Lion Energy Limited - Quarterly Cash Flow Report for June 2024
LIO (LIO) Share Update July 2024 Monday 29th
Lion Energy Reports Quarterly Cash Flow and Financial Update
Lion Energy Limited (ASX: LIO) has released its quarterly cash flow report for the period ending 30 June 2024, detailing its financial activities and cash position.
Instant Summary:
- Net cash used in operating activities: $210,000
- Net cash used in investing activities: $749,000
- Net cash from financing activities: $1,046,000
- Cash and cash equivalents at end of period: $1,168,000
- Convertible note issued with a face value of $1,600,000, maturing on 31 December 2025
Operating Activities
During the current quarter, Lion Energy reported receipts from customers totaling $138,000. However, the company faced various expenses, including $38,000 for development, $86,000 for production, $93,000 for staff costs, and $132,000 for administration and corporate costs. This resulted in a net cash outflow of $210,000 from operating activities.
Investing Activities
Investing activities saw a significant outflow of $749,000, primarily due to payments for property, plant, and equipment amounting to $717,000 and exploration and evaluation costs of $32,000. No proceeds were reported from the disposal of assets or investments.
Financing Activities
On the financing front, Lion Energy successfully raised $1,046,000 through the issuance of convertible debt securities. This influx of capital resulted in a net cash inflow from financing activities of the same amount.
Cash Position
At the beginning of the quarter, Lion Energy had cash and cash equivalents totaling $1,073,000. After accounting for the net cash outflows from operating and investing activities and the inflow from financing activities, the company ended the quarter with $1,168,000 in cash and cash equivalents. Additionally, Lion Energy holds a share of joint venture cash amounting to $147,000.
Convertible Note Details
The company issued a convertible note with a total face value of $1,600,000. The note has an issue price of $1.00 per convertible note, matures on 31 December 2025, and is unsecured. It carries no interest and can be converted at the option of the holders at a conversion price of 2.7 cents per share. Any notes not converted by the maturity date will be redeemed at face value.
The net cash inflow from financing activities is a positive sign for Lion Energy, indicating the company's ability to raise capital. However, the net cash outflows from operating and investing activities highlight ongoing expenses and investments that may impact short-term liquidity. The issuance of the convertible note provides additional financial flexibility but also introduces potential dilution for existing shareholders.
Investor Reaction:
Analysts may view the successful raising of capital through convertible debt as a positive development, reflecting confidence in the company's future prospects. However, the ongoing cash outflows and potential dilution from the convertible note could raise concerns among some investors.
Conclusion:
Investors should closely monitor Lion Energy's financial performance and strategic initiatives in the coming quarters. The company's ability to manage its cash flows and leverage new capital will be crucial in maintaining investor confidence and achieving long-term growth.