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By Steve Moore | Monday 12 March 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Previously writing on HaloSource (HALO) last month, I noted developments again pointing to tight financials. There’s now a further announcement from the company…
This is of “a proposed relocation of its corporate domicile from Washington State, USA, to the British Virgin Islands and a change of name to HaloSource Corporation”. It is noted this is as US regulations “require the company to issue, in connection with any private offering to foreign purchasers, shares that bear restrictive legends requiring paper certificates, and the legend must be maintained for one year before dematerialisation, allowing electronic trading… limiting the company's ability to easily conduct offerings and raise funds, as well as limiting liquidity in the trading of the company's shares”.
Uh oh… and there it is; “the company's reasons… are specifically to remove what the directors believe is an impediment to the company raising additional capital”.
This follows a trading warning in December before a latest bailout from Woodford & co was even approved. That saw £2.8 million ($3.8 million) raised – but was with it having been cash crunch ahoy before and 2017 anticipated to show a net loss “in the range of $5.0 to $5.5 million”.
I wonder how long after a re-domicile, less impeded ability to raise additional capital will attempt to be used then? It remains my view that, at least until there’s evidence of having progressed to a sustainable cash situation, the stance is sell / bargepole.
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