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TM, see my earlier post and also comments from HH. I think there will be some tactics at play here as to when to exercise. If SP holds > $15 for a sustained period, then Vela can profit from that, given shares should be issued at maximum of $15. It means that Vela could end up with shares valued north of $4.8m (notional £4m).
TwistyMinkle, The option is exercisable in whole at any time from the close of the Merger (the “Effective Time”) until the earlier of (i) the date that is six (6) months from the Effective Time, and (ii) February 7, 2024.
Plenty of time to make that decision
Yes, just at this stage don't know how many shares will be issued and at what price. Whatever the combination, the value will be in the region of $4.8m. Then consider the fx rate, the USD has been gaining against GBP so that is good news as well.
Firstly, the option has not yet been exercised (or at least announced). Full details in the ipo document link from last RNS.
On April 20, 2023, Conduit entered into an agreement with Vela Technologies PLC (“Vela”) which granted Vela the right, but not the obligation, to sell its 8% royalty interest in the Covid Asset back to Conduit (the “Vela Put Option”). In accordance with the Vela Put Option, Vela paid a one-time, non-refundable option fee to Conduit of $0.5 million (£0.4 million). Total consideration payable to Vela upon exercise of the Vela Put Option is $4.8 million (£4.0 million) worth of shares of New Conduit common stock, following the consummation of the Merger at a price per share equal to the volume-weighted average price per share over the ten (10) business days prior to the date of the notice of the exercise of the option. The Vela Put Option contains a provision that in no event shall the price per share for the consideration shares be lower than $5 or higher than $15. The option is exercisable in whole at any time from the close of the Merger (the “Effective Time”) until the earlier of (i) the date that is six (6) months from the Effective Time, and (ii) February 7, 2024.
https://www.sec.gov/Archives/edgar/data/1896212/000149315223027856/form424b3.htm
The ipo doc outlines the put option numbers, Basically, shares valued at $4.8m calculated on exercise date based on formula with lower/upper price limits. The £4m number was a notional amount only so also need to consider GBP/USD rate. X shares @ $Y = $4.8m at time of exercise is my simple understanding.
As a result of this contract, and the more cautious technology training market conditions, the Group now expects revenue and profits for the year as a whole to be significantly below current expectations.
https://www.lse.co.uk/rns/CODE/interim-results-i5makhm8g7diqd1.html
Not long to go now to Conduit meeting, maybe some interest from that if the results go the right way. Quarterly investment update should be interesting to see what shares were sold off to fund the director fees. Hopefully they kept CODE & ENSI intact given recent upticks.
Approaching one year since last mention of appointing an iNED. There was first mention even earlier than this I seem to recall but nothing since - why the delay, is such appt necessary now, perhaps as part of a wider re-shuffle?
https://www.lse.co.uk/rns/VELA/board-change-rx0y0dhkpkhc35c.html
As for a strategic update
"The Board is now reinstating the strategy outlined in the announcement of 26 September 2019. The Board believes that the combined value of Vela's listed investments and cash resources may prove attractive to third parties."
How far will £50k go these days?
https://www.lse.co.uk/rns/VELA/strategic-update-o3zzo23mbforjq1.html
GLA
@Unclejim, Thanks for update, link to a news article on re-schedule.
https://finance.yahoo.com/news/murphy-canyon-acquisition-corp-announces-203000044.html
If the merger happens and SP reacts positively, will it hold for the duration til the ipo? As mentioned by others, lots of holders will be looking for an exit. May be an opportunity for a double dip with view to sell up next week and then look to get back in cheaper closer to ipo. Worth noting the meeting is at 10am or 3pm UK time so news may filter thru after market closes or even pre market on 14th.
Initial investment of £2.35m + £0.4m option are already baked into NAV which means it will increase by the incremental uptick of £1.25m, not the whole £4m. On the plus side, the whole £4m becomes liquid and should help with the SP re-rate.