Alarum: The Balance Sheet Is Cleaner, but the Equity Overhang Still Weighs
The main article framed Alarum’s 2025 question as AI growth versus cash conversion. This follow-up isolates a different friction: O.R.B. is off the balance sheet, but the cleanup still ran through shares, 9.0 million year-end options and RSUs, extra plan headroom, and an open $100 million shelf.
The Debt Left The Balance Sheet, But Not Without An Equity Cost
The main article argued that Alarum’s real 2025 test is whether AI-led growth can turn into cash. This follow-up does not revisit collections or margins. It isolates a different filter altogether: even after the O.R.B. funding was removed from the balance sheet, shareholders still did not get a truly clean capital structure. Part of the pressure moved from debt into equity.
It is worth starting with the good news. The original O.R.B. structure was an awkward layer: funding tied to a revenue-share model, an obligation to repay each draw within 24 months, and 5,006,386 warrants granted as part of the funding package. The September 2023 amendment changed that picture materially. O.R.B. waived the future revenue share after full repayment, the repayment period was extended to 30 months, and all of the warrants were cancelled for total consideration of $500 thousand, of which $366 thousand was allocated to the warrant cancellation. That was a real cleanup because it removed a more aggressive form of capital overhang than the one that remains today.
But the cleanup was not free. Through October 2025, Alarum had drawn about $2.6 million under the O.R.B. arrangement and repaid about $2.7 million, of which about $1.6 million was in cash and about $1.1 million was in company shares. The debt note shows the same story through the 2025 balance-sheet bridge: the long-term loan started the year at $970 thousand, $93 thousand of interest and principal were paid in cash, $101 thousand of finance expense was recognized, and another $978 thousand was settled through share issuance. By year-end, no balance remained.
That chart is the core of the issue. The balance sheet is indeed cleaner. But it is cleaner in part because almost $1 million of the cleanup passed through equity. On a per-share basis, that is not the same outcome as a full cash repayment.
| O.R.B. cleanup layer | Key figure | Why it matters |
|---|---|---|
| Cumulative funding drawn | About $2.6 million | The facility was not merely theoretical |
| Cumulative repayment | About $2.7 million | The company did close the chapter in full |
| Cash component | About $1.6 million | Part of the cleanup came from cash resources |
| Share component | About $1.1 million | Part of the cleanup was transferred to shareholders |
| Year-end balance | Zero | Funding pressure fell, but not without dilution |
2025 Was Also An Issuance Year Without A Prospectus
To understand why this follow-up is about accessible value, the reader has to look at the share count. At the end of 2024 Alarum had 69.144 million issued and paid shares. By the end of 2025 that number had already risen to 71.758 million. That is an addition of 2.614 million shares, or 3.78% in a single year.
The interesting part is where those shares came from. 1.699 million shares, or about 65% of the 2025 increase, came from exercised options and vested RSUs. Another 914,856 shares, or about 35% of the increase, were issued to O.R.B. as repayment of $978 thousand of the long-term loan. So even without a new public equity raise, 2025 was still a year in which the equity base kept expanding from two directions at once: employee equity compensation and the cleanup of legacy funding through shares.
| Source of 2025 share-count expansion | Shares | Share of the annual increase |
|---|---|---|
| Option exercises and vested RSUs | 1,699,249 | 65% |
| O.R.B. repayment in shares | 914,856 | 35% |
| Total increase in issued and paid shares | 2,614,105 | 100% |
That point is easy to miss. On a surface reading, one can say the debt went away and therefore risk went down. That is only half true. Debt risk did go down, but part of it was converted into a new equity layer, which means the improvement at the company level does not automatically translate into the same improvement per share.
Most Of The Overhang Now Sits In Employee Equity
If O.R.B. is the legacy story, then the remaining overhang is the current one. At year-end 2025, Alarum still had 4,367,803 options outstanding and 4,635,387 RSUs outstanding. Together that is 9,003,190 potential shares, equal to 12.55% of the issued and paid share count at year-end. Of those options, 3,688,224 were already exercisable as of December 31, 2025.
The company itself comes close to stating the issue directly in the risk section. As of March 13, 2026, it had about 72.5 million Ordinary Shares issued and outstanding and about 9.1 million additional Ordinary Shares issuable upon the exercise or vesting of outstanding warrants and employee equity awards, and it explicitly says that the mere existence of that market overhang could pressure the share price. That matters because the framing comes from the company itself, not from an outside interpretation.
There is another layer that belongs in the same frame. In March 2025, the board increased the share reserve under the Global Incentive Plan by another 4 million shares, from 12.449 million to 16.449 million. As of March 14, 2026, 1,755,115 shares were still reserved for future grants under that plan. In other words, the overhang is not only what is already outstanding. There is also disclosed capacity to keep granting more equity.
This is also where the nuance matters. Today’s overhang is clearly better than the 2022 to 2023 version. The O.R.B. warrants are gone, the future revenue-share mechanism was removed, and the debt itself disappeared. But what remains is a cleaner and more institutional overhang, not a small enough one to ignore: employee equity, shares created as awards vest, and headroom for more grants.
The Cost Of Equity Is No Longer A Footnote
At this point the profit and loss statement matters as much as the balance sheet. Share-based compensation expense rose from $933 thousand in 2023 to $2.017 million in 2024 and to $3.445 million in 2025. Within general and administrative expense alone, the company attributes $0.5 million of the year-over-year increase to higher share-based compensation.
That number is a key filter because Alarum ended 2025 with only $0.2 million of operating profit and $963 thousand of net profit. In other words, share-based compensation expense alone was more than 3.5 times the year’s net profit and more than 17 times operating profit. That does not mean every dollar of share-based compensation automatically becomes full dilution. It does mean that equity remains a meaningful payment tool inside the operating model, not just a leftover from the turnaround years.
And that is the precise gap between a company that looks cleaner on a balance-sheet view and a stock that still looks less clean on a shareholder view. At the company level, O.R.B. no longer sits as debt. At the shareholder level, part of the cost has already moved into the share count and into the share count that can still open up.
The Shelf Keeps The Equity Window Open
The final piece of the puzzle is the shelf. In November 2024, Alarum filed an F-3 shelf registration statement that became effective on November 29, 2024 and allows it to offer and sell, from time to time, up to $100 million of ADSs. On that same page, the company also says that at the end of 2025 it had about $22.5 million in cash and high-rated long-term debt investments and that current resources are expected to be sufficient for at least the next 12 months.
That is not a contradiction. It is a capital-structure statement. Management is not saying it must raise capital now. It is saying that even after the O.R.B. cleanup, it still wants to preserve a very wide equity window. So anyone looking for a rerating simply because “the debt is gone” has to add one more filter: is the company actually exiting a mode in which equity is the default pressure valve, or is it merely replacing one funding layer with a fresh layer of optionality.
Conclusion
The balance-sheet improvement at Alarum is real. The O.R.B. funding is closed, the old warrants were cancelled, and the company does not end 2025 with that legacy liability still hanging over it. But this is still not a clean per-share story. The O.R.B. cleanup itself partly ran through share issuance, 2025 created 2.6 million new shares even without a public offering, 9.0 million options and RSUs were still open at year-end, additional grant headroom remains, and the shelf leaves room for new equity if management ever chooses to use it.
That is why this continuation does not contradict the main article. It completes it. Even if AI restores growth and even if the balance sheet looks healthier, the shareholder question is how much of that improvement will actually remain attached to each share. Until Alarum proves that it can fund growth, compensation, and capital allocation without repeatedly widening the equity base, the stock is likely to keep carrying an overhang that the market will struggle to ignore.
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