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Velocys PLC on Thursday voiced concerns over its ability to continue as a going concern after it launched a fundraise and reported widened annual loss. The sustainable fuels technology company aims to raise at least £32 million by a placing, retail offer, open offer, a conditional issuance of convertible loan notes to Carbon Direct Capital and potential further issuances of convertible loan notes and/or new ordinary shares to investors other than Carbon Direct Capital. An accelerated bookbuild process for the placing is expected to raise a minimum of £6 million with the retail offer and open offer up to £500,000 and £2.0 million, respectively. But Velocys said at present it does not have firm commitments from any additional investors to subscribe for the convertible loan notes and has set a deadline of September 30 for completing this part of the fundraise. The funds will be used to provide working capital and to enable continued work on the reference projects to the point of reaching key decisions. If the convertible loan notes are issued, the company will move forward with its plans to scale up the organisation. But in the event that the convertible loan notes are not issued, further funding will be required, in addition to the £8 million announced today, to be able to continue as a going concern for at least twelve months. ‘These conditions indicate the existence of a material uncertainty that may cast significant doubt on the company and Velocys PLC’s ability to continue as a going concern,’ it said. In the year to December 31, Velocys reported revenue of just £200,000, down from £8.3 million and said it expects annual revenue to remain uneven in the short-term due to the growing but concentrated number of projects in development whilst the market becomes more established. Its pretax loss widened to £14.0 million from £9.5million the year prior. Shares in Velocys closed 0.6% lower to 3.40 pence each in London on Thursday. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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