Nanosynth Group PLC (AIM:NNN), the company formerly known as Remote Monitored Systems, is to claw back some money spent on a recalcitrant mask manufacturing machine.
The group said terms have been agreed with Lemu Group, the supplier of a mask manufacturing machine to Pharm 2 Farm Limited (the company’s main subsidiary), to return the machine to Lemu.
The agreement is a recognition that despite the best efforts of Pharm 2 Farm (P2F) and Lemu to overcome technical issues with the machine, it has not been possible for the machine to perform as originally expected.
Lemu will repay EUR180,000 to P2F by the end of next month. The remaining EUR66,000 of the EUR246,000 that has been paid to Lemu will be paid contingently upon a re-sale by Lemu of the machine to a third party, with the intention being that this is achieved by the end of this year. Egremont Capital has been appointed to assist with the sale, for which they will receive a commission.
P2F will continue to supply masks to its customers through sub-contracted manufacturing via Volz Filters UK.
“The decision to return the machine to Lemu reflects the difficulties faced by the team in commissioning a new machine for the innovative P2F masks,” said Antony Legge, the executive chairman of Nanosynth.
“In the board’s opinion, the agreement to recover almost 75% of the paid cost of the machine, excluding the EUR66,000 contingent payment, is a fair deal and we are grateful for all the efforts by Lemu in recent months to try and resolve the issues and their collaborative approach to the negotiations to return the machine,” Legge said.
Shares in Nanosynth were down 6.1% at 0.78p in early deals.