Business
Corporate Update
Corporate Update.
About this update from Cap-xx Limited
[{"type":"text","content":"\n\n \nDissemination of a Regulatory Announcement that contains inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.\n \n13 March 2024\nCAP-XX Limited\n(\"CAP-XX\" or the \"Company\")\nCorporate update\n \nCAP-XX, a world leader in the design and manufacture of supercapacitors and energy management systems, provides the following update in relation to its working capital position.\nOn 1 February 2024, CAP-XX announced its interim results for the six months ended 31 December 2023 (\"Interim Results\"). In the Interim Results announcement, it was stated that the Company had cash reserves as at 31 December 2023 of A$0.3m and an unused line of credit of approximately A$1.5m. In that announcement, the Company's Chairman also stated that the legal costs and unexpected expenses in relation to the departure of the former CEO and investment in new product developments had resulted in the Company's adjusted EBITDA remaining negative and the Company's cash position being tight and that the Board was managing the Company's cashflows carefully.\nDespite these efforts, the Company's working capital position has continued to deteriorate. This is due to a combination of (i) higher than anticipated legal costs associated with the Company's patent infringement litigation; and (ii) revenue and cash receipts for the first eight weeks of the current calendar year being lower than expected, despite the encouraging order book. In addition, the revolving line of credit associated with the Company's R&D facility is fully drawn down to the extent that expenditure has currently been incurred.\nAs a result of this, the Board has been exploring raising additional financing. The Board has considered debt and sale/leaseback structures but has established that these are not available to the Group. The Board has also been exploring raising additional equity financing and these efforts continue. However, this process is taking longer than anticipated and, whilst the Board has continued to manage CAP-XX's working capital, the Group is now in a highly constrained financial position as highlighted above and requires additional financing by the end of this month.\nThere is no guarantee that an equity financing will be achievable and, in the ab...