On a day that Asterand CFO, John Stchur followed the lead of former CEO Martyn Coombs and stepped down, the company's interim results said that a combination of poor trading and repayment of the debt used to acquire BioSeek will result in a breach of banking covenants.
In words that sent a chill through investors and precipitated a huge sell off of stock, taking the share price down by over 54 per cent, Asterand's interim statement said there was: "a material uncertainty that casts significant doubt upon the Group's ability to continue as a going concern."
BioSeek, the provider of human disease models purchased by Asterand at the beginning of 2010 for a valuation that is now at $9.5m, has single-handed grown revenues for the group which actually saw revenues climb 36 per cent to $11.9m (H1 2010: $8.7m) in H1 2011.
However, its acquisition has also led Asterand to take on $9.3m in debt. Meanwhile, the rest of the business - the human tissue based solutions - has been flat, bringing expectations down below previous forecasts.
Chairman and interim-CEO, Jack Davis says demand for these products and services remains high, however meeting these needs has been challenging, resulting in a retraction in the non-BioSeek revenues, including the anticipated revenues under the $24.3m NCI contract.
Davis, said that following discussions with potential investors there was a reasonable expectation that sufficient funds will be raised within an appropriate time-frame to continue operating as a going concern and provide enough working capital headroom to fund improved tissue sourcing strategies, however, there is no guarantee of shareholder approval for a deal.
The board is also reviewing its listing on the premium section of the London Stock Exchange, the costs of which may now be too high.blog comments powered by Disqus