HaloSource Corporation Proposed Disposal and Delisting from AIM (9382P)

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RNS Number : 9382P

HaloSource Corporation

14 February 2019

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

HaloSource Corporation

("HaloSource" or the "Company")

Proposed Disposal, Proposed Cancellation of the Company's Shares from Trading on AIM and Notice of General Meeting

HaloSource Corporation (HAL.LN, HALO.LN), the global clean water technology company traded on the London Stock Exchange's AIM market, announces that the circular to shareholders containing details of the proposed disposal of substantially all the Company's assets as announced on 7 February 2019 and the proposed cancellation of the Company's shares from trading on AIM (the "Circular"), including a notice of general meeting, has today been posted to shareholders. The general meeting is to be held at the offices of the Company, Suite 103, 1725 220(th) St SE, Bothell, Washington on 26 February 2019 at 09:30 a.m. Pacific time. A copy of the Circular is available on the Company's website at www.halosource.com.

The Chairman's letter, as contained in the circular, is set out below. Terms used and not identified in this announcement bear the meanings attributed to them in the Circular.

Enquiries:

 
HaloSource Corporation                              Tel: [phone] 
 James Thompson (Chief Executive Officer)            Tel: [phone] 
 Craig Crowell (Chief Financial Officer) 
WH Ireland Limited (Nominated Adviser and Broker)  Tel: [phone] 
 Chris Fielding / Chris Viggor 
 

LETTER TO SHAREHOLDERS FROM THE NON-EXECUTIVE CHAIRMAN

Dear Shareholders

The Company announced on 7 February 2019 that it had received an offer (the "Offer") from Strix Group PLC ("Strix") to acquire the majority of the Company's assets for a cash consideration of approximately U.S.$1.3 million (the "Disposal").

In view of the size of these assets relative to the total assets of the Company, the Disposal will result in a fundamental change of business of the Company under Rule 15 of the AIM Rules and, therefore, completion of the Disposal ("Completion") is conditional upon the approval of HaloSource shareholders.

As a result of the Disposal, the Company announces that it is also seeking shareholder approval at the Special Meeting for the cancellation of the admission of its Common Shares to trading on AIM (the "Cancellation"). The Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent. of the votes cast by HaloSource shareholders (whether present in person or by proxy) at the Special Meeting.

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the date of the proposed Cancellation.

Highlights

   --     Approximately U.S.$1.3 million to be paid in cash upon Completion. 

-- Following the Disposal (if completed), the Company will repay amounts outstanding to creditors and effect a wind down of the business.

The Disposal Consideration

Strix (or its wholly owned subsidiary) will acquire HaloSource Water Purification Technology (Shanghai) Co. Ltd., the Company's wholly owned subsidiary in China, along with substantially all of the assets of the Company's US subsidiary, HaloSource, Inc. Under the terms of the Offer, the Company will receive, on Completion, a cash payment of approximately U.S.$1.3 million, including an advance of funds to the Company for working capital purposes of approximately U.S.$0.1 million by way of an unsecured promissory note.

The book value of the assets expected to be sold at 30 June 2018 was approximately U.S.$2.8 million. For the six months to 30 June 2018 those assets incurred a loss of approximately U.S.$3.7 million and for the year to 31 December 2017 a loss of approximately U.S.$5.3 million.

Rationale for the Disposal and the Cancellation

As announced on 20 December 2018, the Company has been unsuccessful in seeking additional funding to continue as a going concern. As a result, the Company has sought to dispose of its assets in a manner that will allow the Company to settle amounts outstanding with creditors and effect a wind down of the business and the cancellation of its shares from trading on AIM. It is not expected that any payment will be made to shareholders.

Assuming shareholders approve the Disposal and Cancellation resolutions, it is expected the Company's common shares will be cancelled from trading on AIM at 07:00 a.m. on 12 March 2019. Following this date, there will be no formal facility for shareholders to effect transactions in the Company's common shares.

Should the proposed Disposal not be approved by shareholders, the Company will be unable to continue operation and would immediately be placed into administration.

Use of Proceeds

The Company expects to use the net proceeds from the Disposal to satisfy unpaid creditors and effect a wind down of the business.

Action to be taken

Whether or not you intend to be present at the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it as soon as possible so as to be received by the Company's registrars, Computershare Investor Services PLC at The Pavilions, Bridgwater Rd, Bristol BS99 6ZY no later than 08:00 a.m. on 22 February 2019. If you hold shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to the Registrars (Crest Participant ID: 3RA50) so that it is received by no later than 08:00 a.m. on 25 February 2019. The return of the Form of Proxy or transmission of a CREST Proxy Instruction will not prevent you from attending the meeting and voting in person if you wish.

Recommendation

The Directors consider the proposals set out in this document to be fair and reasonable and in the best interests of the Company. Accordingly, the Directors unanimously recommend that the Shareholders vote in favour of the Resolutions.

Yours faithfully

Alan Matthews

Non-Executive Chairman

HaloSource Corporation

13 February 2019

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February 14, 2019 02:00 ET (07:00 GMT)