(Alliance News) - Itsarm PLC shares plunged on Wednesday, after it announced plans to place itself in liquidation and cancel its shares from trading on London's AIM.
The stock fell by 26% to 0.35 pence each in London on Wednesday around midday. Over the past 12-months the shares are down 99.6%.
Itsarm has been a cash shell since March. At the time, it sold its only operating subsidiary In The Style Fashion Ltd for GBP1.2 million. In the Style was a Manchester-based digital fashion brand and was sold to Baaj Capital, a UK-based private family office.
While the net proceeds from the sale were about GBP500,000, Itsarm now has no income but continues to incur operating expenses which include the costs of having to remain an AIM-quoted company, it said. Itsarm described these costs as "significant."
On Tuesday, the company had cash of GBP516,000, with current contractual liabilities of GBP231,000. It also has ongoing costs including directors' fees, insurance costs, AIM listing fees, registrar fees, professional and other advisers' fees and website hosting costs.
Itsarm noted that the current monthly spend is about GBP40,000, before any one-off expenses including advisory costs relating to the future of the company.
Based on this, Itsarm said that the likelihood of it being able to continue for a period longer than three months before becoming insolvent is "low."
It therefore has decided to put forward a formal proposal to shareholders for a members' voluntary liquidation of the company.
"The board is of the view that the MVL represents the best and most cost-effective option to protect and realise any shareholder value, given that the company's operating subsidiary has been sold and the company no longer has any trading business or income of any sort," it explained.
It also said that it plans to cancel the company's shares from trading on London's AIM market, in order to preserve cash and maximised distributions made through its liquidation.
Itsarm will hold its general meeting on May 12. It is expected that the cancellation will take place on May 26.
By Sophie Rose, Alliance News reporter
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