TIDMHAL TIDMHALO
RNS Number : 4899Y
HaloSource Corporation
21 August 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
HaloSource Corporation
("HaloSource" or the "Company")
GBP1.6 million Fundraising, Trading Update, Change of Adviser,
Issue of Warrants and Notice of Annual General Meeting
Highlights
-- GBP1.6 million raised from new and existing shareholders to
continue commercialisation of Company's lead reduction technology
and astrea(TM) brand
-- Successful product crowdfunding campaign completed on Indiegogo platform
-- Initial launch customer for astrea(TM) ONE bottle announced on 18 July 2018
-- Sales of the astrea(TM) ONE bottle to commence in Q3 via e-commerce channel
HaloSource Corporation (HAL.LN, HALO.LN), the global clean water
technology company traded on London Stock Exchange's AIM market, is
pleased to announce a proposed fundraising of approximately GBP1.6
million (approximately $2.0 million) (before expenses) through the
issue of an aggregate of 158,570,498 new shares of $0.0001 each
("New Shares") to new and existing investors at a price of 1p per
New Share (the "Issue Price") (the "Fundraising"). The New Shares
will rank pari passu in all respects with the existing shares of
$0.0001 each in issue ("Shares").
Completion of the proposed fundraising is conditional upon,
inter alia, passing of resolutions by shareholders at the Annual
General Meeting of the Company in order to ensure that the
Directors have the necessary authorities and powers to allot the
New Shares for cash on a non-pre-emptive basis. Notice of the
Annual General Meeting is included in a circular which is being
posted to Shareholders today (the "Circular"). The background to
and reasons why the Board believes that the proposed fundraising is
in the best interests of the Company and its shareholders as a
whole and why the Directors unanimously recommend that shareholders
vote in favour of the resolutions contained in the Circular are set
out below.
The Company expects to issue 100,271,289 New Shares pursuant to
a placing agreement entered into by the Company with its broker, WH
Ireland Limited, (the "Placing Agreement") (the "Placing"), such
shares to be issued to investors in the United Kingdom. Subscribers
have also entered into conditional subscription agreements (the
"Subscription Agreements") with the Company to subscribe for an
aggregate of 58,299,209 New Shares (the "Subscriptions").
The net proceeds of the Placing and Subscriptions will be used
to provide additional working capital and to fund the continued
commercialisation of the Company's lead reduction technology and
launch of its astrea(TM) branded business in the United States. The
Directors anticipate that the net proceeds of the Fundraising will
provide sufficient working capital for the Company until
approximately the end of 2018. The Directors are continuing to
explore means of raising additional capital.
The Issue Price represents a premium of approximately 11 per
cent. to the mid-market closing price of 0.9p on 21 August 2018.
The Fundraising is not being underwritten and is conditional on,
inter alia, the passing of a resolution to waive pre-emption rights
in respect of the Fundraising by shareholders at the Annual General
Meeting of the Company to be held at 1725 220(th) Street SE, Suite
103, Bothell, Washington 98021 at 4.00 p.m. on 10 September
2018.
The New Shares will represent approximately 22 per cent. of the
issued share capital of the Company as enlarged by the Fundraising
(the "Enlarged Share Capital").
Application will be made to the London Stock Exchange for the
New Shares to be admitted to trading on AIM ("Admission"). The New
Shares will rank pari passu in all respects with the Shares,
including the right to receive all dividends and other
distributions declared, made or paid in respect of the Shares
following Admission. It is expected that such Admission will become
effective, and that dealings on AIM will commence, at 8.00 a.m. on
11 September 2018. Following Admission, the Company's issued share
capital will consist of 721,576,274 Shares.
