The Deepverge PLC (LON: DVRG) share price plunged 28.8% after announcing plans to downsize its Labskin, Skin Trust Club and Rinocloud business units as part of drastic measures to manage its financial position. The company also said that it was exploring the potential sale of some of its business units.
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The life sciences company added that there could be a delay in publishing its annual results due by 30 June 2023 unless an audit of its accounts is completed on time. The firm attributed the delay to the resignation of its previous audit firm, which abruptly exited the UK market in March.
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Investors were unhappy to learn that Deepverge was in dire financial straits and was actively considering raising additional cash via an equity or debt issue and trade finance. However, news that one of its subsidiaries had won a £2.3 million four-year contract could not save its share price.
The decision to downsize the Labskin, Skin Trust Club and associated elements under the Rhinocloud business will see the company dismiss about twenty permanent employees and contract positions. The company will also not support the business’s progression.
Deepverge attributed the delay in filing its annual results to the sudden departure of its previous auditor Jeffreys Henry LLP, on 24 March 2023, just when the audit of its accounts was about to begin. The company has appointed Haysmacintyre LLP as its new auditor but warned that the audit of its accounts might not be done by the FCA’s 30 June 2023.
If the audit is incomplete by the FCA’s June deadline, Deepverge shares will be suspended from trading on the LSE’s AIM segment until the annual report is filed. Therefore, there is an imminent suspension risk for Deepverge shares.
On a positive note, Deepverge announced that its subsidiary, Glanaco Ltd., has won a new contract to supply customised environmental cleaning and monitoring equipment to an undisclosed customer within the EU.
The deal will be implemented over four years and worth £2.3 million. Glanaco will lease its equipment to the customer for four years.
*This is not investment advice.
Deepverge share price.
The Deepverge share price fell 28.76% to trade at 0.374p, from Friday’s closing price of 0.525p.
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