Redflow Limited (ASX:RFX) has received strong support from investors and the board in a capital raising which will fund a new residential product offering, which will be launched next month with deliveries expected from June 2016.
Redflow has developed the world's smallest, most advanced flow battery, which is cost effective, while being a safe energy utilisation and storage solution.
The company is now in a transition phase to commercialise its flow battery technology.
The raising will support technical and product development, product launch and marketing and establishing the commercial arrangements required by the business model including channels to market, training, installation and product support.
The product will add further depth to the Redflow product range, and could potentially open a whole new market and revenue stream.
Redflow is building a deployment channel strategy for Australia, with Europe the next likely market.
Redflow has completed a heavily oversubscribed placement at $0.23 to raise $7.36 million, and is now undertaking a fully underwritten entitlement offer to raise $5.56 million.
The placement received very strong support from the board, and includes a $1.5 million to interests associated with Simon Hackett, executive chairman, which is subject to shareholder approval in early April.
Details of the entitlement offer
The entitlement offer consists of a fully-underwritten pro-rata non-renounceable entitlement offer of 1 new share for every 15 shares held, priced at $0.23 per new share.
Under the offer, 24,185,028 new shares will be issued.
Redflow's near term key objectives
Residential product launch:
The Australian launch of Redflow's residential product in March 2016 with deliveries expected from June 2016.
Leveraging the residential product launch into core markets:
A continued focus on core markets of telecommunications and grid scale storage solutions with the aim of leveraging off the residential product launch and associated increased awareness of the product benefits and acceptance.
Full outsourcing of manufacturing to Flextronics:
The completion of the transition of electrode manufacturing to Flextronics and recommencement of production of completed products in April/May 2016.
Continuing focus on cost reduction in manufacturing:
- A program of cost reductions has commenced with Flextronics; and
- In addition, Redflow has a program of work to continue progress made in reducing the bill of material costs.
Continued ongoing product development:
- Optimisation of current technology expected to result in further reductions in cost per kWh in conjunction with ongoing next generation developments; and
- Developments focused on a combination of improved performance, lower cost and ease of manufacturability.
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