Related party transactions
Invesco Asset Management Limited and Woodford Investment
Management Limited are substantial shareholders of the Company (the
"Substantial Shareholders") and therefore classified as related
parties under the AIM Rules for Companies ("AIM Rules"). Alan
Matthews, James Thompson, Craig Crowell, and Kent Johnson (the
"Participating Directors") are, by virtue of their directorships of
the Company, also related parties of the Company under the AIM
Rules. The Substantial Shareholders' and Participating Directors'
(together the "Related Parties") participations in the Fundraising
are considered related party transactions under the AIM Rules.
The independent Director, Massoud Entekhabi, the only Director
not subscribing in the Fundraising, having consulted with the
Company's nominated adviser, WH Ireland Limited, considers that the
terms of the participations of the Related Parties in the
Fundraising are fair and reasonable insofar as the Company's
shareholders are concerned.
The Related Parties' interest in the Company, following
Admission, will be:
Related Current Shareholding Shares being Shareholding Percentage
Party acquired pursuant following Admission holding following
to the Fundraising Admission
Invesco
Asset Management
Limited 154,497,346 43,511,045 198,008,391 27.4%
Woodford
Investment
Management
Limited 140,238,799 56,760,244 196,999,043 27.3%
Kent Johnson 6,421,075 3,937,007 10,358,082 1.4%
James Thompson 5,834,579 3,937,007 9,771,586 1.4%
Alan Matthews 1,500,708 2,000,000 3,500,708 0.5%
Craig Crowell 652,781 787,401 1,440,182 0.2%
Expected timetable
Announcement of the Fundraising 21 August 2018
Latest time for receipt of Forms 4.00 p.m. on 5 September 2018
of Instruction
Latest time for receipt of Forms 4.00 p.m. on 6 September 2018
of Proxy
Annual General Meeting 4.00 p.m. on 10 September 2018
Admission of the New Shares 11 September 2018
Each of the times and dates above is subject to change. Any such
change will be notified by an announcement on a Regulatory
Information Service. All times in this announcement refer to
British Summer Time.
Background to and reasons for the Fundraising
As announced in the Company's preliminary results for the year
ended 31 December 2017, the Company has focused on growing its
business to a profitable scale as quickly as possible. The recently
announced launch of the astrea(TM) ONE bottle at our first retail
customer in the US, along with growing awareness of the seriousness
of heavy metal contamination in drinking water, provides confidence
that this product will be a commercial success.
The profitable growth of the Company's hydration products in the
US is the Company's immediate objective. To support this strategy,
the Company has launched the Fundraising to provide the additional
working capital required by the Company to finance the launch of
the Company's lead reduction technology via both e-commerce and
retail channels and continue the growth of HaloSource's drinking
water business.
Trading update
In the final results announcement issued on 9 May 2018, the
Board indicated that achievement of market forecasts for the year
ended 31 December 2018 would depend on the generation of
significant H2 2018 sales. As a result of delays in anticipated
sales orders in the Company's OEM division and the launch of
astrea(TM) , the Board now expects results for the year to be
significantly below market expectations.
Change of Adviser
HaloSource announces the appointment of WH Ireland Limited as
its Nominated Adviser and sole Broker with immediate effect.
Issue of Warrants
In conjunction with the Fundraising, the Company has agreed to
issue WH Ireland Limited warrants to subscribe for 3,171,410 shares
of $0.0001 each at an exercise price of 1p per share.
For further information, please contact:
HaloSource, Inc.
James Thompson, Chief Executive
Officer +1 425 419 2258
Craig Crowell, Chief Financial
Officer +1 425 419 2248
WH Ireland Limited (NOMAD and Broker)
Tim Feather / Chris Viggor +44 (0) 20 7220 1666
About HaloSource
HaloSource Corporation innovates and integrates technologies to
deliver clean drinking water solutions to partners with trusted
brands around the world. The Company works with scientists and
industry experts across the globe in search of new ways to improve
drinking water quality and has been awarded more than 30 patents
for its ground-breaking chemistries, which provide safe drinking
water for more than 10 million consumers globally. The Company's
class-leading HaloPure(R) Drinking Water technology has the highest
global certifications, including registration with the US EPA.
