Sondrel Holdings PLC on Friday confirmed that discussions with a potential provider of capital are now ‘at a very advanced stage’ regarding a proposed £900,000 convertible loan note.

The Reading, England-based semiconductor design services firm said the secured 15% note would help meet its immediate working capital requirements and support it through to a positive trading cash flow position at the end of 2024.

If agreed between the parties, Sondrel said the note would be mandatorily convertible into new company shares at a price of 10 pence on completion of a wider fundraise by Sondrel aiming to raise around £6 million.

Shares in Sondrel were up 11% to 10.80p each in London on Friday late morning.

The note provider is expected to invest in further equity in the fundraise. Sondrel intends for the fundraise to be completed before the end of this month.

Whilst the note is expected to be secured imminently, Sondrel cautioned that it remains subject to agreement between the parties. Sondrel note that it will not be able to meet its February 2024 payroll in full prior to receipt of the CLN proceeds.

Further announcements will be made in ‘due course’ and ‘as appropriate’, Sondrel said.

On Tuesday, Sondrel won a new design and supply contract for a next generation video processing chip with a total estimated value of $23 million across the design, qualification and projected production life of the product.

‘The complex chip is to be used for high performance professional video streaming solutions. The company has entered into the master agreement with the customer and design work has commenced whilst the parties finalise negotiations to the exhibits to the agreement,’ it said.

The initial contract value is for over $9 million for the duration of the design and qualification phases and the work will be fully funded by the customer.

Sondrel also reported that it received four new orders in 2024 year to date for its design consulting services, engaging with two existing customers and two new customers. These contracts will generate a combined revenue of $900,000 in the current financial year.

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