Update and Strategic Considerations for Resqunit Shareholders
STOCKHOLM, 23. januar 2024, 11:20 CET – Resqunit AB (Nasdaq First North GM: RESQ): As we navigate the complexities of the market, we want to provide a status update on Resqunit AB (publ). This document contains a brief status update on sales and markets, the Company’s critical cash liquidity situation stretching until end of February, and an application to delist the Company’s shares from Nasdaq First North Growth Market
Since its public listing, Resqunit AB (the Company) has developed and set up mass scale production on a much-needed product to mitigate negative fallouts from the fishing industry; ghost fishing, plastic pollution, and expensive gear loss being main factors. Production, initially located in China, was in 2023 strategically moved to Portugal, adding reduced cost, proximity to key markets, and lower geopolitical risk. The technology so far indicates a reduction in gear loss for its intended market of 90%, contributing to enormous societal savings in future cleanup activities.
The Company sees a rapid maturing of this market. More sustainably aware seafood consumers, reallocation of governments spending towards preventive measures such as those provided by the Company, and more regulatory intervention to mitigate the critic conditions of marine ecosystems. However, the Company’s progress is affected by a still somewhat immature market. Introducing an innovative and disruptive product to a traditional industry poses market penetration challenges, exceeding our initial expectations. The disruptive nature of our business adds complexity, making it challenging to create reliable budgets and roadmaps during this market penetration phase.
In this phase, the Company’s strategy to build sales distribution through key distributors have proven non-effective. Recently shifting sales strategy towards in-house direct-to-consumer and retail sales, has proven more effective and will be a top priority moving forward.
During the time of listing, the share price has dropped 85% and now trades at a material discount to the price when listed. The liquidity of the Company’s share on Nasdaq First North Growth Market Stockholm is very limited, which means that there is limited value both for the Company and its shareholders being listed on a public marketplace. Furthermore, being publicly listed also comes with significant costs for the Company. Costs that under the current trading liquidity, the Company’s financial situation, and share price development conditions, are hard to justify from a shareholder value perspective. The board of Directors has decided, subject to necessary approvals and formalities to initiate a delisting of the Company’s shares from Nasdaq First North Growth Market Stockholm. In accordance with good practice on the Swedish stock market, such an application for delisting will be filed earliest 3 months after the date of this announcement. Alternatively, the Board has tasked the administration to explore strategies that may include, but are not limited to, delisting strategy considerations through takeover, reverse takeover, buy-outs, or mergers/acquisition.
Considering lower-than-expected sales numbers, and an unexpected delay in the delivery of products to the Azores government, as previously announced, we find it necessary to inform the market about our current cash liquidity position. As of this date the company is facing challenges related to critically low cash reserves, only stretching until the end of February. We want to assure our investors, customers, and partners that we are actively addressing this issue with a comprehensive strategy aimed at stabilizing our financial position. Our management team is working diligently to explore various avenues, including cost-cutting measures, negotiations with creditors, and potential capital-raising initiatives. While we recognize the gravity of the situation, we remain confident in our ability to navigate through these challenges and are committed to keeping our stakeholders informed as we make progress in resolving the liquidity concerns. We appreciate the ongoing support of our shareholders and the trust placed in Resqunit AB. Further updates will be provided as significant developments occur.
DISCLOSURE REGULATION
This information is information that Resqunit AB is obliged to make public pursuant to the EU Market Abuse Regulation (MAR) 596/2014. The information in this press release has been published through the agency of the contact persons set out below, on Januar 23th, 2024, at 11.20 CET
