HaloSource Inc. (HAL.LN, HALO.LN), the global clean water technology company traded on London Stock Exchange’s AIM market, is pleased to confirm that the Company has conditionally raised approximately £1.9 million ($2.3 million) through the issue of an aggregate of 125,377,866 new Common Shares to new and existing investors at a price of 1.5 pence per new Common Share (the “Placing Price”).
Highlights of the Fundraise
- The Company has raised approximately £1.9 million ($2.3 million) through a conditional placing (the “Placing”) of 73,173,333 new Common Shares (the “Placing Shares”) and a conditional subscription (the “Subscription”, together with the Placing, the “Fundraise”) for 52,204,533 new Common Shares (the “Subscription Shares”, together with the Placing Shares, the “New Common Shares”), in each case at the Placing Price.
- The net proceeds of the Fundraise will provide additional working capital to the Company and also be used to fund commercialisation of the Company’s lead removal technology and expansion of its drinking water business.
- The New Common Shares will represent approximately 36% of the enlarged issued common share capital of the Company.
- The Fundraise is conditional upon, amongst other things, one of the cornerstone investors to the Fundraise receiving certain Chinese governmental approvals to enable the investor to complete its participation in the Subscription, and the necessary shareholder resolutions being passed at a general meeting of the Company to be held on 17 May 2017. Shareholders are directed below to further details of the conditions of the Fundraise.
- Liberum Capital Limited (“Liberum”) is acting as nominated adviser in connection with the Fundraise. Hybridan LLP (“Hybridan”) is acting as sole broker in connection with the Fundraise.
Reasons for the Fundraise and Use of Proceeds
On 6 April 2017, the Company announced its preliminary results for the year ended 31 December 2016 which confirmed total cash at year end, including short-term investments, of $2.1 million, which is expected to fund the Company until the end of Q2 2017.
Since 2016 the Company has taken proactive steps in order to reduce its cash burn rate. However, the Fundraise is necessary to provide additional working capital so that the Company can continue to trade as a going concern beyond Q2 2017. Assuming completion of the Fundraise, including receipt of the Chinese governmental approval for the cornerstone investor referred to above, the Company expects to have sufficient cash to fund it through to Q2 2018.
In addition, the Company also reported that during 2016 it had made solid progress on the development and scale-up of its new lead removal technology, which would enable the Company to offer a powerful combination of heavy-metal removal along with viral and bacterial disinfection already provided by its HaloPure® technology. Accordingly, a portion of the net proceeds of the Fundraise will also be used to fund commercialisation of the Company’s lead removal technology and expand its drinking water business.
Assuming the Fundraise completes, the Company expects that for the year ended 31 December 2017 revenue from continuing operations will be between $4 million and $5 million, operating expenses will be between $5.5 million and $6 million and the net loss will be between $3.5 million and $4.5 million.
The appendix to this announcement (the “Announcement”), which forms part of the Announcement, sets out further important details of the Fundraise and the action to be taken by shareholders to allow the Fundraise to occur.
The information communicated in this Announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 (“MAR”). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Craig Crowell, Chief Financial Officer.
Read the full notice here