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Defenx shares slump as yearly report delayed
AIM-quoted cyber-security software group Defenx is looking to raise £1.2m by way of the issue of 14.92m new ordinary shares via subscription and an open offer, the group said in a Friday trading statement where the group announced that its full-year results would, again, be delayed.
BV Tech, Defenx's strategic partner and substantial shareholder, has conditionally subscribed for all 10.56m subscription shares at the issue, subject to shareholder approval at its next general meeting on 23 April.
Separately, Defenx's open offer of 4.39m shares at the issue price of 8p, the completion of which was also conditional on, inter alia, shareholder approval, was made available to all qualifying shareholders, with BV Tech conditionally agreeing to acquire any of the open offer shares not subscribed for by qualifying shareholders.
Defenx, which warned investors back in February that revenues would be "materially below those in the prior year" and announced that the group would report a significant loss, including one-off impairment charges, for the full year ended 31 December as a result of delays in the delivery of product updates to address performance issues in the Defenx Group's security products, back-end integration with certain customers' systems and other commitments made by the sales team, saw the cancellation of many confirmed orders, the return of some invoiced sales from the first half of 2017, and customer claims for further returns and compensation.
The company noted that it had received some claims in relation to these issues but did not yet have full clarity on the likely quantum of claims or of how likely these are to succeed against the company.
Due to the uncertainty relating to security segment sales returns and compensation, Defenx said it was "not yet able to report its revenues for the year", but confirmed that it was committed to making them available to shareholders 30 June.
Defenx said it was "actively seeking to resolve customer claims, balancing short-term cash collections with longer-term customer retention and sales opportunities, the collection of trade debtors remains difficult with limited collections since mid-November 2017."
As of 1420 BST, shares had dropped 5.26% to 9.00p.