Trellus Health PLC (AIM:TRLS) fell 26% after it issued just over 59 million new shares following the conversion of £50,000 of secured convertible loan notes.
The conversion results in new equity being issued at 0.085p, a steep discount that illustrates the dilutive mechanics of convertible loan note financing at distressed valuations.
The announcement sent shares down more than a quarter to 0.12p, reflecting investor concern over the ongoing dilution as successive tranches of the loan notes are converted into equity.
Trellus operates the Trellus Elevate platform, a digital health service combining data analytics with personalised resilience programmes aimed at patients with complex chronic conditions such as inflammatory bowel disease.
The company has struggled to gain commercial traction since its AIM flotation, and the convertible loan structure has become a persistent source of share capital expansion at progressively lower prices.
Trellus shares have fallen 93% over the past year, leaving the company valued at approximately £440,000, placing it firmly in micro-cap territory and raising questions about its ability to fund operations beyond the current financing arrangement.