Proton Power Systems (AIM: PPS) fell for the second day in a row after warning investors it required £2 million in funding to keep it afloat for another 12 months.
Proton is proposing a £2 million equity placing at 10 pence per share, more than a 50% discount to before the update was released. The company said it had partially underwritten the placing with existing and new shareholders who have agreed to take £0.96 million. The underwriters will also be entitled to 3 warrants for each share they subscribe to, with an exercise price of 10p. However, Proton also warned that if it only managed to raise £1 million, it would need additional funding in September.
The grim update was further accompanied by confirmation that a £2 million lending facility with General Capital Group, which Proton has drawn down £1 million to date, may no longer be available. Proton said that General Capital had provided assurances that it would not seek repayment of the £1 million trance borrowed, but equally Proton said it believed General Capital would not provide any further capital.