LONDON (Alliance News) - MySQUAR Ltd on Friday said it is in talks to sell its subsidiaries and has temporarily shut down its Mobile Money division and MyMingalarbar social app in order to conserve funds.
A creditor has indicated that it may provide a working capital facility, and has completed its due diligence. However, MySQUAR is still awaiting a funding offer.
"There can be no certainty an offer of funding will be forthcoming so there remains a material uncertainty regarding the company's working capital position," MySQUAR said.
The firm is also in talks to sell its subsidiaries to an undisclosed NEX quoted company. The consideration for these subsidiaries has not been disclosed, but MySQUAR did say it would include shares in the acquiring company which would be distributed to shareholders.
In November, the entertainment and payments platform said it was urgently seeking funding after GBP900,000 worth of its bond issue proceeds were paid out without authorisation.
MySQUAR's non-executive directors have reviewed the account into which the missing bond proceeds were paid and provided their update on Friday.
According to the directors, a GBP200,000 loan was provided to MySQUAR back in February by a company that may have been a substantial shareholder. The loan was then repaid in March using bond proceeds.
MySQUAR said that, in the view of its directors, the loan may have constituted a related party transaction under AIM rules and this MySQUAR should have issued a notification regarding the loan.
Moreover, MySQUAR would also have been obliged to consult with its nominated advisor on the loan and not do so. The firm's nominated advisor and joint broker at the time, SP Angel Corporate Finance LLP, has since resigned.
It was further concluded by MySQUAR's directors that, whether or not the loan was a related party transaction, the firm may still have been obliged to disclose it.
This GBP200,000 figure is included within the GBP900,000 of missing funds reported in November.
In addition, two further series of payments have been discovered that should have received approval from the board, including USD13,800 paid to Rising Dragon Singapore Pte Ltd.
While private investor Rising Dragon Singapore is considered a related party by the MySQUAR board, the small size of this payments means it does not qualify as a related party transaction under AIM rules.
Further payments totalling USD188,742 were also made to a MyPay Ltd director between February and April.
"The board is currently considering its options in relation to the above matters," MySQUAR said.
Shares in MySQUAR were suspended in November when SP Angel Corporate Finance resigned. The company has been unable to appoint a new nominated advisor as a replacement and, as such, its shares will cease to be traded on AIM on Monday.
