Future funding issues and technical test challenges facing micro combined heat and power (mCHP) boiler designer Inspirit Energy (INSP:AIM) means retail investors should steer clear for now.

The company raised £1 million at 1.4p in a share placing 26 June, a rough 10% discount to the-then prevailing 1.55p share price. Encouragingly, chief executive officer John Gunn invested £50,000 of his own cash. The shares are  presently trading at 1.58p.

SmallCaps Inspirit

This is only enough cash to pay for sample unit manufacturing and installation for trials with potential customers. With just £58,000 of net cash reported in half-year results to December 2015 and six months cash burn of £550,000, the company will need to tap investors again in 2015. The company is so cash-strapped that it has even resorted to paying its advisors in shares, issuing 3.34 million on 18 September.

Inspirit has undoubtedly made progress this year, signing a sample unit manufacturing agreement with Malvern Boilers (27 Jan) and securing trials with residential care provider Caring Homes, an unnamed European utility group and, most recently, with Calor Gas (18 Sep).

Issue Date: 25 Sep 2014