Windlfow Technology has posted a $7 million loss and says it is running out of cash.
The company has about $400,000 in hand and said the tight cash position underlines the need for an immediate capital raising.
It has managed to stay afloat by selling stock – blades and turbines – to one of its clients, NZ Windfarms. Windflow still has a further $900,000 worth of 16 blades and components for at least one turbine.
“There is substantial uncertainty about Windflow’s ability to remain a going concern,” according to the latest report to investors.
The directors want to raise another $2.4 million from shareholders. This will retain the value of Windflow’s intellectual property and keep the company turning over until it begins receiving final payments in January 2012 from turbines supplied to NZ Windfarms.
The directors said that the funds raised will be used to engage outside specialists to conduct a formal process for licensing the company’s intellectual property internationally for manufacturing Windflow’s designs in North
America and build a market presence in the UK, as well as meeting warranty obligations.
The new shares would represent 30% of the existing shares on issue.
“Before allotting the shares in October the directors will ensure Windflow has (or is likely to have) sufficient cash from the capital raising and/or other new sources to undertake the above course of action and
remain solvent, in terms of both Windflow’s immediate and continuing cash-flow requirements. If not, they will not allot the shares and will return the cash, which is held in trust prior to allotment.”
The company has already reduced staff levels and sub let part of its premises in Christchurch.