The global pandemic continues to impact the world on both a social and economic level. While our customers were reluctant to invest in CAPEX during these unsettling times, we have been working since spring to reshape and right-size our organization.
We are taking significant strategic steps to ensure we are in control and moving the business forward. Firstly, we have secured a rights issuance to facilitate next generation technology development and market penetration. Secondly, we are narrowing our focus on key markets. And thirdly, we are back on the road and selling at full force. Overall, today we are in a much healthier position ,bolstered by an increase in interest from prospective customers.
The rights issuance will secure the Company SEK 50.6 million before issue costs. Issue proceeds are intended to be invested as follows:
~40% to be used for the development of helioCORE™, biosensors and existing products. We are advancing the next generation of technology to harness light and crop control for sustainable digital farming.
~35% to drive our strategic expansion throughout Europe. After establishing a footprint in the US and Canada, it is now time for us to actively explore the EU market. Our goal is to have at least 30% of our revenues come from European customers within 3 years’ time. In order to do so we need to select the best network of channel partners, place staff and create the right offer accordingly.
~25% to be used to reinforce the Company’s financial position.
While to some extent the purpose of the rights issuance is to remedy the effects of Covid-19 on the business, its main objective is to give us the means for rapid growth over the coming years. Research and Markets forecasts a healthy compound annual growth rate of 20.2% by 2027 for the global horticulture lighting market. Heliospectra expects to share in that growth. So, despite the challenges presented by the pandemic, we look forward to harvesting rewards from the innovations we have been pioneering over the past 14 years.
As we expand into strategic markets, we are also continuously evaluating our existing ones. While we have a strong footprint in the North American cannabis market, we are recalibrating our presence across the vegetable sector to allow us to better focus on those with the highest potential.
The pandemic continues to significantly disrupt the global economy, and thus our sales results have been impacted similar to prior periods. However, due to our strong marketing and sales efforts in Q2, our pipelines continue to fill with strong leads which we are aggressively working to further cultivate. Importantly, the sales team is back on the road and meeting with potential clients and current customers – in a safe and responsible manner.
We are also actively managing ongoing projects such as Nectar Farms. Backed up by strong investors, the project is moving ahead but awaiting a construction date dependent upon lockdowns in Victoria. Until then, we are in constant communication with their team to ensure we provide any support needed.
In conclusion, we are proud of the groundwork we have laid over the last 9 months, which has positioned us to finish the year strong. With the additional funding and an energetic focus on executing our strategy, we will continue to strengthen our organization, our networks and our product offerings to advance our business.
President & CEO
Head of IR
+46 (0)72 536 8116
+46 (0)8 121 576 90