and Caption IT have been built on foundations of high-quality service delivery to loyal enterprise customers with values and cultures that are strongly aligned with Ai-Media.

Following our successful integration of ACS in North America in recent months, I am excited that Ai-Media can provide the infrastructure and scalable technology platform to enable these great businesses to continue to accelerate their growth in the years ahead.

We continue to see strong demand for Ai-Media's services across all regions, in particular in live enterprise where COVID-19 restrictions have accelerated the adoption of video as a key communication tool for business and the education sector.

Caption IT Founder and CEO Maureen DeRuyter added:

Following years of strong growth with top tier enterprise customers, we knew we needed to partner with a great technology business to provide the scale to continue to grow. Ai-Media's demonstrated success with the recent ACS acquisition has given us enormous confidence to further enhance the excellence in service and quality that Caption IT is known for.

CaptionAccess founder and CEO Bill Graham said:

As a proud deaf business owner with Disability Owned Business Enterprise (DOBE) Certification, it was important for me to partner with a business that shares our community roots and our values, as well as focusing on delivering the highest quality services to our customers who rely on us to participate equally in education and at work.

Ai-Media share price

The Ai-Media share price has been on a downward slope since listing on the ASX in September this year. Shares listed at $1.23 and have slipped as low as $0.95 before rallying today. 

The post AI-Media (ASX:AIM) share price is up 3% on US acquisitions update appeared first on The Motley Fool Australia.

The captioning tech and services provider, better known as AI-Media, sent a memo Monday to its customers that it's struggling with the workload.

"While we continue to strive for 100% coverage, it has become quite challenging to cover all events, especially those with short turn-around times," the memo read.

"If you're planning to use our live enterprise services, please let us know with as much notice as possible and we will do our best to meet your needs."

As a workaround, the memo suggested clients consider retrospectively captioning from a recording of the event or its transcription service as "high-quality alternatives".

The new public company also stated it was training "a number of new captioners" and upgrading its technology.

"We really appreciate your patience during this time," stated the memo.

"Please know that we understand the importance of your work and we are doing our best to meet the needs expressed."

The Motley Fool understands that the bottleneck is on the demand side, and the company is currently recruiting additional staff.

AI-Media did not comment on the record to The Motley Fool.

AI-Media listed on the ASX last Tuesday with a market capitalisation of $177.4 million and an initial share price of $1.23. It was down 2.96% Monday, to sit at $1.31 after the close of trade.

What does AI-Media do?

Alex Jones, who was born deaf, identified the need for better captioning technology. He teamed with Tony Abrahams in 2003 to establish AI-Media.

Abrahams is still at the helm as chief executive officer. 

More than $50 million has been invested since 2009 into its main product – a cloud-based artificial intelligence platform.

The tech is combined with human captioners, transcribers and translators to provide the end result to customers.

"Using a combination of machine and human curation provides levels of accuracy that are greater than machines alone," the prospectus read.

"This level of accuracy is a requirement to service AI-Media's enterprise customers."

AI-Media reported pro-forma revenue of $37.9 million for the 2020 financial year, while posting a $8.6 million net loss after tax. 

It forecasts a loss of $5.8 million for the 2021 financial year.

The post New ASX tech company warns customers it can't cope appeared first on The Motley Fool Australia.

Over in the United States, things are no different. Fresh from the blockbuster listings of ride-sharing giants Uber Technologies and Lyft last year, just last week we witnessed one of the most spectacular IPOs in history with Snowflake Inc. Snowflake shares were set alight when it hit the NYSE boards last week, with the shares quickly doubling (and nearly tripling) from the floating price of US$120 to a high of US$319.

US and ASX IPOs are exciting and always attract news and coverage when they go ahead. It's the investing equivalent of a debutante ball, minus the gowns.

But they are almost always a bad idea, in my opinion. Especially for newer, inexperienced investors.

IPO or IP-NO?

Well, it's to do with how an IPO works. See, a company that is about to list on an exchange already has shares. They're just not publically available. They're usually held by a mix of company insiders and founders, together with institutional investors that have funded the company's expansion until that point. When the IPO process begins, those investors are the ones offering the shares at the IPO price. Normally, no (or very few) new shares are created on IPO day. Existing shareholders are just offloading the vast majority to the general public.

So you have a giant share sale, orchestrated by people who already own the shares and are usually looking to sell most or all of them. Guess what. That means that the IPO will almost always be designed to maximise value for those shareholders. And that's at the expense of anyone looking to buy into the IPO. As such, almost no IPOs are done at 'fair value'. Rather the IPO share price is selected for the maximum benefit for those investors looking to cash out.

This means that most IPOs are done to shortchange retail investors. It's no coincidence that most companies who IPO tend to trade below the price at which they IPOed for a long time. We see this today with both Uber (which IPOed at US$40 and trades for US$37 today), and Lyft (which IPOed at nearly US$80 and now sells for just over US$30).

Foolish takeaway

I know IPOs can be exciting, but for the reasons I've outlined, I think most investors should stay away, at least until the dust settles. Judging by what's happened with past IPOs like Uber, Lyft and Laybuy, you'll probably get the chance to invest in these companies for a cheaper price down the road. So unless you're super keen on a new company, I wouldn't try and 'play the IPO'. Chances are you'll get played trying.

