I think these comments are especially pertinent with respect to a much awaited SP turnaround. "... when we bring our Patrol Mission (KSF2) satellites into operational phase in the coming months." Sounds better than in 2023. & "With our data collection, signal processing platform and intelligence delivery validated through these initial months, we expect to see an increase in contracts, cash receipts and revenues into future periods."
The impact of this €0.9 million and the above comment infer that any future CRs will hopefully be at a much better SP. In the wildest scenario the cash flows ramps up so substantially that future CRs may even not be neccessary. Please see the comments below from the Full Year report.
In the context of the February CR, €0.9 million is a very significant initial figure - "Kleos Space S.A announced that due to circumstances outside the Company's control, the previously announced placement has been reduced to A$2.4m, with funds totalling A$1,562,800 received to date and the balance to be received by 28 February 2023, due to delays in international funds transfers. The Company has been advised by the Lead Manager that the shortfall of A$600,000 is the result of certain parties not being able to complete their commitments." They seem to using roughly a €:AU$ of 1:1.5 - meaning we are talking ~AU$1.35 million, or a bit over half of the February CR. I think there is a race on to ramp up the cask flow ASAP to avoid further debt &/or CRs. At least that would be what I would be thinking. Also, iron out all the bugs in the sats before the next launch is initiated. Obviously ISISpace are also in a tight learning curve re problem solving in space.
From the full year accounts "In addition, the Company raised capital during February 2023 with net proceeds of €1.4 million over two tranches. Of that amount, €1.0 million from tranche one has been received, and the remaining €0.4 million from tranche two is expected to settle by 28 February 2023. The Company aims to further raise at least €4.2 million combined in two follow on tranches. Success with these future capital raises will be largely impacted by the successful transitioning of KSF1 into operations and the Company’s ability to bring the remaining satellites into use. In order to close the second €2.8 million tranche (out of the €4.2 million referred to above), Kleos will also need to obtain shareholder approval to issue shares in a private placement. Kleos plans to have their AGM in late March/ early April to obtain this approval in sufficient time to raise capital needed. Kleos has been successful in raising funds when needed in the past and believes that past performance is an indicator of potential for future success. During this most recent capital raise, Kleos was not able to prove the satellites were operational as it did not reach the operational service date for KSF1 until after the capital raise was complete, making it more challenging to optimise the capital raise. This should not be the case with a future raise as KSF1 is now operational. The LOCATE service is successfully downloading data today and this data is being provided to both current and potential future customers. Until the Company can raise additional funds to meet the cashflow requirements of the Group, uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern."
"The Company is required to maintain a cash balance in excess of €1.25 million in accordance with the PURE loan covenants (note 22). The Company has violated this covenant as of the end of January. The ramification of this violation is that Kleos needs to cure with a capital raise, which happened in February 2023."
KSS Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
