Today's Quarterly shows 1.5 quarters of funding available based on the expenditure over the previous quarter. This typically requires a company to advise the market how they plan to meet the required capital requirements. In this case they have not specified exactly how this will be done.
Fear not though.
Understanding the Situation
If a company listed on the ASX has less than 2 quarters of funding and hasn’t specified how it will raise funds, it faces a risk of trading suspension. However, it can potentially continue trading by convincing the ASX that money will be forthcoming, provided it follows specific steps.
How to Convince the ASX
The company must disclose its funding shortfall in its quarterly cash flow reports, as required by ASX rules. It needs to outline steps it’s taking to raise capital, such as a planned equity placement or securing investor commitments. Engaging directly with the ASX to discuss these plans and provide evidence, like signed agreements or significant contracts, can help demonstrate credibility. The ASX will assess whether the company’s financial condition remains adequate for continued trading under Listing Rule 12.2.
Risks and Outcomes
If the ASX is satisfied with the company’s plans, trading can continue. But if the plans are deemed insufficient or the financial condition worsens, the ASX may suspend trading until the funding issue is resolved. This process ensures transparency and protects investors, but it’s complex and depends on the specifics of each case.
For whatever reason it appears the ASX is happy that NUZ can continue trading. So maybe the ASX is privileged to still confidential information?
Cheers
(20min delay)