XRF Scientific to raise $1.2m in placement

Midvale-based scientific instrument manufacturer XRF Scientific Ltd aims to raise $1.2 million through a non-renounceable rights issue to shareholders on a basis of one new share for every three held.

The offer will be underwritten by Novus Capital Ltd.

The full text of a company announcement is pasted below

As previously announced, the Company is making a pro-rata non-renounceable rights issue to shareholders who are registered at 5.00pm WST on 18 October 2007 ("Record Date") of approximately 23,652,921 fully paid ordinary shares at an issue price of $0.05 each ("Shares") to raise approximately $1,182,646 (before expenses of the issue) ("Rights Issue"). The Shares will be offered on the basis of one Share for every three Shares held.

The Company confirms the Rights Issue is being made without a disclosure document, pursuant to the exemption granted in section 708AA of the Corporations Act 2001 (Cth) (the "Act").

Pursuant to section 708AA(7) of the Corporations Act, the Company provides the following information in the 24 hour period prior to despatch of the Letter of Offer and Entitlement and Acceptance Forms:

The Company advises:

• The Shares will be offered under a rights issue as defined in the Act;
• The Shares are in a class of securities, being fully paid ordinary shares, that are quoted securities at the time at which the offer will be made;
• Trading on the stock market conducted by ASX in the fully paid ordinary shares in the capital of the Company was not suspended for more than 5 days during the period since quotation of the Company's securities on 31 October 2006;
• No exemption under section 111AS or 111AT covered the Company, or any person as director or auditor of the Company, at any time during the period since quotation of the Company's securities on 31 October 2006, being the relevant period referred to in paragraph (c); and
• No order under section 340 or 341 covered the Company, or any person as director or auditor of the Company, at any time during the relevant period referred to in paragraph (c).

Pursuant to section 708AA(7) of the Act, the Company provides the following information:

• The Company will offer the Shares for issue without disclosure to investors under Part 6D.2 of the Act;
• The Company is providing this notice under paragraph (2)(f) of section 708AA of the Act;
• As at the date of this notice, the Company has complied with:
  • The provisions of Chapter 2M of the Act as they apply to the Company;
  • Section 674 of the Act;
• As at the date of this notice there is no excluded information being information:
  • That has been excluded from a continuous disclosure notice in accordance with the Listing Rules of ASX; and
  • That investors and their professional advisers would reasonably require for the purpose of making an information assessment of:
    • The assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or
    • The rights and liabilities attaching to the fully paid ordinary shares of the Company.
• Under the Rights Issue, approximately 23,652,921 Shares (subject to rounding) will be issued (this number may have to be increased by up to 3,100,000 Shares if existing option holders exercise their options prior to the Record Date). The Shares will be issued for $0.05 each.

The Company has entered into an Underwriting Agreement with Novus Capital Limited ("Novus Capital" or the "Underwriter") to underwrite up to 23,652,921 Shares offered pursuant to the Rights Issue. Novus Capital will receive a fee in respect of the underwriting of the Rights Issue of 6% of the total amount to be raised. The Company must notify the Underwriter of the amount of shortfall shares, and the amount required to be paid for those Shares, within 3 business days of the Closing Date. Within a further 2 business days the Underwriter must subscribe for, or cause to subscribe for, all of the Shortfall Shares. The Company must allot the Shortfall Shares to the Underwriter (or as directed) in accordance with the timetable for issue of Shares under this Rights Issue. The Underwriter may enter into arrangements for sub-underwriting its obligations under the Underwriting Agreement. Unless required by law, the Company will not disclose the identity of any sub-underwriter without the prior consent of Novus Capital.

D and GD Brown Nominees Pty Ltd, a company associated with Mr David Brown, a Director of the Company, has entered into a sub-underwriting agreement with the Underwriter to subunderwrite 3,500,000 Shares offered pursuant to the Rights Issue (representing subscription monies of approximately $175,000). Mr Brown will not receive any fees from the Company or the Underwriter for the sub-underwriting.

Sparrow Holdings Pty Ltd, a company associated with Mr Terry Sweet, a Director of the Company, has entered into a sub-underwriting agreement with the Underwriter to subunderwrite 10,000,000 Shares offered pursuant to the Rights Issue (representing subscription monies of approximately $500,000). Mr Sweet will not receive any fees from the Company or the Underwriter for the sub-underwriting.

Upon completion of the Rights Issue, and assuming existing option holders do not exercise their options, the issued capital of the Company will comprise approximately 94,611,683 Shares, 4,000,000 options exercisable at $0.20 each on or before 30 June 2010, 2,800,000 options exercisable at $0.16 each on or before 31 October 2009, 1,500,000 options exercisable at $0.16 each on or before 20 June 2010 and 1,000,000 options exercisable at $0.20 each on or before 31 January 2009.

If all members take up their entitlements under the Rights Issue, the Rights Issue will have no effect on the control of the Company. If all members do not take up their entitlements under the Rights Issue, the underwriter Novus Capital would acquire up to 23,652,921 Shares, representing up to 25.0% of the Company's voting shares.

There will be no deferred settlement of the sale of shares offered under the Rights Issue. Trading in shares will commence on the first business day following the despatch of the holding statements.