LONDON (Alliance News) - Auctus Growth PLC delivered two pieces of bad news to investors on Monday as it said it has pulled out of the proposed acquisition of a social media platform because it would "not be in the best interests" of its shareholders and reported a wider pretax loss in the first half of 2015.
The investment company, which was founded in May last year and floated on the Main Market of the London Stock Exchange in August 2014, was set to complete a reverse takeover of an unnamed social media platform following an announcement in April.
However, on Monday, Auctus said it had withdrawn from negotiations as it does not believe the deal is right for its shareholders, leaving it continuing to search for its first investment.
The proposed deal led to the company's shares being suspended, and Auctus said the suspension will be lifted once a market notification has been provided by the UK Listing Authority.
The deal was originally announced at the same time as its financial report for the period from May 14 to December 31, 2014, when it posted a pretax loss of GBP39,650.
On Monday, Auctus said it made a GBP100,253 pretax loss in the period from January 1 to June 30, 2015. At the end of the period, the company had liquid cash balances of just over GBP1.0 million.
"The board will provide further updates to shareholders in due course in regard to the future plans for the company," said Chairman Malcolm Burne.
Following the collapse of the deal, Auctus said the board and founders of the company have agreed to subscribe to up to 244,000 new shares at 50.0 pence per share to raise GBP122,000. Those proceeds will "support the future acquisition plan" and "mitigate the abortive costs incurred in relation to the proposed acquisition" that has fallen through.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.