Capital update – negotiations ongoing for early release of second milestone payment
COMPANY ANNOUNCEMENT NO. 104
Inside information
LED iBond had expected to win two larger sales projects in Q3 2024 within indoor farming, but unfortunately, LED iBond did not win these projects. The value of these projects amounts to approximately DKK 5 million, resulting in a revised outlook for 2024.
Revised Outlook
LED iBond now expects 2024 revenue of DKK 7 – 8 million, a reduction from the previous DKK 10 – 12 million as stated in Company Announcement no. 95, 26 March 2024.
As a result of revised growth expectations and related working capital impact, LED iBond is working on a plan to still ensure positive cash flow from operations being realized by the end of 2025.
As such, the revised financial outlook is:
- Revenue of DKK 7 – 8 million for 2024
- Positive cash flow from operations by the end of 2025
Tight liquidity
As stated in Company Announcement no. 81, 29 November 2023, LED iBond reached agreements for DKK 10 million in new funding. The first step was completed in December 2023 by issuance of 12,857,141 new shares, raising DKK 4.5 million. The second step was to raise the remaining DKK 5.5 million through issuance of two tranches of convertible loans, contingent on two sequential milestone deliveries in, respectively, April 2024 and November 2024. LED iBond has secured the first milestone payment, leading to a payout of DKK 2.75 million as announced in Company Announcement no. 100, 22. April 2024.
The second milestone payment of DKK 2.75 million is due in November 2024 contingent on certain performance milestones being met.
With the present outlook the Company is running short on liquidity, and it will not be possible to meet the conditions for the release of the second milestone payment in November. Consequently, the Company is in negotiations with the investors who have committed to the original terms of the milestone payments to achieve an earlier release.
The company has ensured liquidity for the next short-term period – however not enough for the next 3 months, which is dependent upon an early release of the second milestone payment.
In this context, the company is presently working on taking additional actions to support the negotiations for an early release of the second milestone payment. At present, it is not clear whether this will be sufficient support.
Furthermore, the management and Board of Directors are currently assessing relevant opportunities to raise capital to support the business going forward, expected during Q4 2024.