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Taverham: I would, too. If enough people make enough noise, something may be done, in this company and in AIM generally. They did say that they had enough cash to last only until the end of June though, didn't they? I suppose investors thought they were addressing the issue and the company’s management thought they’d given the shareholders fair warning. I do think that shareholders should have been told why share placings were not being considered. Better a large element of dilution than the appointment of Administrators. It still doesn’t make sense to me. Surely their brokers and NoMad would have advised them that an issue could be got away?
Oofy , I tend to agree about the FCA but I will still lodge a formal complaint. In addition all investors have a claim imv against the Bod for failure to disclose in a timely manner . Specifically what is missing from the 1April RNS in the section on going concern are the words ‘ April fool’ the company is not a going concern because we have already breached the covenants and OF want their cash back !.
I think the Oxford loan was there as a bridge pending a capital raise, also acting as a sign to potential investors in a placing that 4D might have other financing options.
That would explain the condition of needing a capital raise by the 1st April to be able to access the rest of the amount loaned in the 1st tranch.
Then the biotech bubble burst and placing options dried up.
They obviously were looking to avoid dilution and thought they would get to a place where they could raise at a higher price.
With hindsight they missed a trick not raising more when they listed on Nasdaq. They thought they could live hand to mouth with funding rather than doing a big raise to give them enough for 2-3 years.
Scrambler we all hope you are right. What confuses me is why take a loan with OF if it had all these restrictions ? Could it have been they were the only option in the world left to raise money?
I suppose it boils down to does anyone think our science / platform is valuable to them. Then its just a question of how valuable. Alex always seemed confident with the science but we shall see.
Hopefully be out of Administration in a few weeks.
Sang, good points about the general risks with the sector and Aim , however, would this situation have arisen if the company had followed the rules on disclosing material matters ?
It really does pose the need for questions to be asked about the suitability of such stocks for the average investor.
There is no independent evaluation of such stocks. The only broker notes 4D have had in recent years were from in house brokers plus Ladenberg Thalmann who have shall we say a a bit of a reputation.
Investors rely on management ramping and puff pieces and soft interviews from the likes of Proactive.
The low volumes mean the stocks are ripe for manipulation by pump and dump outfits and short sellers.
Mainstream funds avoid them as they don't understand the science and yet plumbers and retired factory workers are assumed to be capable of doing so.
Also being listed on Aim they have reduced disclosure requirements compared to the main index.
There's also a high rate of failure in the sector.
I don't think I was smart getting out when I did. I think I was very lucky. If it hadn't been for another poster highlighting the restrictive loan covenant I would have likely overlooked it.
If the price had not been getting manipulated down with the auto trades I would also have been caught out.
PI's experience here and those looking at the bio-tech sector, is going to make fund raising extremely difficult from small investors. The risks can be overwhelming as some are seeing here.