WH Ireland sold significant stock around the time of our announcements and with the high demand they became very low on stock with its market makers. WH Ireland wanted to place over £100,000 with its market makers and after a lot of discussion we placed £60,000. It was to satisfy market demand.
What are the benefits for shareholders of this placing? Doesn’t it simply dilute my shareholding?
This placing is a prudent move by Verdes management in order to satisfy market demand and importantly also to ensure that the stability of the business is maintained. This is clearly in the interests of shareholders. Verdes is undercapitalised and in order to maximise the opportunities that we believe are open to developing the business, we feel that this injection of capital was the right strategy to pursue.
Does this mean you have a problem with funding?
Verdes has a healthy cash balance however due to the nature of the business model most fees are gained on success which can be after many months of working on a project. Therefore, due to this time lag Verdes may require more cash in the future for working capital before it is self-sustainable from revenues.
How is Verdes allocating the funds?
As this was not a general placing, and not due to a need for funding, Verdes does not have a specific allocation for the money. It will be used for business overheads.
Will you be doing more placings in the near future? Do you need more access to capital?
Verdes does not have any fixed plans for a placing in the future. However as stated in the CEO’s statement of our annual results, we are looking at different strategies for the business. It may be that one of these strategic choices, if they come to fruition, will require a placing. If that is the case a full report will be sent to shareholders.
When can we expect some more news from Verdes?
Verdes will issue news whenever it is possible to do so. We will provide an update on the existing deals along with news of any new deals as they are finalised.