Why the Archtis (ASX:AR9) share price is sinking 9% today

A woman sits on her lounge in front of her laptop looking concerned about the falling Archtis share price

The Archtis Ltd (ASX: AR9) share price is deep in the red after the software security provider came out of a trading halt today.

At the time of writing, the Archtis share price is down a sizeable 9.43% to 24 cents.

Let’s take a look at what Archtis released to the ASX this morning.

What did Archtis announce?

Investors are dropping Archtis shares on news of the company’s latest capital raising.

According to its release, Archtis advises it has received firm commitments to raise $6.5 million through a share placement.

The offer was presented to domestic and international institutional and sophisticated investors. The issue price is 23 cents apiece. This equates to roughly 28.26 million new ordinary shares to be added to the company’s registry.

In addition, Archtis will offer a share purchase plan (SPP) to existing shareholders to raise a further $1.5 million on the same terms as the placement.

Participants in the placement and SPP will also be able to receive 1 option to acquire an Archtis share for every 3 shares received under either offer. This will be exercisable at 35 cents, expiring 2 years from the date of issue.

The funds from the equity raising will support a number of growth initiatives for the company. These include:

  • Launch the Kojensi platform into key regional markets of the United States and the United Kingdom
  • Explore and execute a merger and acquisition strategy to achieve annual recurring revenue (ARR)
  • Build pipeline and close opportunities in conjunction with the Microsoft field through IP Co-sell.

Archtis managing director and CEO, Daniel Lai commented:

We were pleased to see such strong demand from domestic and international institutions following our recent decision to be quoted on the OTCQB Market. A diversified shareholder base bolsters our strategic efforts to scale our information security technologies in the US and globally.

By expanding our market reach with Kojensi, NC Protect and cp. Protect, we expect to leverage our success with Australian Defence in other geographical regions and accelerate pipeline through our alliance with Microsoft IP Co-sell.

About the Archtis share price

The Archtis share price retreated between January and July 2021 following the company’s expanded global operations.

The share price regained ground in August and September but has since been on a continuing decline. Archtis shares are now down 22.6% year to date.

Archtis has a market capitalisation of about $56.08 million, with more than 233.67 million shares on its books.

The post Why the Archtis (ASX:AR9) share price is sinking 9% today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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