Workers at Wilton's Applied Graphene Materials are being consulted about possible redundancy, as bosses at the firm explore funding options.
The innovator in the application of graphene told the London Stock Exchange that an equity raise was not possible amid efforts to find funding as it faces the prospect of running out of money by the end of January. It blamed what it called "unfavourable conditions in small-cap equity markets".
Loss-making Applied Graphene said it was embarking on a strategic review having appointed management consultants Alvarez & Marsal Europe LLP to assess whether it could raise funds via a specialist debt provider or strategic investor. It also said the possibility of a sale was on the table.
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In an update to the market, the firm said: "In parallel with the options described above, to seek to protect the financial position of the company in the event the strategic review does not achieve a satisfactory conclusion, the board has regrettably decided to commence statutory redundancy consultations with the company's employees."
In April, Applied Graphene reported increased operating losses of £1.9m although overall revenue increased from £42,000 to £46,000. Covid had slowed down its key market as customers' focus shifted away from research and development and supply chain issues had also caused a "severe impact".
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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