French start-up Hopium: Heavy losses for hydrogen fuel cells

Hopium, a start-up in receivership, posted substantial losses in the first half of the year, casting doubt on the viability of its hydrogen fuel cells.

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French start-up Hopium, which had announced its intention to market hydrogen fuel cells despite being placed in receivership in July, has announced worrying financial results for the first half of the year. The company recorded a net loss of 24.7 million euros in the first six months of the year. As the company has not yet launched its hydrogen fuel cells on the market, no sales were recorded during this period. The financial situation is characterized by negative shareholders’ equity, amounting to -31.9 million euros at June 30, and virtually zero cash, limited to 88,000 euros.

Hopium’s strategic reorientation towards fuel cells

Despite a reduction in personnel costs thanks to the departure of 35 employees since the beginning of the year, via a collective severance agreement, the company’s situation remains precarious. Hopium, initially aiming to market a hydrogen-powered sedan in 2025, has revised its strategy, refocusing its activities on the development of its fuel cell technology. The company, which still has 85 employees, has thus deferred the research and development expenses incurred in 2022 on the prototype christened “Machina” to the 2023 financial year. This had the effect of increasing earnings by 14.4 million euros.

Challenges and prospects for Hopium

Hopium hopes to initiate discussions with potential industrial and commercial partners in order to define a continuation plan that would guarantee the continuation of its activities. The Commercial Court has given Hopium six months, until January 19, 2024, to raise funds. The company also announced that it had drawn down further tranches of the bond issue with Atlas Special Opportunities. These funds will be used to enable the company to continue its business, focusing on the development of its fuel cell through to the demonstration of a prototype.

However, Hopium’s management has warned that, as Atlas Special Opportunities does not intend to remain a shareholder, the Hopium shares resulting from the conversion of the convertible bonds are likely to be sold on the market in the very short term. This could exert strong downward pressure on the share price, leading to significant dilution of value. Hopium shares, which were worth 0.13 euros on Tuesday evening, are down sharply on their November 1, 2022 level of 15.86 euros, representing a 98.20% drop in one year.

Hopium’s difficult financial situation and the restructuring of its activities raise uncertainties about the start-up’s future in the hydrogen fuel cell sector. Ongoing challenges and the search for industrial partners should determine the company’s ability to pursue its innovations and maintain its viability in the marketplace. The road ahead for Hopium is still strewn with obstacles, but the hope of technological progress remains.

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