UK greentech firm SulNOx offers a proprietary fuel additive that can be added to fossil fuels to reduce the production of harmful, environmentally damaging emissions – while also offering significant cost savings. Ben Richardson, chief operating officer at the Aquis-listed small cap, talks to IR Magazine about the challenges the firm faces as a pre-revenue company and why some investors can’t invest in a firm offering a transition solution to the climate crisis.
SulNOx is listed on Aquis – why did you choose this exchange and what are the some of the pros and cons of being listed there?
We had promised our shareholders a public quotation within a certain timeframe and we knew that without sales, listing on AIM would be a challenge. Essentially we weren’t ready for AIM.
But Aquis is an exciting new market that we believe in – [founder and CEO] Alasdair Haynes is a visionary and we have a strong relationship with him and his team. The Aquis market is brilliant technologically but the City is still being slow to recognize the advances, which is a shame.
We would love to stay on Aquis and will join the OTC’s New York market soon but, in the UK, institutional investors are seemingly wedded to AIM. We believe this is a mistake but we must be practical, as the vast majority of buyers of our stock are seemingly AIM investors.
The only downside to Aquis is the thin liquidity and therefore exaggerated market movements from relatively small transactions. We hope, however, that the recent announcement that SulNOx shares can now be bought on the Hargreaves Lansdown trading platform will address this.
What are some of the challenges you face being a small-cap company and how do you go about addressing those?
Our biggest issue is that we are still a pre-revenue company, which makes it hard for many types of investors to get involved at this stage of our journey. Because of this, our shares do not trade on fundamentals and, as above, we also have issues around share price volatility due to the lack of liquidity in the market – something Aquis is working hard to rectify by adding new broker platforms and encouraging large investors to look at Aquis stocks.
As a small, listed company, we are bound by all the governance and disclosure requirements, which is a time-sink and distracts from new business generation. I am lucky to have a team that is experienced and capable, having worked in large corporations for many years. Everyone has a very strong work ethic and is excited by SulNOx and our ability to make a difference for the planet.
Brand recognition and awareness [is another challenge]. We have a great brand and a product that the world needs given the high price of oil, the climate emergency and the need for immediate solutions. As a unique product, however, it’s hard to get the story out to a wider audience. That said, we have a great PR team, outsourced with ROUS+, and are now featuring regularly in the main press including a recent article in The Times Raconteur magazine.
Who has primary responsibility for investor relations in the company? Do you ever use an external agency for this?
Investor relations currently sits with the CEO and we do not use an external agency at this time – primarily driven by cost constraints. On our next roadshow in early August, I will present with the CFO and the chief scientific officer given that our product is greentech in nature.
Do you have any covering sell-side analysts? Have you ever considered paid-for research?
We have no covering analysts – only our broker Singer Capital Markets. We have considered commissioned research, but the belief of our brokers is that until we are generating revenue this won’t help.
What is your share register breakdown?
Our largest shareholder is Nistad Gruppen, a Norwegian company with 14.7 percent. We then have seven institutional investors including Singer Capital Markets. Unicorn is the largest institutional investor, holding around 6 percent of the company. The remaining shareholders are retail in nature: six founder shareholder families still have significant holdings.
What are some of the key questions investors ask at the moment and to what degree are they interested in where your company fits into net-zero or net-positive goals?
- When will SulNOx start to generate significant revenues?
- Why is it taking so long for revenues to materialize given the nature of the product and the climate emergency?
- How can I buy SulNOx shares?
- Why are you not on AIM?
Interestingly, some investors are put off by the fact that we reduce the harm of fossil fuels as they are unable to invest in anything to do with fossil fuels. This is a shame given the reality of fossil fuel-reliance and dominance around the world, and mitigation of emissions being the first and highest globally recognized priority to immediately impact climate change. Unfortunately, while many investors do state that ESG is important, it is still very much a secondary consideration to financials.