HeiQ PLC (LSE:HEIQ) shares plummeted 44% to a new all-time low around 5p after warning that it needs to raise funds due to a challenging market background and it is reviewing strategic options, including possibly sales or carve-outs of subsidiary businesses to strengthen its balance sheet.
The textiles and materials innovator said total revenues are expected to be around US$62 million for the 18-month period to 30 June 2024, the company said in a statement, compared to US$47 for the previous 12-month period.
"Whilst the board considers additional cost reduction measures to further stabilize operations and allow the group to continue operating on a going concern basis, the historically low share price restricts the group's ability to raise additional equity financing at group level to finance its high-value ventures."
Since floating in late 2020, shares in the Switzerland-headquartered company rose to above £2 in early 2021, fell below £1 in 2022 and fell from 33p at the start of last year to hover around 10p for most of this year.
The company acknowledged that, apart from its Life Sciences unit, it does not expect a short-term improvement in market conditions for its established commercial businesses.
"Further access to funding is key to enable the group to achieve its growth plans, as it intends to scale multiple, high-potential ventures in parallel over the coming years and capture the value creation for shareholders," HeiQ said.
"During these continuing challenging market conditions, the board does not believe that it is possible to sufficiently fund investment into its ventures exclusively from cash generated from its currently curtailed commercial activities."
It announced in July a process to raise cash for its AeoniQ subsidiary level to fund investment a plant in Portugal.
Audited results and accounts for the 18-month will be published by the end of October it said.