HaloSource Inc Completion of Fundraising (5349I)

TIDMHAL TIDMHALO

RNS Number : 5349I

HaloSource Inc

20 June 2017

20 June 2017

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

HaloSource, Inc.

("HaloSource" or the "Company")

Completion of GBP1.8 million fundraise

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 raised approximately GBP1.8 million ($2.2 million) through the issue of an aggregate of 117,692,560 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 GBP1.0 million ($1.3 million) through a placing (the "Placing") of 68,826,609 new Common Shares (the "Placing Shares") and subscriptions (together with the Placing, the "Fundraise") for 48,865,951 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, fund commercialisation of the Company's lead removal technology and allow the Company to expand its drinking water business.

-- The New Common Shares will represent approximately 35% of the enlarged issued common share capital of the Company.

-- The necessary shareholder resolutions to enable the Fundraise to be completed were passed at the general meeting of the Company previously convened on 17 May 2017. The resolutions passed provided the Company with the authority to allot up to 600,000,000 shares of common stock and up to 125,377,866 new common shares on a non-pre-emptive basis.

-- 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

Since 2016 the Company has continued to take proactive steps in order to reduce its cash burn rate. However, the Fundraise is necessary to provide the additional working capital to fund the Company beyond Q2 2017.

On completion of the Fundraise, the Company expects to have sufficient cash to fund it through to Q2 2018, and will be able to continue progress on the development and scale-up of the Company's new lead removal technology. The Company believes that the lead removal technology will enable the Company to offer a powerful combination of heavy-metal removal along with viral and bacterial disinfection already provided by its HaloPure(R) technology.

The appendix to this announcement (the "Announcement"), which forms part of the Announcement, sets out further important details of the Fundraise.

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.

Enquiries:

 
 
   HaloSource, Inc. 
 James Thompson, Chief Executive 
  Officer                           [phone] 
 Craig Crowell, Chief Financial 
  Officer                           [phone] 
 
 Hybridan LLP (Sole Broker) 
 Claire Noyce                       [phone] 
 
 Liberum Capital Limited (NOMAD) 
 Richard Bootle, Jill Li, Steve 
  Pearce                            [phone] 
 

About HaloSource

HaloSource, Inc. 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 cutting edge technologies by visiting www.halosource.com.

HaloPure(R) is a registered trademark of HaloSource, Inc. All other trademarks, brand names or product names belong to their respective holders.

This document contains certain forward-looking statements relating to the Company. The Company considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Company to differ materially from those contained in any forward-looking statement. These statements are made by management in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Hybridan LLP, which is regulated by the Financial Conduct Authority, is acting exclusively for HaloSource in connection with the Placing and no-one else and will not be responsible to anyone other than HaloSource for providing the protections afforded to customers of Hybridan LLP, or providing advice in connection with the Fundraise or any transaction or arrangement referred to in this announcement.

Liberum Capital Limited, which is regulated by the Financial Conduct Authority, is acting exclusively for HaloSource in its role as nominated adviser and no-one else and will not be responsible to anyone other than HaloSource for providing the protections afforded to customers of Liberum Capital Limited, or providing advice in connection with the Fundraise or any transaction or arrangement referred to in this announcement.

This announcement does not constitute, or form part of, an offer, or solicitation of an offer, or invitation to subscribe for or purchase any rights, ordinary shares or other securities of the Company in the United States. In addition, the securities of the Company to be issued in the Placing have not been, and will not be, registered under the US Securities Act of 1933 (as amended) (the "Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold or delivered within, in or into the United States or to, or for the account or benefit of, US Persons absent an applicable exemption from the registration requirements of the Securities Act. There will be no public offer of securities within the United States.

APPIX: FURTHER DETAILS OF THE FUNDRAISE

Terms of the New Common Shares

The New Common Shares will be issued credited as fully paid and will rank equally with the existing Common Shares, including the right to receive all dividends and other distributions declared in respect of such shares after the date of their issue. Following completion of the Fundraise, the total issued common share capital of the Company will comprise 337,970,964 common shares of no par value, admitted to trading on AIM.

The Company will apply for admission to AIM ("Admission") of the New Common Shares. Admission is expected to occur at 8:00 a.m. on 23 June 2017.

Related party transactions

Under the AIM Rules for Companies (the "AIM Rules") a non pre-emptive issue of shares to a related party which exceeds specified class tests is subject to certain disclosure requirements.

Due to their holding of over 10% of the Company's current issued common share capital, the participation in the Placing by Invesco Asset Management Limited ("IAML") as agent for and on behalf of its discretionary managed clients (which has previously notified HaloSource that the aggregate holding of these clients was 62,997,274 Common Shares, representing approximately 29% of HaloSource's current issued common share capital) is deemed a transaction with a related party under the AIM Rules. IAML as agent for and on behalf of its discretionary managed clients has agreed conditionally to subscribe for 33,660,072 Placing Shares under the Placing, such that it will hold approximately 29% of the enlarged issued common share capital of the Company following the Fundraise. The directors of the Company consider, having consulted with Liberum, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Due to their holding of over 10% of the Company's current issued common share capital, the participation in the Placing by Woodford Investment Management ("WIM") is deemed a transaction with a related party under the AIM Rules. WIM has conditionally agreed to subscribe for 29,293,678 Placing Shares under the Placing, such that it will hold approximately 25% of the enlarged issued common share capital of the Company following the Fundraise. The directors of the Company consider, having consulted with Liberum, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Directors, senior management and associates participation

Certain directors, members of senior management and associates of the Company have agreed to subscribe for an aggregate of 6,871,200 Subscription Shares, further details of which are set out below:

 
     Subscriber        Subscription Shares 
 James Thompson             3,200,000 
 Martin Coles                533,333 
 Kent Johnson               1,066,666 
 Alan Matthews               666,667 
 Craig Crowell               333,333 
 G. Scott Greenberg         1,071,201 
 

James Thompson, Kent Johnson, Alan Matthews and Craig Crowell, directors of the Company, are related parties of the Company for the purposes of the AIM Rules. Martin Coles is a related party of the Company for the purposes of the AIM Rules on the basis that he has been a director of the Company within the past 12 months. Scott Greenburg is also deemed to be a related party of the Company by reason of his prior position as company secretary of the Company.

The participations in the Subscription as set out above are deemed related party transactions pursuant to the AIM Rules. The independent director, being Massoud Entekhabi, considers, having consulted with Liberum, that the terms of the participations in the Subscription are fair and reasonable insofar as the Company's shareholders are concerned.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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June 20, 2017 02:00 ET (06:00 GMT)