Message from Vironova AB´s Chairman of the Board of Directors
Dear Shareholder In advance of the Annual General Meeting scheduled for 14th of March 2023, I am writing to you to provide some context for the meeting and the current situation.
As many of you know, the global market context has brought some major challenges driven by external shocks, which has filtered through into the real economy through higher interest rates, lower rates of investment in our sector, lower valuations levels.
Vironova has had some significant successes over this period, including winning some new clients, deepening its relationships with existing clients as well as developing exciting new capabilities within its core technologies which is resulting in new revenue and IP/patent opportunities. There are also some significant business partnerships being explored at present which could accelerate our growth and recognise the unique technology and capabilities we have.
Many of you will also be aware that we had to take the difficult decision to restructure the business and reduce headcount which we did proactively during Q3/Q4 2022. This, in conjunction with a small equity raise enabled us to reach cash breakeven during the fourth quarter of 2022. This is a significant milestone for Vironova and one of which I am thankful to the team.
However, the challenges are not all behind us. The company has some historic loans from various shareholders which are due and we have yet been unable to renegotiate the terms of those loans. The creditors are currently pursuing legal action to recover their funds. We are of course taking legal advice on the likely outcomes from the creditors legal action. This of course ranges from liquidation of the company through to a court-agreed repayment plan which takes into account the need to keep the company commercially viable.
As a board we are exploring all options available to us to deliver the best outcome for all shareholders and the company, in line with our legal duty. At this stage, we are pursuing all the options available to us, including:
- Continuing our negotiations with creditors and defending Vironova’s position in the courts in relation to the creditors actions
- Raising new debt and/or equity from existing and/or new investors
- Strategic partnerships and alliances
- A sale of the business or assets
I am grateful for the support and confidence you have shown in Vironova over the years and I hope that we will overcome our current challenges and deliver a return on your investment in the future.