The post Why ASX IPOs are almost always dangerous for new investors appeared first on The Motley Fool Australia.

After listing on the share market at a price of $1.23 per share, the technology company's shares are up 10% to $1.39 currently.

They were up as much as 23% to $1.51 at one stage shortly after listing.

What is Access Innovation?

Founded in 2002, Access Innovation is a global provider of technology-driven live and recorded captioning, transcription, and translation services.

Its technology platform combines artificial intelligence and human expertise to deliver speech-to-text accuracy.

Access Innovation is the biggest captioning provider in the Australian market, with clients including major free-to-air and pay television networks.

It also has growing international footprint, with offices in the US, UK, Canada and Singapore. Globally, it provides captioning for nearly 1 million minutes of live and recorded media content, online events, and web streams every month.

Why did it launch an IPO?

Today's initial public offering (IPO) raised gross proceeds of $65.5 million at a price of $1.23 per share. Based on the current share price and its 144.4 million shares on issue, Access Innovation has a market capitalisation of approximately $200 million.

The funds from the IPO will be used to continue its current growth trajectory, particularly in offshore regions. It will also support the ongoing developments of its technology platform to provide a wider range of services for its customers.

Management notes that the IPO attracted strong demand from domestic and international institutions, retail investors, along with the ongoing support of existing shareholders and employees.

The company's Chair, Deanne Weir, commented: "We are delighted with the outcome of the IPO and by the strong support shown by both institutional and retail investors. Our listing today on the ASX marks an important milestone for Ai-Media, supporting our global growth strategy along with our continued investment in product innovation and our technology platform. We want to help build an inclusive world by making all content accessible to all people everywhere."

This sentiment was echoed by its Co-founder and Chief Executive Officer, Tony Abrahams.

He said: "We're all excited by the opportunities ahead of us in a growing global market, by harnessing the power of our high-quality, security-accredited and scalable proprietary technology to deliver great outcomes for our customers and our shareholders."

The post Access Innovation (ASX:AIM) share price rockets 23% higher on ASX debut appeared first on The Motley Fool Australia.

Access Innovation Holdings Limited (ASX: AIM) is scheduled to float on 15 September with an issue price of $1.23 per share.

The Motley Fool has confirmed with the initial public offer (IPO) information line that the listing will happen Tuesday as planned.

AIM is best known as AI-Media, a company that develops technology to provide captioning and transcription services.

AI-Media did not return The Motley Fool's requests for comment.

However, its prospectus and publicly available information gives some clues about its situation as it goes public.

What does AI-Media do and who started it?

AI-Media was founded in 2003 by Alex Jones and Tony Abrahams in Sydney. Jones was born deaf and recognised the gap in the market for accessibility technology.

Abrahams is still hands-on, running the joint as chief executive officer. Before the float he owned almost a quarter of AI-Media, but will now cash in more than $340,000 from selling down to 19.2%.

The main game for the company is its cloud-based software that combines artificial intelligence, machine learning and human intervention that provides "captioning, transcription and translations".

More than $50 million has been poured into the technology platform since 2009.

AI-Media runs business lines that respectively deal with content from "live broadcast", "live enterprise" and "recorded" sources.

"Using a combination of machine and human curation provides levels of accuracy that are greater than machines alone," the prospectus reads.

"This level of accuracy is a requirement to service AI-Media's enterprise customers."

AI-Media reported a pro-forma forecast of $37.9 million in revenue for the 2020 financial year, while it predicted $43.8 million for 2021. 

It will run a $8.6 million net loss after tax for 2020, and forecasts losing $5.8 million for the 2021 financial year.

Demand for captioning on the rise

The demand for captioning is on the rise with a significant rise in streaming video in recent years, according to AI-Media. Internationally, hard-of-hearing people make up 6% of the population, but this is predicted to double between by 2050.

"The media and entertainment industry also has to contend with regulatory requirements that mandate equality of access to content for hard-of-hearing individuals," states the company.

"Legislation and regulations in many markets require that an increasing percentage of content requires captions, including that delivered through new channels (such as VOD), as well as the more established terrestrial and pay-TV sectors."

The company is also seeing demand from the corporate and education sectors.

Acquisition and private capital raising this year

In May, AI-Media acquired US captioning and interpretation company Alternative Communications Services (ACS).

While the purchase price was not disclosed, AI-Media's financial year 2020 revenue increased by 59% after the transaction.

AI-Media this year also raised about $10 million from external investors, including private investors CVC Emerging Companies Fund in the UK and Anzu Partners in the US.

Foxtel's role in AI-Media's early success

One of AI-Media's first clients was subscription television provider Foxtel.

"In 2003, the costs of captioning were too high for the emerging Pay TV industry. The new Pay TV providers were faced with many more channels and smaller audience shares, but were confronted with the same costs to produce an hour of captioning."

Jones and Abrahams proposed cutting captioning costs by editing existing international transcripts. That solution allowed Foxtel to provide more captions across as many channels as possible.

The co-founders also showcased their technology in 2010 on the ABC television show New Inventors, winning their episode.

AI-Media now has offices in Australia, USA, UK, Canada, Singapore and Norway. It employs about 160 full-time staff plus a pool of 2,000 contractors, casuals and freelancers.

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