Suspended social media player MySQUAR (LSE:MYSQ) shocked investors today with the news that around £900,000 has left the business without approval. The Myanmar-focused firm said the money appears to have been paid to either third parties or former directors without being signed off by either its board or remuneration committee.
MySQUAR made the discovery after carrying out a preliminary investigation into how the proceeds of two convertible bond issues totalling £4.33m were used. This was launched following the news earlier this month that shares in the company would be suspended from trading on AIM pending the clarification of its financial position. At the time, the firm said its cash balances were very low, adding that it had failed to draw down on a $1m facility from a provider called Rising Dragon Singapore.
In today’s update, MySQUAR said it has made a number of staff redundant to conserve cash. It added that, although its operations have continued, its ongoing viability depends upon ‘urgent’ external funding to meet working capital requirements. The business describes itself as a social media, entertainment, and payments platform whose principal activity is to design, develop, and commercialise Myanmar-focused internet-based mobile applications.
While a creditor has indicated that it is prepared to provide it with cash in principal, MySQUAR said there is no guarantee that this will take place. ‘As a consequence, there remains a material uncertainty regarding the company’s working capital position and trading in the company’s shares will remain suspended pending clarification of the company’s financial condition,’ it added.
In a separate announcement, MySQUAR said its nominated adviser and joint broker SP Angel Corporate Finance has resigned with immediate effect. If it cannot appoint a replacement Nomad within the next month, then the admission of its shares to AIM will be cancelled.