REG - Capai PLC - Execution of Heads of Terms and Launch of capMedia

capAIAnnouncement

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RNS Number : 9994P  Capai PLC  07 July 2025

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
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MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

7 July 2025

 

capAI plc

("capAI" or the "Company")

 

Execution of Heads of Terms for Author42

and Launch of capMedia Division

 

capAI (LSE: CPAI) is pleased to announce that it has entered into non-binding
heads of terms with R42 Group LLC ("R42") for the exclusive licensing of
Author42, an AI publishing platform designed to transform how authors and
content creators produce high-quality, market-ready content. The proposed
transaction supports the strategic buildout of capMedia, an AI-powered content
division aligned with the Company's multi-segment AI operating model.

 

Author42 and capMedia Launch Overview

 

Author42 is a next-generation generative AI platform combining narrative
tools, character development, plot structuring, and market intelligence. It
enables scalable, data-informed content creation across fiction and
non-fiction formats, supporting the needs of modern authors, publishers, and
independent creators.

 

The Author42 platform will be available in Beta shortly, with a broader
commercial release anticipated as the platform matures. It targets disruption
in the £116 billion (US $151 billion) global publishing industry, which is
projected to grow to £147 billion (US $192 billion) by 2030, addressing
growing demand for AI-assisted content creation tools. 1 

        Strategic Rationale

 

The Author42 platform aligns closely with capAI's strategy to build focused,
scalable and capital-efficient AI ventures in sectors undergoing technological
disruption.

 

Market Opportunity and Disruption Potential

 

capMedia represents one of several anticipated business units under capAI's AI
operating model. This operating strategy deploys ultra-lean, high-impact "tiny
teams" to build and scale AI ventures across targeted sectors with minimal
capital requirements and accelerated time-to-market.

 

capAI believes traditional publishing and content development workflows are
ripe for disruption. By leveraging its capital-efficient model and R42's
proven technology pipeline, the Company aims to significantly reduce
development costs and accelerate entry into high-growth markets with strong
scalability potential.

 

The global publishing and content creation sector is undergoing rapid
transformation, driven by:

 

·      The rise of generative AI in authoring and publishing workflows.

 

·      A surge in independent creator-driven content and self-publishing.

 

·      Growing demand for personalised, data-informed storytelling tools.

 

capMedia addresses these trends with a scalable Author42 platform designed to
enable faster, more commercially viable content creation.

 

This opportunity is underpinned by a multi-tiered growth trajectory across the
broader publishing ecosystem:

 

·          Traditional publishing remains a resilient market, estimated
at £116 billion (US $151 billion) in 2024, growing to £147 billion
(US $192 billion) by 2030, at a CAGR of 4.2%.1

 

·      Digital publishing is accelerating, forecast to expand from
US $97 billion in 2024 to US $248 billion by 2034 (CAGR: 9.8%). 2 

 

·      The AI in publishing market, where Author42 is directly positioned,
is expected to grow from US $3.6 billion in 2024 to US $41.2 billion by
2033, reflecting a CAGR exceeding 30%. 3   4 

 

·      These sectoral trends form part of the broader entertainment and
media ecosystem, projected to reach US $3.4 trillion by 2028, per PwC. 5 

 

Taken together, these dynamics validate capAI's strategic positioning at the
convergence of AI, publishing, and scalable digital innovation.

 

Proposed Transaction Structure and Conditions

The proposed transaction is subject to regulatory clearance. Upon receiving
such clearance, the Company and R42 intend to execute a definitive licence and
option agreement pursuant to the previously announced strategic alliance
between the two parties.

 

The terms of the proposed transaction include, inter alia:

 

·      capAI will be granted an exclusive worldwide licence for a 12-month
period to operate the Author42 platform, with no upfront licence fee payable.

 

·      capAI will retain full commercial and operational control and will
be entitled to 100% of revenue generated under the licence.

 

·      During the licence period, capAI shall commercially advance
Author42 in good faith.

 

·      capAI will hold a discretionary option to acquire the underlying
Author42 intellectual property. If exercised by capAI, capAI will issue £2
million in new ordinary shares to R42, with the number of shares calculated
based on a volume-weighted average price (VWAP) over a defined pricing period
prior to exercise.

 

·      To preserve regulatory flexibility, should the issuance of such
shares exceed applicable thresholds or require prior shareholder approval,
capAI and R42 may agree to settle part or all of the consideration in the form
of unsecured convertible loan notes carrying a 10% non-compounding interest
rate on equivalent terms.

 

·      As further consideration, to the extent the option is exercised by
capAI, R42 will also be entitled to 20% of any net proceeds from a future
monetisation, sale, or liquidity event attributable to the Author42 platform.

 

This structure provides capAI with commercial flexibility during development
while preserving long-term economic alignment with R42.

