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  • Communications security firm Elsight (ELS) has launched a renounceable rights issue to raise up to $8.15 million
  • The one-for-six offeer has shares priced at 45 cents each — a 25 per cent discount to the 30-day volume-weighted average price
  • Every two shares purchased will also come with one attaching option exercisable at 90 cents and expiring at the end of March 2023
  • The funds will largely go towards the continued development and accelerated marketing of the company’s Halo Communication Platform
  • The company is also hoping to build a “war chest” for future mergers and acquisitions and to accelerate the company’s “aggressive planned organic growth”
  • Elsight was up 3.45 per cent before Monday’s market shutdown — it closed at 60 cents per share

Communications security firm Elsight (ELS) has launched a renounceable rights issue to raise up to $8.15 million.

The raise

Shareholders will be able to purchase one new share for every six shares held for 45 cents each — a 25 per cent discount to the 30-day volume-weighted average price.

Every two shares purchased will also come with one attaching option exercisable at 90 cents and expiring at the end of March 2023.

Shareholders will be able to trade their rights and apply for additional shares and options, starting from November 24.

The offer is underwritten up to $3 million by Mahe Capital, and Elsight’s directors will sub-underwrite the offer for an additional $50,000 from any resulting shortfall.

The directors also intend to subscribe for their full entitlements under the offer.

The spend

The funds will largely go towards the continued development and accelerated marketing of the company’s Halo Communication Platform.

Elsight plans to conduct trials with new customers and fund anticipated regulatory aviation approvals in the U.S., while also building inventory in anticipation of increased sales.

The company is planning to fill new and existing orders as quickly as possible to capitalise on the growing market for the Halo platform.

Funds will also be thrown into increased sales and marketing and thee hiring of new personnel to underpin the strategic growth.

Any remaining cash will be used for general working capital, and to create a “war chest” to fund potential mergers and acquisitions and to accelerate the company’s “aggressive planned organic growth”.

The company will be hoping for a strong response to the raise to guarantee it has enough cash on hand to capitalise on Halo’s rollout.

Elsight was up 3.45 per cent before Monday’s market shutdown — it closed at 60 cents per share.

ELS by the numbers
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