Imaginatik Plc (LON:IMTK) saw its share plunge on Tuesday after the innovation solutions provider revealed it had terminated plans to sell itself and that its chief executive and chairman were both leaving the company.
In late afternoon trading, the AIM-listed firm’s shares were down 43% at 0.62p, just easing off the session low of 0.51p, by far the biggest faller on the London market.
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In a statement, Imaginatix said its directors held detailed discussions with several interested parties but based on the proposals put forward by potential purchasers, its board decided “that it would be unable to make a positive recommendation" to shareholders.
The group added: “As a result, the Board today confirms that it has closed the formal sale process and terminated all discussions with interested parties.”
Imaginatik put itself up for sale at the start of February as it said it did not believe its share price reflected either the value of its platform or of the company's growth prospects.
The firm also said its chief executive Ralph Welborn has left with immediate effect, and will not receive any compensation, and its chairman Matt Cooper has resigned, also with immediate effect, and has waived his entitlement to receive payment in place of notice.
The company said it will announce new appointments to its board "in due course".
New funding
The group revealed as well that it has secured new funding to pursue a new strategy and, as part of the funding, it has agreed to reduce costs by more than £750,000 on an annualised basis.
Imaginatik noted that the company retains a roster of 38 customers, currently worth annualised revenues of approximately £2.8mln.
It raised £225,000 in a fundraise by Peterhouse Capital which involved a combination of its outgoing chairman subscribing to a new convertible loan note from Imaginatik while also selling £225,000 in existing shares to new investors.
As a result, Cooper now has a 3.5% stake in the company.
The notes are interest-free and unsecured and are convertible at 0.5p per share. Imaginatik is planning for a shareholder vote to reduce the par value of the company to allow a conversion of the notes.
The company said it has appointed Peterhouse Capital as its joint broker.