OTAQ looks to raise up to £2m in loan capital

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Marine technology business OTAQ is planning to raise between £1.5m and £2m through an issue of convertible loan notes.

The announcement comes alongside the company’s latest trading update, which reports an “encouraging” first quarter for 2024, with revenues up 19% year on year.

OTAQ expects to announce that trading in the year to 31 December 2023 was slightly ahead of management’s expectations with revenues of not less than £4.4m (2022: £4.0m).

The company anticipates that its EBITDA loss will be down to £311,000 (2022: £331k). The latest estimate for the loss is some £66k higher than previous guidance, however, due to “certain non-recurring items”.

OTAQ is proposing to conduct a fundraising by way of a conditional placing of convertible loan notes to raise net proceeds of up to £2.0 million, with a minimum raise of £1.5 million.

The convertible loan notes will be redeemable after three years with a cash coupon of 10 per cent. per annum. The notes will be convertible into OTAQ ordinary shares of one penny each at a price of 3.0 pence per share.

The placing will be subject to approval by shareholders at the next annual general meeting.

Phil Newby, Chief Executive Officer of OTAQ, said: “The board acknowledges with satisfaction the company’s progress, especially the favourable market conditions in the Offshore sector, where OTAQ is strategically positioned to pursue emerging global growth prospects for its OceanSense, Eagle IP, and subsea electrical connector & penetrator solutions.

“Given the anticipated improvement in reported revenue for 2023 and the favourable start to 2024, the Board remains confident in its current growth strategy. The recent commercial launch of LPAS [Live Plankton Analysis System] marks a significant milestone for the Company, one that we are poised to develop throughout the remainder of 2024 and beyond.”

OTAQ’s LPAS, which is designed to detect harmful algal blooms, was launched this week at the Aquaculture UK trade show in Aviemore. The system has completed trials successfully after four years in development.

The company also said its sonar shrimp system developed for Minnowtech LLC, is now gaining traction in its target markets.  OTAQ has also identified further new customer interest in its Sealfence acoustic deterrent device (ADD) solution from salmon farmers in several major salmon production regions, having sold 19 Sealfence units into these core target markets in the first quarter – although regulators in Scotland have still not come to a decision on ADDs.

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