ASX ANNOUNCEMENT
23 October 2017
CFOAM Limited | ABN 46 611 576 777
Level 1, 33 Ord Street, West Perth WA 6005
PH : 61 8 9420 9300 www.CFOAM.com
PAGE 1
CFOAM LIMITED COMPLETES HEAVILY OVER-SUBSCRIBED A$4.5 MILLION SHARE
PLACEMENT
Highlights
• CFO receives commitments to issue 12.5 million shares to sophisticated investors
at $0.36 per share to raise A$4.5 million
• The Board welcomes several new, prominent institutional investors onto the
Register
• Placement provides CFO with the necessary liquidity, flexibility and financial
strength to more rapidly pursue Phase 1 and Phase 2 capital expansion plans –
completion of which will initially triple capacity production to 25,000cft and
ultimately triple production again to 70,000-80,000 cft
• Operational turnaround continues with just-completed September quarter
representing the nadir in terms of product quality, productivity and sales volumes
• Touchstone Research Laboratories (TRL) founder, Brian Joseph, to sell 2 million
shares to single institutional investor to directly fund important TRL capital
expansion plans
• CFO’s realisable revenue potential post-Phase 2 completion is projected to be
approximately $US28 million, with EBITDA generation in excess of $US10 million
per annum
CFOAM Limited (CFO or the Company) through its 100%-owned subsidiary, CFOAM LLC,
manufacturer of carbon foams CFOAM® and PFOAM, used for ultra-high-end performance
engineering materials in the industrial, aerospace, military and commercial product markets,
is pleased to announce that the Company has received very strong commitments to raise
A$4.5 million through the placement of 12,500,000 new fully paid ordinary shares at $0.36 to
predominantly new institutional and sophisticated investors (Placement). The placement is
being made using the Listing Rule 7.1 capacity.
During the Company’s recently completed Australian investor roadshow, numerous key
institutions expressed very strong interest to fund the Company’s expansion plans. This key
institutional support was evidenced by CFO’s clear ability to raise capital effectively “at
market”, with no discount to the prior trading close, and no attaching warrants or options.
The funds raised under the Placement will be used towards:
• Accelerated completion of Phase 1 capital expansion plan - start-up date projected to
be August 2018;
• Funding of pre-development work and scoping studies for Phase 2 capital expansion
plan;
ASX ANNOUNCEMENT
23 October 2017
CFOAM Limited | ABN 46 611 576 777
Level 1, 33 Ord Street, West Perth WA 6005
PH : 61 8 9420 9300 www.CFOAM.com
PAGE 2
• Meeting original Asset Purchase Agreement milestone payment to TRL (due mid-
2018) well in advance of payment due date;
• Funding the build-out of sales and business development platforms; and
• Other material continuous improvement and business expansion activities, and
potential working capital requirements.
Post completion of the Placement, CFO now has a materially strengthened balance sheet and
the full financial flexibility to seamlessly and more rapidly execute the already announced
Phase 1 expansion plan (to bring annual CFOAM® production capacity to 25,000cft from
9,000cft) and concurrently work towards a full and timely commitment to the Phase 2
expansion plan (to bring annual production capacity to 70,000+ cft – representing a dramatic
increase in realisable revenue to approximately $US28 million).
Given the Company’s broad and rapidly expanding sales pipeline, the Board strongly believes
it is in the best interests of shareholders to expedite expansion plans as quickly as possible –
in conjunction with the material, and highly attractive, State of West Virginia funding already
secured. Funds from the Placement will permit key preliminary expansion plans to advance
unfettered and more rapidly, while the Company will continue to explore further ongoing nondilutive
funding arrangements with similar terms to those already secured with the West
Virginia State bodies, WVED and WVJIT, as announced on 3 October 2017.
In order to fund his own financial commitments related to expansion plans for TRL, as well as
improve free float and strengthen the Register, Brian Joseph has agreed to sell 2 million
shares. Mr. Joseph remains the Company’s 3rd largest shareholder, and is committed to
growing TRL’s advanced tooling business, Touchstone Advanced Composites (TAC), alongside
and lock-step with CFO’s CFOAM® and PFOAM production business. Brian Joseph’s
commitment to this partnership is further evidenced by Brian’s recent appointment to the role
of Senior Scientific Advisor at CFO and his key involvement in the Company’s recent Australian
investor roadshow.
In addition to an efficient and optimised expansion of production capacity, strengthening the
balance sheet is a highly important growth catalyst for the Company. This will provide CFO’s
very large, globally significant customers with the confidence that the Company has the
financial capacity to increase production more rapidly, achieve a greater scale, and ultimately
meet their ever-increasing demands for CFOAM® and PFOAM in a timely fashion.
Management Commentary
CFO Executive Director, Alain Bouruet-Aubertot, commented:
“The support for this raising has been very pleasing indeed, and we welcome the new
institutional and sophisticated investors to our Register and thank them for their support. The
roadshow that I, Brian Joseph and Toby Chandler just completed with meetings held in
Sydney, Melbourne and Perth was met with tremendous institutional interest. This interest
ASX ANNOUNCEMENT
23 October 2017
CFOAM Limited | ABN 46 611 576 777
Level 1, 33 Ord Street, West Perth WA 6005
PH : 61 8 9420 9300 www.CFOAM.com
PAGE 3
has been clearly validated by the primary and secondary transactions that we have just
completed essentially “at market”.
“Our focus is now to capitalise on the significant market opportunities that we see. We are
very confident that the just-completed September quarter will represent the nadir in terms of
product quality, productivity and sales volume. As our broad operational improvements
continue, we will look to simultaneously ramp existing production while pursuing continuous
improvement initiatives, accelerate the execution of our Phase 1 expansion plans and work
towards finalising full Phase 2 feasibility and implementation with a view to achieving an
initial, and possibly higher, 70-80,000cft of annual capacity as quickly as possible.”
Settlement of unconditional placement
shares
Wednesday 25th October 2017
Allotment of new shares Friday 27th October 2017
For further details, please contact:
Alain F. Bouruet-Aubertot
Executive Director
E: [email protected]
Simon Hinsley
NWR Communications
E: [email protected]
P: +61-401-809-653
Toby Chandler
Director
E: [email protected]
Todd Hoare
Director
E: [email protected]
Gary Steinepreis
Non-Executive Chairman
E: [email protected]
About CFOAM Limited
CFOAM® is an inorganic carbon material that is manufactured from coal, pitch or lignin
feedstock. CFOAM® manufactured in this process has a rigid foam structure, similar in
appearance to pumice stone, but with entirely different properties. CFOAM® is currently used
across a wide variety of markets including composite tooling for the aerospace sector, energy
absorbing applications and defence applications. Additional markets such as the automotive
applications for energy absorption and fire resistance are also expected become significant to
the Company over time.
CFOAM® was developed to meet the growing demand for ultra-high-end performance
engineering materials in the, industrial, aerospace, military and commercial product markets.
(20min delay)