LifeBrandz to undertake rights issue at S$0.007/share

LIFEBRANDZ announced late on Friday that it is proposing to undertake a rights issue of up to 325.9 million new shares at an issue price of S$0.007 for each rights share for every two existing shares.

This represents a discount of approximately 46.2 per cent to the closing price of S$0.013 per share on its last full day of trading.

Assuming maximum subscription, the rights issue will raise net proceeds of S$2.18 million, after deducting the estimated professional fees and related expenses of about S$0.10 million.

Under that scenario, LifeBrandz will have an enlarged share capital of 977.6 million shares, up from 456.7 million currently. The rights shares will represent about 71.36 per cent of the existing share capital, and approximately 33.33 per cent of the enlarged share capital after the rights issue.

In a filing to the Singapore Exchange, the company said that the rationale for the rights issue is to finance the expansion of its food and beverage (F&B) business, in particular for the opening of the second new Hashida Sushi restaurant in San Francisco by the first quarter of 2019 as well as two more new Hashida Sushi restaurants in the near future.

It will also help to strengthen the group's financial position by enlarging its working capital base to "further enhance the financial flexibility" of the group, it added.

The company also announced adjustments to its existing warrants. Based on the 195.1 million existing warrants to date, warrantholders will receive approximately an additional 0.1404 additional warrants for every one existing warrant held. The exercise price of the existing warrants will be adjusted from S$0.04 to S$0.035.

The actual additional warrants to be issued will depend on the number of existing warrants as at the date by which acceptance of and payment for the rights shares is to be made under the rights issue.

Each additional warrant carries the right to subscribe for one additional share at the adjusted exercise price of S$0.035. Upon the exercise of the additional warrants, LifeBrandz will issue up to 27.4 million additional new shares.