Alpha Blue Ocean Advisors Inc. ("Alpha Blue Ocean"), an alternative investment firm specialising in providing innovative financial solutions for publicly listed entities, has expressed grave concern about the acquisition by the Norwegian firm Element ASA ("Element") of PALCapital Ventures, Inc. ("PALCapital") an investment company specializing in early-stage investments in the blockchain space. Alpha Blue Ocean is investment manager of the European High Growth Opportunities Securitization Fund ("EHGO"), an entity holding shares in Element.
?The PALCapital acquisition by Element involves the issuance of 2,650,000 new shares in Element. Element is holding an Extraordinary General Meeting ("EGM") on Monday August 19th.
Alpha Blue Ocean has written to Element's management urgently seeking detailed information about the terms of the acquisition of PALCapital by Element, and will raise questions about the acquisition at the EGM on Monday. If satisfactory responses are not received Alpha Blue Ocean will seek a court supervised investigation into Element's acquisition of PALCapital.
Pierre Vannineuse, the founder of Alpha Blue Ocean, said, "The timing and nature of this transaction raises very serious questions about the corporate governance of Element. The transaction was rushed to closing three days before the EGM where we are proposing the replacement of two current Element board members with extremely well-qualified candidates ahead of Element's EGM on August 19th, which raises the question as to whether dilution was a material purpose of the transaction and its timing.
"The issuance of 2,650,000 new shares in Element as part this transaction at such a low price per share has a material impact on valuation. Among other things, we have requested clarity from management on (i) what due diligence was undertaken with respect to PALCapital, (ii) whether an auditor's valuation as required by applicable law was undertaken by Element, (iii) what the future cash needs of the company are and the business rationale behind the acquisition, and (iv) the nature of the personal and professional relationship between the chairman of Element, Thomas Christensen ,and the selling shareholder (and now significant shareholder of Element), James Haft.
"If we do not receive the requested information from Element, we will consider seeking a court supervised investigation into the PALCapital acquisition. We have informed the board of Element about our concerns and we are confident that other shareholders will also express their concerns at the EGM on the 19th.?"
About Alpha Blue Ocean
Alpha Blue Ocean was founded by Pierre Vannineuse and is the investment manager to a family of funds operating across multiple jurisdictions. Alpha Blue Ocean specialises in providing flexible, innovative and non-invasive debt and equity financing to publicly listed companies across the world and in a variety of sectors including healthcare, energy, mining and technology. Alpha Blue Ocean's main representation office is based in London, UK.
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