I think theres a big misunderstanding here on how the ATM works. Those shares arent given away. They are for hedging purposes. Ultimately they will be bought back for nil. See below
Why are these collateral shares issued you may ask? Well because at any point in time now RHT can choose to turn on an 'evaluation period' during this period they choose a min floor price to raise money, importantly though shares arent issued yet. Acuity is selling shares on behalf of RHT based on the specified paramaters given by RHT (min price, max shares). They cant sell shares they dont own and you cant borrow shares in RHT hence the need for the collateral shares. Acuity is actually selling these shares on behalf on RHT. RHT then issues these sold shares back to acuity after the evaluation period is over, giving acuity 20m shares capital again. This process can be repeated. At the end of the ATM RHT buys back and cancels these 20m shares as stated above 'the company may elect to buy-back the collateral shares and cancel those shares for no consideration to Acuity.
Why 20m collateral shares? That equates to $2-3m. Remember acuity has to hedge that entire amount during the evaluation period. Ie it sells, essentially on RHTs behalf the shares and then gets reissued the shares afterwards (see steps 5-7). Evaluation periods are chose by RHT when they believe there is volume to absorb it. If you want the collateral shares to be only 2m shares well then at 15c a share u can only raise 300k at a time which is hardly worth it.
ATM typically have lower fees because as you can see Acuity is hedged in the transaction. This is unlike normal placements where the underwriter/investor takes ownership of the stock and has to guess the market post raising. To take on this risk they demand a greater discount.
ATM raises are growing in popularity. I suggest people either call the company to understand how it actually works or take the time to research it. But the notion that they are giving away 4% of the company is misinformed.
RHT Price at posting:
12.0¢ Sentiment: Buy Disclosure: Not Held
