Supply@ME Capital Faces Funding Uncertainty Amid TAG Restructuring
Why we think this is bad
The RNS announcement raises significant concerns about Supply@ME Capital's funding situation and ability to continue as a going concern. The lack of payments from the company's key funding partner, TAG, the outstanding amounts due, and the need to explore alternative funding options suggest the company is facing serious financial difficulties. Additionally, the fact that TAG has elected to apply for a restructuring procedure under Italian law further clouds the outlook for the company's future funding. While the board believes the company can be managed to meet its ongoing commitments, the material uncertainties highlighted in the going concern statement are a major red flag.
Key Points
- No payments received from key funding partner TAG, with £2,041,630 outstanding
- Late payment interest of £334,000 charged, with £277,000 remaining outstanding
- TAG has elected to apply for a restructuring procedure under Italian law, raising doubts about its ability to fulfill funding commitments
- Material uncertainties regarding the company's ability to continue as a going concern
Summary
Supply@ME Capital plc, the fintech business which provides an inventory monetization platform, has provided an update on its current funding position, particularly in relation to the ongoing financing by The AvantGarde Group S.p.A. (TAG). The announcement reveals that no payments have been received from TAG in respect of the amounts drawn down under a shareholder loan agreement, with the full £2,041,630 remaining due. Additionally, late payment interest of £334,000 has been charged, of which £277,000 remained outstanding.
The board has continued to closely monitor the payments received from TAG and the ongoing representations made by TAG regarding the expected timing of the continued future receipts of the amounts due. However, TAG has elected to apply for a restructuring procedure under Italian company law due to certain material creditor positions, which may impact its ability to fulfill its funding commitments to Supply@ME Capital.
While the board believes the company can be managed to meet its ongoing commitments, the material uncertainties highlighted in the going concern statement in the H1 2024 interim financial statements are a major concern.