4DS Memory Shares Plunge 10% After Capital Raising Announcement

January 17, 2025 11:37 AM AEDT | By Team Kalkine Media

4DS Memory Shares Plunge 10% After Capital Raising Announcement — Image source: © Poringdown | Megapixl.com

Why the Sharp Decline?

The drop comes in the wake of the company raising $6 million via a share placement to institutional and high net worth investors. Shares were issued at 3.6 cents each, representing a 12.2% discount to the last closing price of 4.1 cents and a staggering 55% discount from 8 cents—the price at which the stock was trading before 4DS abandoned an earlier capital raising in December.

The decision to delay the previous capital raising appears to have backfired, resulting in significant shareholder wealth erosion. Today’s announcement reflects the company’s efforts to secure necessary funding, but the steep discount has left investors wary.

Details of the Capital Raising

The placement includes one free attaching option for every share issued, exercisable at 3.6 cents with an expiry of 28 February. Management highlighted strong investor interest, with demand exceeding available shares.

Additionally, 4DS plans to raise an additional $2 million through a Share Purchase Plan (SPP), offering the same terms as the placement, including free options. An institutional fund has committed to subscribe for up to $1 million in any shortfall securities from the SPP.

Why Raise Funds?

The capital raised will be directed toward advancing a design agreement with Infineon Technologies, a significant step for the company. Infineon will allocate resources to design a custom ReRAM memory test chip tailored to 4DS's specifications. This aligns with 4DS's strategic focus on its proprietary ReRAM (Resistive Random-Access Memory) technology, which has potential applications in next-generation memory solutions.

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