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DeepMatter Group PLC said on Thursday it proposes a cancellation of its shares from AIM, while also raising funds in a share issue via subscription among principal shareholders.
Shares in DeepMatter were up 15% to 0.04 pence in London on Thursday afternoon in response to the announcement.
The Glasgow, Scotland-based digital chemistry data company said it will issue 2.50 billion new shares in subscription at a price of 0.04 pence for its principal shareholders to raise funds of up to £1.0 million.
It said the cancellations of shares from AIM was in the best interest of the company and is supported by its principal shareholders. Following the subscription, it added it expects a ‘more substantial’ capital raise as a private limited company in 2023, to fund its long-term growth plans.
DeepMatter said its directors believe it would not have been possible to raise sufficient capital in public markets to progress growth plans, while they were also wary of current market sentiment.
DeepMatter said it still expects financial 2023 revenue of no less than £1.5 million, while it has cash reserves of £700,000.
It explained the planned revenue rise as coming from a recently signed licensing agreement with Germany’s Merck KGaA on October 26, which it said could become one of its largest deals so far.
Back in August, the firm reported its interim results. In the first hallf of the year, revenue was £678,000, up 4.5% from £649,000 a year earlier, while it posted a pretax loss of £1.9 million, widened from £1.5 million.
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