Founded in Seattle, Washington, HaloSource has grown to become
an influential leader in drinking water purification. HaloSource is
headquartered in the US with operations in China and in India.
Learn more about the Company's research and development and future
novel technologies by visiting www.halosource.com or
www.astreawater.com.
The HaloPure(R) and astrea(TM) brands are registered trademarks
of HaloSource. All other trademarks, brand names or product names
belong to their respective holders.
Forward-looking statements
This announcement contains statements about the Company that are
or may be deemed to be "forward-looking statements".
All statements, other than statements of historical facts,
included in this announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", "would", "could", "continue" or words or
terms of similar substance or the negative thereof, are
forward-looking statements. Forward-looking statements include,
without limitation, statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the
operations of HaloSource Corporation.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Investors should not place undue
reliance on such forward-looking statements and, save as is
required by law or regulation (including to meet the requirements
of the AIM Rules, the Prospectus Rules and/or the FSMA), HaloSource
Corporation does not undertake any obligation to update publicly or
revise any forward-looking statements (including to reflect any
change in expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to the Company or any persons acting on their behalf are
expressly qualified in their entirety by the cautionary statement
above. All forward-looking statements contained in this
announcement are based on information available to the Directors of
the Company at the date of this announcement, unless some other
time is specified in relation to them, and the posting or receipt
of this announcement shall not give rise to any implication that
there has been no change in the facts set forth herein since such
date.
Details of the Placing and Subscriptions
The Company has today announced that it has conditionally
raised, in aggregate, approximately GBP1.6 million (approximately
$2.0 million) (before expenses) by way of a Placing of 100,271,289
New Shares and Subscriptions for 58,299,209 New Shares with certain
new and existing investors representing 22 per cent. of the
Enlarged Share Capital, at an Issue Price of 1p per New Share. All
of the Placing Shares have been conditionally placed pursuant to
the Placing Agreement.
The Issue Price of 1p per New Share represents a premium of
approximately 11 per cent. to the closing price of 0.9p on 21
August 2018. The Board unanimously agrees that the method of issue
is appropriate to secure the investment necessary in order to
provide funds for the growth and development of the Company.
The Placing and Subscriptions are conditional on, inter
alia:
-- The passing of the requisite resolutions at the Annual General Meeting;
-- The conditions in the Placing Agreement being satisfied or
(if applicable) waived and the Placing Agreement not having been
terminated in accordance with its terms prior to Admission; and
-- Admission becoming effective by no later than 8.00 a.m. on 11
September 2018 (or such time and / or date, being no later than 25
September 2018, as the Company and its broker may agree).
Accordingly, if any of these conditions are not satisfied or, if
applicable, waived, the Placing will not proceed.
In connection with the Subscriptions, the subscribers have
entered into the Subscription Agreements.
Terms of the Placing Agreement
Under the terms of the Placing Agreement, the Company's broker
has agreed to use its reasonable endeavours, as an agent to the
Company, to place the Placing Shares at the Issue Price with
certain investors.
The Placing is not being underwritten.
The Placing Agreement provides for payment of certain fees and
commissions.
The Placing Agreement contains customary warranties given by the
Company in relation to, inter alia, the accuracy of the information
in this announcement, certain financial information and other
matters relating to the Company and its business. In addition, the
Company will provide certain indemnities in respect of certain
liabilities in connection with the Placing.
The Placing Agreement may be terminated in certain customary
circumstances prior to Admission, including if: (i) the Company is
in breach of the terms of the Placing Agreement (including the
warranties); and/or (ii) there occurs a material adverse change in
or an event having a serious adverse effect on any of the financial
markets, or the operations, condition (financial or other), trading
position or prospects or results of operations of the Company.
If this right is exercised, the Placing will not proceed.
The Placing Agreement is not subject to any right of termination
after Admission.
