Norsk Titanium AS, a company offering wire-based metal AM production services (mainly to aerospace) via proprietary RPM technology, has entered into a new bridge loan for NOK 21.9 million (about two million USD) with White Crystals Ltd. to meet existing needs for additional liquidity. Norsk generated revenues of USD 1.1 million and a loss before tax of USD 5.2 million for the first half 2023 but the company had generated as much as 5 million USD in FY 2021.
White Crystals is a shareholder in Norsk Titanium Cayman Ltd., which is the Company’s largest shareholder at 34.9%, but is acting on its own behalf. White Crystals has initiated a process whereby its pro rata portion of the Company’s common shares currently owned by Norsk Titanium Cayman Ltd. will be transferred to White Crystals.
The loan from White Crystals will be used to extend the Company’s cash runway further and enable the company to continue exploring opportunities to secure long-term funding. Norsk Titanium continues to implement cost saving measures to preserve liquidity and, with the latest bridge loan, the Company will have a cash runway for current operations until mid-December 2023.
The loan from White Crystals is non-interest bearing but the Company will pay a one-time facilitation fee equal to 250,000 common shares. In addition, in the event that the funding of the Company is not completed prior to 1 January 2024, the Company shall pay White Crystals a fee in the form of 125,000 common shares for each additional month until the loan is fully repaid.
The company has also appointed its Chief Technology Officer and industry veteran Carl Johnson as Interim Chief Executive Officer effective immediately. Former CEO Mike Canario will leave Norsk Titanium to assume the position as Chief Executive Officer of Qarbon Aerospace, a premier manufacturer of composite components and assemblies. “We want to thank Mike for his contributions during his more than five-year tenure. We wish him the best of luck with his next endeavor,” said John Andersen, Chairman of the Board of Norsk Titanium. The Board of Directors has initiated the search for a permanent CEO.
Carl Johnson has been the Chief Technology Officer of Norsk Titanium since 2016 and has been closely involved in developing RPD, the company’s proprietary additive manufacturing process that delivers structural titanium parts to aerospace, defense and other industries. He was instrumental in getting the first RPD parts on the Boeing 787 program and continues to play a leading role in the ongoing qualification efforts with Airbus and other customers. “We are lucky to have a seasoned professional like Carl with a trusted reputation throughout the industry to take the reins and lead the company through a crucial growth phase,” added Andersen.
With respect to the loan from White Crystals, it is the parties’ intention that following the issuance of new shares or other issuance of financial instruments by Norsk Titanium, or long-term debt financing, White Crystals shall have a right to decide, but be under no obligation to, convert the loan into shares at a conversion price being equal to the subscription price of any such Company funding.
In order to settle the Facilitation Fee, the Board of Directors of Norsk Titanium AS have resolved to issue 250,000 new shares at a subscription price of NOK 0.08, pursuant to an authorisation to increase the share capital granted by an extraordinary general meeting on 11 April 2023.
Following registration of the share capital increase pertaining to the Board of Directors’ resolution to issue shares in order to settle the Facilitation Fee with the Norwegian Register of Business Enterprises, the Company will have a share capital of NOK 21,601,452.32 divided into 270,018,154 shares, each with a par value of NOK 0.08.
Issuance of shares to settle the Facilitation Fee and potentially the Make Whole Fee represents a deviation from the shareholders’ pre-emptive right to subscribe for shares. The Board of Directors has carefully considered such deviation, considering, among other things, the terms of the loan and the possibility to raise funds in an expedient and flexible manner, and has resolved that the issuance is in the best interests of the Company and its shareholders.
The Company notes that no assurances can be given as to the outcome or timing of the review process or ongoing discussions on funding. Should the process of securing funding extend beyond the available cash runway, the Company may not be able to financially support current operations and be required to implement inter alia cost-reducing measures and assess continued operations.
