Woes at Audioboom deepened today after it revealed it had missed its own deadline to secure vital external funding.
The podcast provider – whose investors include property tycoon Nick Candy and his wife, actress and singer Holly Valance – said that it had not managed to secure a strategic equity investment of $8m from an unnamed Chinese investor.
Although the investment was originally slated to complete by the end of September, the company said that negotiations have not stopped and remain "active".
Shares in the Aim-quoted company have bobbled in recent weeks after Candy stumped up £2.6m of his own cash to fund a share placing in mid-August. It was hoped that Candy's investment would arrest the downward charge on the stock that has seen 40 per cent of Audioboom's value wiped out since the start of 2016.
Today, shares opened down nearly 10 per cent this morning. This was followed by further trade during the day at 2p per share, 20 per cent lower than yesterday's 2.5p close. Shares have subsequently calmed and Audioboom's stock price is broadly back where it started.
Financial statements filed earlier this year revealed that Audioboom had burnt through over £5m of cash during the year, leaving the company with less than a £1m in the bank.
The interest from a Chinese investment house was announced in early August in the hope of bolstering the balance sheet and had a backstop date of the end of September. Terms at the time indicated that the investment would not be lower than 2.5p per share.
"The company wishes to advise that whilst a formal agreement with the Chinese fund has not yet been reached in the timeframe originally envisaged, discussions remain active," Audioboom said in a statement to the market.