 

Governance and Related Party Considerations

 

The heads of terms have been entered into within the framework of the
strategic alliance between capAI and R42. Professor Ronjon Nag, Executive
Director of capAI and Founder of R42, has recused himself from all
negotiations and approvals relating to the proposed transaction from capAI's
perspective. The Board has implemented appropriate governance protocols,
including independent review of the terms.

 

Management Commentary

 

Richard Edwards, Executive Chairman of capAI, commented:

"This proposed transaction marks a significant step in our commercialisation
strategy. Author42 is a timely and powerful platform addressing a major global
market opportunity, and capMedia gives us a focused division to scale it. The
structure reflects our commitment to disciplined capital allocation while
maximising long-term value for capAI shareholders."

 

Professor Ronjon Nag, Executive Director of capAI, added:

"Author42 is a compelling example of how AI can support and amplify creativity
at scale. It embodies the purpose of our strategic alliance; to deliver
transformative technologies through an efficient, scalable model. I'm excited
about the impact Author42 can have and even more excited about what comes
next."

 

Strategic Outlook

Author42 is expected to anchor the capMedia division, with additional
platforms within this division planned across the publishing, media, and
creative technology sectors. capAI's operating model is purpose-built to
support the development and scaling of multiple AI-enabled businesses. The
Company anticipates establishing further divisional structures beyond
capMedia, each focused on distinct verticals where AI offers strong disruption
potential and commercial scalability.

 

Next Steps

 

The Company will provide further updates as regulatory clearance is obtained
and the definitive licensing and option agreement is executed. Additional
announcements on capMedia's progress and future verticals will follow in due
course.

 

For the purposes of UK MAR, the person responsible for arranging release of
this Announcement on behalf of capAI is Richard Edwards, Executive Chairman.

 

Enquiries

 

Company:

capAI plc hello@capaiplc.com

 

Broker Enquiries:

Peterhouse Capital Limited Tel: +44 (0) 207 469 0930

 

Important legal Information

 

The information contained in this Announcement is for background purposes only
and does not purport to be full or complete, nor does this Announcement
constitute or form part of any invitation or inducement to engage in
investment activity. No reliance may be placed by any person for any purpose
on the information contained in this Announcement or its accuracy, fairness or
completeness. The contents of this Announcement are not to be construed as
legal, financial or tax advice.

 

This Announcement does not constitute or form part of any offer or invitation
to sell or issue, or any solicitation of any offer to purchase or subscribe
for, any securities, nor shall it (or any part of it), or the fact of its
distribution, form the basis of, or be relied on in connection with, any
contract therefor.

 

This Announcement may include forward-looking statements, which are based on
current expectations and projections about future events, including about
capAI's operations, strategy, financial performance, development milestones,
and the future prospects of its business divisions, including capMedia and the
Author42 platform. These statements may include, without limitation, any
statements preceded by, followed by or including words such as "target",
"believe", "expect", "aim", "intend", "may", "anticipate", "estimate", "plan",
"project", "will", "can have", "likely", "should", "would", "could" and any
other words and terms of similar meaning or the negative thereof.

 

Forward-looking statements are based on current expectations and are subject
to various risks and uncertainties that could cause actual outcomes to differ
materially. These risks include, but are not limited to: successful execution
of definitive agreements; regulatory approvals; development timelines; market
acceptance; technological shifts; and broader economic conditions. No
representation or warranty is made or will be made that any forward-looking
statement will come to pass, and no assurance can be given that any
forward-looking statement will prove accurate. Except as required by law,
capAI undertakes no obligation to revise or update any forward-looking
statement. The forward-looking statements in this Announcement speak only as
at the date of this Announcement.

 

 

 

 

 

 

 1  Grand View Research, Books Market Size, Share & Trends Analysis
Report, 2024-2030
https://www.grandviewresearch.com/industry-analysis/books-market
(https://www.grandviewresearch.com/industry-analysis/books-market)

 2  Market.us, Global Digital Publishing Market Size Report, 2024-2034
https://market.us/report/digital-publishing-market
(https://market.us/report/digital-publishing-market)

 3  Navistrat Analytics, AI in Publishing Market - Overview and Key Insights,
2024-2033
https://navistratanalytics.com/report_store/ai-in-publishing-market
(https://navistratanalytics.com/report_store/ai-in-publishing-market)

 4  Market.us, AI in Publishing Market Size, 2023-2033
https://market.us/report/ai-in-publishing-market
(https://market.us/report/ai-in-publishing-market)

 5  PwC, Global Entertainment & Media Outlook 2023-2027
https://www.pwc.com/gx/en/industries/tmt/media/outlook.html
(https://www.pwc.com/gx/en/industries/tmt/media/outlook.html)

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