Adalan Ventures H1 2025: Smaller Loss, Big Funding Questions
Adalan Ventures has posted its unaudited interim results for the six months to 30 June 2025. The headline is simple: the loss narrowed thanks to tight cost control, but the balance sheet is deeply negative and the company’s future hinges on fresh funding and the lifting of its trading suspension.
These numbers are unaudited and the interim statements have not been reviewed by the auditor. The company also flags a going concern warning, which I will unpack below.
Key numbers investors should know
| Metric | H1 2025 | H1 2024 / FY 2024 comparator |
|---|---|---|
| Net loss | £127,702 | £208,175 (H1 2024) |
| Staff costs | £90,825 | £114,464 (H1 2024) |
| Operating expenses | £36,877 | £93,711 (H1 2024) |
| Cash at period end | £2,597 | £1,823 (31 Dec 2024) |
| Total liabilities | £1,101,766 | £973,290 (31 Dec 2024) |
| Net assets | £(1,099,169) | £(971,467) (31 Dec 2024) |
| Advanced subscriptions | £103,956 | £83,956 (31 Dec 2024) |
| Accruals | £840,147 | £746,466 (31 Dec 2024) |
| Convertible loan note (CLN) | £12,000 | n/a |
Cost control is working – the loss narrowed materially
Adalan’s half-year loss fell to £127,702 from £208,175, an improvement of £80,473 or about 38.7%. The drivers are clear: staff costs dropped to £90,825 and operating expenses were cut to £36,877. On a small base, those cuts matter.
This shows management has trimmed cash burn while the company searches for a reverse takeover candidate. In plain English, they are keeping the lights on without splashing out. That is the positive here.
Balance sheet reality: negative equity and heavy creditors
Set against the smaller loss is a balance sheet with just £2,597 of cash and total liabilities of £1,101,766. Net assets are negative at £(1,099,169). The biggest line is accruals at £840,147, plus trade payables of £104,208 and other payables of £11,475. There is a £29,980 loan and a £12,000 CLN.
The company also reports £103,956 of advanced subscriptions for shares at the period end. These are funds received in anticipation of new shares being issued at 4p once trading resumes and the necessary approvals and prospectus are in place. That helps liquidity in the short term, but remember it sits on the liabilities side until shares are actually issued.
Cash flow: tiny burn, tiny cash
Net cash used in operations was £31,226 in the half, partly offset by £32,000 of financing inflows – £20,000 of advanced subscriptions and a £12,000 CLN. The net change in cash was a modest £774, taking the period-end balance to £2,597.
On these numbers, the operating burn rate is low, which is good. But with only a few thousand pounds in the bank at 30 June, headroom is razor thin. The subsequent financing point below is therefore critical.
Going concern warning: what it means for holders
The directors state plainly that Adalan requires additional funding to pursue its plan to find and acquire an operating business via a reverse takeover. They believe current cash plus funds they seek to raise would be sufficient for the foreseeable future. However, if they cannot raise capital, there is a significant risk to the company’s ability to continue as a going concern. The company has reduced cash expenditure to a minimum.
Translation: this is a funding-dependent situation. Progress on capital raising and on the reverse takeover will make or break the investment case.
Funding path: advanced subscriptions, CLN and suspension
Post period end, Adalan received further advanced subscriptions for shares totalling £200,000. The shares are expected to be issued following the lifting of the suspension of trading on the London Stock Exchange and the publication of a prospectus.
At the period end, advanced subscriptions are referenced at a 4p per share expectation. Issuance requires trading to restart and shareholder authorities to allot, with the RNS noting an FCA-determined annual authority threshold moving from 19.99% to 75% on 19 January 2025. None of this removes dilution risk – new equity, when issued, will spread ownership across more shares.
My take: improving P&L, but survival rests on reinstatement and fresh capital
Positives first. The company has brought costs down sharply and narrowed its loss. Operationally, they are doing the right things for a cash-constrained shell pursuing an RTO.
Now the hard part. Cash was £2,597 at 30 June and net liabilities stood at £1.10 million. Even allowing for the £200,000 of subsequent advanced subscriptions, the balance sheet remains stretched and negative. Reinstatement of trading and a prospectus are prerequisites to convert those advances into equity and to raise more – timing is not disclosed.
Why it matters for shareholders
- Execution risk: The plan hinges on lifting the suspension and completing a reverse takeover. Neither has a timetable in this RNS.
- Dilution: Funding is coming via equity. The 4p reference on advanced subscriptions is indicative, but pricing on future raises is not disclosed.
- Creditor overhang: Accruals of £840,147 and payables of £104,208 will need to be managed, settled or restructured.
- Optionality: A successful RTO can be transformative, bringing an operating business into the listed shell. That is the upside scenario.
What I will watch next
- Prospectus publication and the lifting of the trading suspension.
- Conversion of advanced subscriptions into issued shares and any update on pricing and quantum.
- Further funding – equity raises or extensions to the CLN – and the resultant dilution.
- Details of any target for a reverse takeover, including sector, terms and timeline.
- Cash discipline continuing, given the minimal cash balance at period end.
Bottom line: a tighter ship that still needs a harbour
Adalan has materially reduced its loss and kept its operating cash burn low. That is encouraging. But the company remains balance-sheet negative with minimal cash, and it openly warns of going concern risk if funding falls short.
The £200,000 of subsequent advanced subscriptions is a helpful bridge, yet the key catalysts are still ahead: prospectus, reinstatement, funding, and an RTO. Until those land, this remains a high-risk, high-variance situation where news flow will drive the outcome.
