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Surface Transforms – “pleased to announce” result of open offer excess. Hmmm…

By Steve Moore | Thursday 10 August 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

With its shares having been above 20p at the start of 2017 and still above 19p in June as it attempted to mitigate “we continue to look forward with confidence”, Surface Transforms (SCE) has announced the final result of a fundraising which it has emphasised has seen a “most encouraging response from shareholders”. At what price per share again?

This is at 15.5p - also a slight discount to the price post the June trading warning and prior to the 6th July fundraising announcement. Perhaps not so “encouraging” then?

This is also with the placing component for £3 million and open offer £0.5 million. There were initial open offer applications for 157.84%, seeing it stated that “the board anticipates using its additional authorities to satisfy the excess open offer demand of 1,865,810 ordinary shares”. It is now though “pleased to announce… 1,144,675 new ordinary shares… will be admitted to trading”. Hmmm.

Commissioned research from Hardman & Co has forecast year-end net cash, even after a net £3.3 million raised, of sub £2 million – and then burn to below £1 million the following year, before profit then kicks in.

However, as previously noted, I’ll wait for some delivery - rather than just statements of jam tomorrow “increasingly confident” - before reconsidering my stance here. I continue to avoid.

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