Having effectively blown up and being outed publicly earlier this week, Powa Technologies, the UK mobile commerce company valued at $2.7bn, had $250,000 available in its bank accounts at the start of February, while a unit of the group owed $16.4m to creditors, according to Companies House.
The position was revealed in filings for Powa Technologies (UK) Limited, one of the group’s two
Powa struggles
subsidiaries. The accounts disclosed the board’s view on February 5 that there was enough “to cover our requirements for the following two weeks” – reports the FT.
The 2014 accounts for the subsidiary included a note regarding the current status of the overall group.
It warned that there was a “a material uncertainty” over short- and long-term financing and “significant doubt” about both the parent’s and the subsidiary’s status as going concerns.
The accounts were published on Wednesday, a day after the Financial Times reported that Powa had missed payments to employees and suppliers in recent months. The company, which has received more than $175m in funding, largely from US-based Wellington Management, said at the time that it was negotiating new funding, adding that the “outlook for our business remains positive”.
Wellington Management declined to comment.
On Thursday, a spokesperson for Powa said the company would make an announcement imminently that would “clarify the funding situation”. Further details were not provided at the time of publication.
According to the filing, Powa was in “advanced” negotiations to secure Goldman Sachs and RBC as advisers. Both banks declined to comment.
The accounts said that six “potential investors” were carrying out “detailed due diligence” on the company.
Shareholders gave $40m to the group last year, according to the filing. New investors described as “high net worth individuals and family offices with a background of investing in technology start-ups” injected a further $10m. Founder and chief executive Dan Wagner and another director also “provided funds”, although the amount was not specified. Bright Station Ventures, described on its website as Mr Wagner’s “personal vehicle”, contributed a further $1.35m.
In November, Wellington made a loan to Powa Technologies that required a bank account and the company’s intellectual and physical property to be put up as security, according to a Companies House filing made at the time. The size of the loan was not disclosed.
Powa Technologies was founded in 2007 with a focus on mobile payments. Since then it has released PowaTag, an app that enables people to buy products by photographing products with their mobile phones.
In a video to staff late last year, Mr Wagner said the company was “basically pre-revenue”, referring to a paucity of sales. He added that although revenue would start to flow “in meaningful ways . . . right now it isn’t”.
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