Rosslyn Data Technologies (LON: RDT) hopes to raise at least £2.7m from a placing and subscription at 0.5p/share and a retail offer to existing shareholders could raise up to £500,000 more. The current share price is 0.5p (0.45p/0.5p) and the cloud-based data analytics company is valued at £1.7m. In May 2020, the company raised £7.3m at 5p/share.
Non-exec chair James Appleby will subscribe for 21 million shares and non-exec director Bernard Quinn is subscribing for two million shares. There are also plans for a 50-for-one share consolidation. There will be a resolution at the general meeting on 18 September to gain shareholder approval.
On top of the share issue, there is a proposed issue of 10% convertible loan notes to raise £600,000 from Hargrave Hale AIM VCT, Octopus AIM VCT and Octopus AIM VCT2. The conversion price is the lower of 0.5p or the issue price of another fundraise.
Funding
Portsmouth-based Rosslyn Data Technologies has a new management team that wants to grow annualised recurring revenues to between £12m and £15m, compared with £2.4m at the end of April 2023. That is based on a trading statement because the accounts have not been published.
House broker Cenkos estimates net cash of £800,000 at the end of April 2023 and £695,000 at the end of June. Much of that cash is likely to have been used up because of continuing losses. The monthly cash burn was £195,000 in June.
The business has been refocused on a SaaS model and costs reduced. The additional cash will be spent on product development and marketing.
Retail offer
The retail offer is available via intermediaries, which will be listed on https://www.bookbuild.live/deals/9Y7561/authorised-intermediaries. There are currently intermediaries awaiting confirmation even though the bookbuild has commenced. The retail offer is open until 4.30pm on 5 September. The amount being raised is £500,000 so that the company does not have to publish a prospectus. The minimum subscription is £500.
This is a highly dilutive fundraising. The share consolidation could lead to a decline in the share price after it comes into force. That could provide a buying opportunity at below the 25p equivalent consolidation price.