Quebec City-based LeddarTech has warned that its investors could lose “all or a substantial part” of their investments in the firm if it is not able to reach a deal with lenders or raise additional financing within days.

The autonomous-driving technology company warned that it may face trouble continuing as a going concern if it does not present a plan to its lenders by Friday and raise US$9.7 million by May 23.

“At this time, we are not expecting to be able to complete the equity financing or to produce a plan that would be acceptable to all our lenders,” the company said in its second-quarter earnings report. “Desjardins has expressed an unwillingness to provide additional financing to the company, but has expressed a willingness to work toward a solution.” 

Shares fell about 15 per cent on Wednesday. 

LeddarTech, which was founded in 2007, is backed in part by public money and has a deep portfolio of Canadian-made intellectual property. Its debt crisis comes as others in the self-driving vehicle industry say they are on the verge of mainstream adoption. Tesla and Waymo plan to expand their robotaxi services this year, while Waabi and Aurora have made leaps toward commercialization. 

LeddarTech, which just launched a new product for advanced-driver assistance and autonomous driving, said it has more than 30 deals under discussion with automakers and major auto suppliers, including a one that would generate revenue later this year.  

One of LeddarTech’s selling points is the way its software fuses data from different vehicle sensors, streamlining the amount of information needed to operate the artificial intelligence models used by self-driving vehicles. LeddarTech also designed its products to be used with many different types of sensors and vehicles. 

That technology caught the eye of investors, despite the company admitting in 2020 it was “burning cash” to stay competitive in the auto sector. LeddarTech raised a US$140 million Series D round in 2022 with participation from Investissement Québec, BDC Capital, Export Development Canada, Fonds de solidarité FTQ as well as private-sector backers like FS Investors, which said it did “extensive due diligence” on the company.

It went public with a US$348 million valuation on the Nasdaq in December 2023 through special-purpose acquisition company Prospector Capital, led by former Qualcomm executive Derek Aberle. 

Its stock has struggled ever since. In early April it slipped below the market value needed to remain listed on the Nasdaq, despite receiving a bridge loan from Investissement Québec and Fédération des caisses Desjardins du Québec in August 2024. 

A LeddarTech spokesperson didn’t respond to a request for comment. BDC and Quebec Economy Minister Christine Fréchette’s office didn’t immediately respond to a request for comment. 

BDC confirmed it is a LeddarTech investor but declined to address questions about its stake. Export Development Canada spokesperson Anil Handa said that it has cut its stake “materially” since its initial investment in 2021, which at that time was worth between $5 million and $15 million and is “hopeful for a positive outcome.”

In an earnings call on Wednesday, CEO Frantz Saintellemy said that the company “has made remarkable progress in business development” and was in a position to “sustain commercial success.” 

“We are excited about the future. We are confident that we are well-positioned,” Saintellemy said.

With files from Martin Patriquin in Montreal.

This story has been updated with responses from BDC and EDC.