Annual General Meeting
A notice convening the Annual General Meeting to be held at 1725
220(th) Street SE, Suite 103, Bothell, Washington 98021 at 4:00
p.m. on 10 September 2018 will be posted to shareholders. The
resolutions to be proposed at that meeting are summarised
below.
1. Ordinary Resolution - approve the re-election of the
following directors of the Company: Alan Matthews, James Thompson,
Craig Crowell, Kent Johnson and Massoud Entekhabi.
2. Special Resolution - amend the Company's Articles of
Association to increase the number of shares authorised to be
issued by the Company.
3. Special Resolution - disapplication of the shareholders
pre-emption rights in connection with the proposed issue of New
Shares pursuant to the proposed Fundraising.
4. Special Resolution - adoption of a new equity incentive plan
by the Company.
5. Ordinary Resolution - approve the re-appointment of the
Company's auditor, BDO USA LLP.
6. Ordinary Resolution - approve the remuneration of the
Company's auditor.
Directors' and PDMR's Shareholdings
The beneficial and non-beneficial interests of the Directors and
persons closely associated with them in Shares at the date of this
announcement and following the Fundraising are set out in the table
below.
Date of this Announcement New Shares Immediately following
Admission
Number Percentage Number of Number of Percentage
of Shares of existing New Shares Shares of Enlarged
share capital Share Capital
Director
Kent Johnson 6,421,075 1.1% 3,937,007 10,358,082 1.4%
James Thompson 5,834,579 1.0% 3,937,007 9,771,586 1.4%
Alan Matthews 1,500,708 0.3% 2,000,000 3,500,708 0.5%
Craig Crowell 652,781 0.1% 787,401 1,440,182 0.2%
Massoud Entekhabi 429,581 0.0% - 429,581 0.0%
Greg LaFata 10,544 0.0% 787,401 797,945 0.1%
Action to be taken in respect of the Annual General Meeting
Shareholders should check that they have received with the
notice of meeting:
-- A form of proxy or form of instruction for use in respect of
the Annual General Meeting; and
-- A reply-paid envelope for use in conjunction with the return of the form of proxy.
Whether or not Shareholders propose to attend the Annual General
Meeting in person, Shareholders are strongly encouraged to
complete, sign and return their form of proxy in accordance with
the instructions printed thereon as soon as possible, but in any
event so as to be received, by post to Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or
by hand to Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, during normal business hours
only, by no later than 4:00 p.m. on 6 September 2018 (or, in the
case of an adjournment of the Annual General Meeting, not later
than 48 hours before the time fixed for the holding of the
adjourned meeting (excluding any part of a day that is not a
business day in England)).
If Shareholders hold their shares in the Company in
uncertificated form (that is, in CREST), those Shareholders may
vote using the Form of Instruction or the CREST Voting Service in
accordance with the procedures set out in the CREST Manual (please
also refer to the accompanying notes to the Notice of General
Meeting set out in the Circular). Voting instructions submitted via
CREST must be received by the Company's Depositary (Computershare
Investor Services PLC) by no later than 4:00 p.m. on 5 September
2018 (or, in the case of an adjournment, not later than 72 hours
before the time fixed for the holding of the adjourned meeting
(excluding any part of a day that is not a Business Day)).
Appointing a proxy in accordance with the instructions set out
above will enable shareholder votes to be counted at the Annual
General Meeting in the event of Shareholder's absence. The
completion and return of the form of proxy will not prevent
shareholders from attending and voting at the Annual General
Meeting, or any adjournment thereof, in person should shareholders
wish to do so.
Recommendation
The Directors of the Company believe that the resolutions to be
proposed at the Annual General Meeting are in the best interests of
the Company and Shareholders as a whole and unanimously recommend
that shareholders vote in favour of the Resolutions.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCBLGDIXUDBGIB
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August 21, 2018 13:09 ET (17:09 GMT)
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