Why is the Novonix share price stuck on standby today?

The Novonix Ltd (ASX: NVX) share price is on ice this morning as the company prepares to release news of a “material funding arrangement”.

It comes just weeks after its auditor expressed concerns of the company’s ability to finance its ongoing growth.

For now, the Novonix share price will remain frozen where it closed Tuesday’s session – $2.13. That marked its highest close in more than a month.

Let’s take a closer look at what might be going on with the S&P/ASX 200 Index (ASX: XJO) tech stock on Wednesday.

Why is the Novonix share price frozen?

The Novonix share price has been put into the freezer on Wednesday. The battery technology and materials company is expected to end its halt with details of a material funding arrangement.

Many investors will no doubt be glad of the hint. The company posted a $71 million loss and $40 million of cash outflows for financial year 2022. It closed the year with $207 million of cash and equivalents.

Commenting in its annual report, the company’s auditors PricewaterhouseCoopers said:

[Novonix] remains dependent upon raising additional funding to finance its ongoing expansionary activities.

These conditions… indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.

Today’s trading halt might remind watchful investors of a similar freeze requested by the company in August last year.

That halt broke with news of Phillips 66 (NYSE: PSX)’s US$150 million investment in the company.

Back to the present, the Novonix share price will remain frozen until the company releases news or the market opens on Friday, whichever comes soonest.

The stock rocketed nearly 19% on Tuesday despite the company’s silence. Its New York listing – Novonix ADS (NASDAQ: NVX) – also soared 20.4% overnight to close at US$5.61.

The post Why is the Novonix share price stuck on standby today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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