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Two investors have promised to partially plug Powerhouse’s cash hole, prompting the Kiwi investor to cancel a $5.8 million capital raise.

Powerhouse (ASX:PVL) says two unnamed institutional investors will give it $1.35 million — including 400,000 now and another $950,000 later in convertible notes after shareholders have given their OK.

It says this means it can avoid paying “significant” entitlement offer fees.

The entitlement offer was supposed to fund “existing and new startup ventures in Australia and New Zealand” as well as provide working capital.

It was also supposed to pay for operational expenses that last quarter were expected to top out at $1.4 million.

Powerhouse is depending on other institutional shareholders to fill any upcoming funding gaps also via convertible notes.

It says another $500,000 convertible note on the same terms — a conversion rate of 20c and interest of 12 per cent a year — might be available.

The investor has not issued updated quarterly accounts yet but at the end of December it had just $1.6 million left.

In February, Powerhouse said total asset sales since Paul Viney took on the CEO role in August last year yielded $3 million.

Powerhouse sold shares into the Croplogic IPO and saw a private sale of Arcactive for $1.7 million in November.

But that figure appears to also include the almost $1 million sale of its Syft stake.

Syft was sold in May, before Mr Viney became CEO.

Struggle town

Powerhouse has faced challenges over the last 12 months.

In January, it wrote off a 30 per cent investment in Solarbright to nothing and is now embroiled in a legal action against the founders for allegedly transferring IP out of the company.

In August it wrote off a $7 million investment in HydroWorks, and then reported a $10 million annual loss.

In September, Croplogics, one of its investments, listed on the ASX at 20c and promptly dropped 23 per cent. The stock is now trading at 5.4c.

In November, a buyer who offered $1.3 million for Powerhouse’s stake in Invert Robotics pulled out, saying they would instead invest in a capital raise.

The company has however secured a non-binding offer for the IP of mobile marketing company Motim Technologies.

That deal is subject to Motim completing due diligence on the bidder, CrossTech’s, proposed corporate structure.