Amteus says an investor has failed to come up with the £100,000 investment that it committed itself to pay.
In April 2008, the developer of software for the secure transmission of voice and data over the internet announced that it had raised a further £1.8m (£1.5m net) at 15p. The investor agreed to buy £100,000 worth of shares at 15p each. It now turns out that it hasn’t come up with the cash. Amteus has started legal proceedings.
The shares have been trading at below 15p each for nearly all the past five months. The shares fell 3p to 8p on this news. The weak share price may be why the investor is trying to back out of the deal.
Amteus’s deputy chairman Jeffrey Morris, who owns 45.2% of the company, is lending the company £100,000, interest free. He may need to provide more cash to the company.
The cost of developing its educational communications product and a lack of revenues mean that Amteus continues to lose money. If it doesn’t raise more it will get into financial difficulties and the business may have to be sold.
The educational market could be lucrative for Amteus. There are 1,000 schools that could be customers for the secure communications technology. Each individual user will be charged £4.80 per year, which will be shared by Amteus and its distribution partner.
Amteus is valued at £4.3m.
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