Applied Graphene Materials responded to speculation it was planning a seriously discounted placing on Tuesday, claiming it was not planning an equity raise at the moment.
Tipster and former fund manager Tom Winnifrith claimed on his ShareProphets website on Monday evening that, according to a “City source”, the company was planning a placing at an 80% discount to the bid price.
Winnifrith wrote that the firm had been discussing plans to raise £3m with its broker since last week, but described the details as “horrific”, noting that its shares were down 97.8% from their peak.
On Tuesday, Applied Graphene said in an announcement that it had previously outlined plans to raise further equity, in order to fund its operations and its continued development.
“The company has spent recent weeks investigating the feasibility of an equity raise with institutional and other investors, and this process is now complete,” the board said.
“Having regard to the unfavourable conditions in small-cap equity markets, the board has concluded that it will not be possible at the current time to complete an equity raise.
“Whilst the board is pleased with the start that the company has made to its new financial year, the company requires additional funding to extend its cash runway beyond 31 January, which as previously disclosed is the date on which the board expects that the company’s current financial resources will be fully depleted.”
Applied Graphene said it would provide further updates as appropriate.
At 1256 GMT, shares in Applied Graphene Materials were down 43.55% at 6.21p.
Reporting by Josh White for Sharecast.com.
