Teesside innovator Applied Graphene Materials says it has until the end of February until it runs out of money, unless funding from a suitor is found.
The firm says it is mulling a number of proposals from potential buyers that could save it following an inability to equity fund raise - a problem it blamed on "unfavourable conditions in small-cap equity markets". Redundancy consultations for the firm's 30 staff continue having been announced in November when Applied Graphene said it had appointed management consultants Alvarez & Marsal Europe LLP to help it find funding or a buyer.
Now, the firm says it has made additional cost cutting measures that will mean it can stretch its available cash to February 28 having previously signalled it would be depleted by the end of January. It said that any sale was likely to require interim funding before completion.
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In an update to the London Stock Exchange, Applied Graphene said: "The company, in conjunction with Alvarez & Marsal Europe LLP as financial adviser, is continuing its discussions with various parties that have submitted non-binding indicative proposals for either the sale of the group's trade and assets or of the shares in the company's main operating subsidiary.
"The board had initially sought non-binding indicative proposals from interested parties with a view to completing a transaction by January 31, 2023. Completing a transaction on a solvent basis will, in all likelihood, require shareholder approval in a general meeting, as well as other regulatory approvals. Discussions with interested parties are ongoing and the Board is seeking to select a preferred party with whom to enter into legally binding contractual terms by January 31, 2023. The completion of any transaction will only take effect once those shareholder and regulatory approvals have been obtained and this will not take place before January 31, 2023."
In April last year, Applied Graphene reported a widened operating loss of £1.9m. Covid and supply chain issues had impacted its key markets as customers' focus shifted away from research and development. Despite the challenges, at the time it said more potential customers were becoming interest in both graphene as a novel material and its practical use. And further space at its Wilton manufacturing base had been leased and new equipment acquired to accommodate anticipated increased demand.
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