capAI Plc Issues 400 Million Equivalent Shares to Executive Chairman
Why we think this is bad
The equity raise is significant, representing over 10% dilution for existing shareholders. The lack of information on the raise price is concerning, as it makes it difficult to assess the discount and the market's appetite for the new shares. The purpose of the raise being to satisfy an existing obligation, rather than for new growth capital, is also a potential negative. Given that Dukemount Capital Plc is a micro-cap company, a large discounted raise would be a very negative sign, and the omission of the raise price is a concerning factor.
Key Points
- Allotment and issue of 400,000,000 Equivalent Shares to Executive Chairman Richard Edwards
- Shares issued under exemption from prospectus requirement and rank pari passu with existing Ordinary Shares
- Raise size represents over 10% dilution for existing shareholders
- Lack of information on raise price is concerning
Summary
capAI plc has announced the allotment and issue of 400,000,000 Equivalent Shares to its Executive Chairman, Richard Edwards, in satisfaction of the company's obligations under a Stock Loan Agreement. The Equivalent Shares have been issued under an exemption from the requirement to issue a prospectus and rank pari passu with the existing Ordinary Shares. The company has not provided the raise price, making it difficult to assess the discount to the previous closing price of 0.5299999713897705 GBp. The large size of the raise, representing over 10% dilution, is a significant concern, especially given that Dukemount Capital Plc is a micro-cap company.