MYCELX: profit warning as a $2m project slips, and the CEO lends up to $500k

Down 19% at 47p (£12m)

MYCELX Technologies Corporation (AIM: MYX), a leading provider of proprietary water treatment technology to the Oil and Gas and other industries worldwide, provides an update on trading.

I haven't written about this one since 2025, when I was negative on it due to its Sucker Stock status (and it was dealing with US tariff uncertainty at the time).

Checking its 2025 results, I see that the company made a small profit that year, after its revenues had more than doubled.

H1 2026 was less promising: the company was again loss-making, even at the EBITDA level. Cash dipped to a low of just $0.5m (although the company said it received $1m after H2 had started).

That brings us to today's update, which unfortunately is a profit warning:

As announced most recently in the AGM statement on 17 September 2026, revenue expectations for the current financial year depended on timing of the expected award of a significant project for an overseas customer in the Middle East...

As the purchase order has not been received within the required fabrication window, the Board now expects that the c.a. $2 million of revenue associated with this project will be delivered in FY2027. On this basis, this revenue is expected to increase the total revenue for FY2027 by the same amount.

Estimates:

It happens so often in our work that we see revenue slipping into a future financial period, and yet the future financial period does not get a boost that corresponds to the loss.

I'm pleased to report that in this case, Cavendish have increased their FY27 revenue forecast for Mycelx by $2m. So there is at least an attempt to defend the logic that this is just a delay.

However, FY26 has a second problem: another major customer "has experienced disruption at a high-production offshore site", and this hits FY26's expected revenue for another $1m to $1.5m. There is no corresponding increase to FY27 forecasts.

As a result, Mycelx is now expected to make a £2.2m pre-tax loss in FY26 (previously around breakeven), and then a modest profit of £0.6m in FY27 (previously £1.1m).

The cash position is now expected to be negative at the end of FY26, before recovering in 2027.

Outlook: management are still positive on the long-term opportunity.

Notwithstanding these headwinds, which are expected to impact the current year principally, the Board remains confident in the opportunity available to MYCELX in 2027 and beyond with multiple contracts expected to be awarded for delivery next year.

The pipeline is said to contain 11 "potential projects" worth $20-22m.

CEO loan: this is concerning.

To ensure that momentum is not affected and to provide working capital flexibility, the Company has agreed to enter into a short-term bridge loan of up to $500K from its CEO, Connie Mixon. Under the terms of the agreement, the loan may be drawn down in whole or part at any time during its term of 9 months and it has an interest rate of 10%. The loan is unsecured.

This sort of thing is very common at small companies, but it says to me that the cash position has become uncomfortably low.

Graham's view

This is not a blue-sky Sucker Stock. It has growing revenues, large customers, and has shown that it can generate a profit.

However, I don't think I can switch away from a RED stance at this point. The cash position looked thin to me, even before I read the disclosure that the CEO was going to lend the company up to $500k. And I can't have faith that the 2027 results are going to be as good as hoped, considering what has just gone wrong with the 2026 outlook.

So this is staying RED for now, but I'm very open to upgrading our view at a future date.