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KALiNA Power (ASX:KPO) – hereafter referred to as Kalina – has been hit with a please explain from ASX Compliance after it posted negative quarterly cashflows in its latest earnings update.
Answering the question directly, “What is KPO’s current unaudited cash balance?,” the company revealed to Compliance that the company has $211,773.
That’s probably not enough money for a company ultimately trying, in part, to make the nefarious (and not yet once scaled up) technology of carbon capture work.
Then again, the company had an answer for that.
“Given that KDP’s portfolio of power projects incorporating carbon capture and sequestration is still in the project development stage, the Company believes that it is normal to expect negative operating cash flows in the future quarterly reports until KDP has constructed its first project and it is fully operating,” the company wrote in response to Compliance on Tuesday.
Naturally, Kalina also wants to power data centres while still sequestering carbon, because why not.
But Compliance is concerned, regardless, Kalina is going to run out of money.
A company can’t just sit on the ASX deciding what it has to do – more than once, junior miners have been forced to buy projects simply to continue existing after it becomes clear another project is a duster.
In that same way, Kalina needs to show it can keep making money. The stock has a solution for its current malaise: A $1.5M placement announced Tuesday.
Except, by the way, Kalina has also been looking for buyers of its project sites – including carbon capture projects.
“As at the date of this letter, KDP has been in direct discussions with potential buyers regarding a Potential Site Sale. In addition, KDP is also negotiating engagement terms with professional advisors to represent KDP in Potential Site Sales of the Saddle Hills site and one or more of its Power-CCS sites.”
Hopefully the people who partook in Tuesday’s share placement realise that.
KPO last traded at 0.7cps.
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