Anoto Announces Outcome of Rights Issue: Subscription Rate, Guarantee Commitments, and Future Capital Expenditure Plans

Stockholm—Swedish technology company Anoto Group AB (publ) has announced the outcome of its rights issue, which aimed to raise approximately SEK 50 million. The subscription period ended on 19 December 2024, and the company has provided details on the subscription rate, guarantee commitments, and future capital expenditure plans.

The Rights Issue was subscribed to approximately 37.5 percent, with 154,891,590 shares subscribed for with subscription rights and an additional 623,720 shares subscribed for without the support of subscription rights. This relatively low subscription rate can be attributed to several factors, including the extended subscription period, the subscription price, the company's recent history of accounting fraud, and its ongoing financial losses.

The subscription price for the Rights Issue was set at SEK 0.12 per share, which was the same as the subscription price in the completed Rights Issue. While this price may have been competitive, it is possible that investors were hesitant to subscribe due to concerns about the company's financial health or the potential dilution of their existing shares.

Anoto's recent history of accounting fraud and suspected misconduct may have also contributed to a lack of investor confidence. In December 2024, the company commented on a report by the Swedish Financial Supervisory Authority (SFSA) regarding suspected accounting fraud in the financial year 2020. This negative publicity could have deterred potential investors from participating in the Rights Issue.

The company's financial performance and prospects may have also played a role in investor sentiment. In the interim report for January-September 2024, Anoto reported a net loss of SEK 11.2 million, compared to a net loss of SEK 14.5 million in the same period the previous year. While the company's financial performance has improved, the ongoing losses may have contributed to a cautious approach by investors.

In addition to the subscription rate, Anoto has received guarantee commitments from investors, consisting of a so-called bottom guarantee of approximately SEK 21.2 million (42.6% of the Rights Issue) and a top guarantee of approximately SEK 13.6 million (27.3% of the Rights Issue). These guarantees ensured that a certain portion of the Rights Issue would be subscribed to, even if there was less demand from other investors. This likely contributed to the overall subscription rate of approximately 37.5%.

Underwriting commitments of 259,308,520 shares (62.5% of the Rights Issue) were utilized, further boosting the subscription rate. These commitments, made by underwriters, guaranteed that they would purchase any unsubscribed shares, ensuring that the Rights Issue would be fully subscribed.

The utilization of guarantee commitments will have a positive impact on Anoto's debt-to-equity ratio and overall financial leverage. The increase in equity, due to the guaranteed amount being used to issue new shares, will be greater than the increase in debt (if any). This will decrease Anoto's reliance on debt financing and improve its financial risk profile.

The cash compensation or directed set-off issue for guarantee commitments could potentially influence Anoto's future capital expenditure plans. The additional funds from the cash compensation or directed set-off issue could be allocated towards strengthening the company's financial position and implementing its business plan. This could include investing in research and development, expanding its product offerings, or entering new markets.

However, the exact allocation of these funds will depend on Anoto's strategic priorities and the overall financial situation of the company. The company may choose to prioritize other areas of expenditure, such as operational expenses or debt repayment, based on its assessment of the most effective use of funds.

The subscription price for shares issued as compensation for guarantee commitments is set at SEK 0.12 per share, which corresponds to the subscription price in the completed Rights Issue. This price is lower than the current market price of Anoto's shares, indicating that the company is offering a discount to those who provided guarantee commitments. This discount could potentially dilute the value of existing shares, as the number of outstanding shares increases without a corresponding increase in the company's market capitalization.

However, the impact on Anoto's shareholder value and future stock performance will depend on various factors. If the company successfully utilizes the proceeds from the Rights Issue to strengthen its financial position and implement its business plan, it could lead to improved operational performance and increased shareholder value in the long run. Additionally, if the company's stock price appreciates due to positive developments, the dilution effect of the discounted shares issued as compensation for guarantee commitments may be offset.

In conclusion, Anoto's rights issue subscription rate, guarantee commitments, and future capital expenditure plans will have an impact on the company's financial health and shareholder value. The company's ability to execute its plans and the overall market conditions will determine the extent of this impact. Investors should closely monitor Anoto's progress and assess the company's strategic decisions to make informed investment decisions.