TIDMFBT
RNS Number : 1163Q
Forbidden Technologies PLC
04 June 2018
4 June 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Forbidden Technologies plc
("Forbidden" or the "Company")
Placing to raise GBP5.75 million
and
Notice of General Meeting
Forbidden Technologies plc (AIM: FBT), the developer and seller
of cloud video platform technology using its patented Blackbird
technology, is pleased to announce an oversubscribed placing of
115,000,000 new ordinary shares of 0.8 pence each in the Company
("Placing Shares") at a price of 5 pence per share (the "Placing
Price") to raise GBP5.75 million before expenses (the "Placing"),
to be undertaken in two tranches. The Placing was conducted by
Allenby Capital Limited ("Allenby Capital").
Transaction Highlights
-- The Placing Shares have been placed with existing and new
institutional and other investors, including existing shareholders,
certain Directors and family of the Directors.
-- Directors and family of the Directors have subscribed for GBP750,000.
-- Of the funds raised, GBP4,102,630 is conditional, inter alia,
on the approval of shareholders, at a general meeting of the
Company to be held at 10:00 a.m on 25 June 2018 (the "GM" or
"General Meeting"), of a resolution (the "Resolution") to provide
authority to the Directors to allot new ordinary shares otherwise
than on a pre-emptive basis, further details of which are set out
below.
-- The Placing Shares will represent approximately 39 per cent
of the issued share capital of the Company as enlarged by the issue
of the Placing Shares.
-- The net proceeds of the Placing, which will be approximately
GBP5.45 million, will be used to resource larger infrastructure
contracts, to further strengthen the commercial team, to open up
the Blackbird platform via API interfaces, enhance the value of the
Company's IP portfolio and strengthen the Company's balance
sheet.
Commenting on the placing, Ian McDonough, CEO of Forbidden
Technologies plc said: "I am delighted to announce a very
successful fundraising which will significantly strengthen the
Company's balance sheet. We are now well placed to pursue the
realisation of the full value of Blackbird. This funding comes on
the back of strong growth momentum year to date. Our sales growth
for the period to the end of April 2018 is up 80% vs. the same
period in 2017, with more than half of the new invoiced sales
coming from infrastructure contracts."
A circular (the "Circular"), containing information in relation
to the Placing and a notice convening the General Meeting, is
expected to be sent to shareholders today. The General Meeting will
be held at 10.00 a.m. on 25 June 2018 at Tuition House, 27-37 St.
George's Road, Wimbledon, London SW19 4EU. The Circular will also
shortly be posted on the Company's website:
www.forbidden.co.uk.
Further details of the Placing are set out below.
Enquiries:
Forbidden Technologies plc
Ian McDonough, CEO
Jonathan Lees, Finance Director
Tel: +44 (0)20 8879 7245
Allenby Capital Limited (Nominated Adviser and Broker)
Nick Naylor
John Depasquale
Nicholas Chambers
Tel: +44 (0)20 3328 5656
About Forbidden Technologies plc:
Forbidden Technologies plc (AIM: FBT, www.forbidden.co.uk)
floated in February 2000. Forbidden develops, markets and licenses
a powerful cloud video platform using our patented Blackbird
technology. The technology underpins multiple applications which
are used by rights holders, broadcasters, sports and news video
specialists, post-production houses, other mass market digital
video channels, and corporations.
The Blackbird technology allows full visibility on
multi-location digital content, improves time to market for live
content such as video clips and highlights for social media
distribution, and results in much more effective monetisation.
To find out more about Blackbird Forte and Blackbird Ascent
contact commercial@blackbird.video or visit www.blackbird.video
Blackbird(R) is a registered trademark of Forbidden Technologies
plc
Further details of the Placing
The information contained below has been extracted from, and
should be read in conjunction with, the Circular. Terms defined in
the Circular shall have the same meanings where used in this
announcement.
1. Introduction
The Company has conditionally raised GBP5.75 million (before
expenses) by way of the Placing of 115,000,000 new Ordinary Shares
at the Placing Price in two tranches: the First Placing Shares and
the Second Placing Shares.
The placing of the Second Placing Shares is conditional, inter
alia, upon Shareholders passing the Resolution at the General
Meeting. The Directors intend to vote in favour of the Resolution
in respect of their own beneficial holdings in the Company which
amount in aggregate to 65,814,290 Ordinary Shares and represent
approximately 36.46 per cent. of the Company's Existing Ordinary
Shares.
The Directors believe that the Placing is the most appropriate
way to raise additional funds for Forbidden. The Directors consider
that the Placing provides greater certainty than other available
means of raising additional funds in a timely fashion and minimises
transactional costs.
2. Current trading and prospects
Ian McDonough joined the Company as CEO on 1 September 2017. Ian
has strengthened the team against a much more intensively targeted
sales strategy focused against the Company's real market strengths
in live and remote applications. The team now includes experienced
sales resources based in the USA and Europe, and experienced senior
marketing and product management heads.
The Company's strategic focus is to sell Blackbird(R) solutions
as part of the core media infrastructure requirements of the
companies in its targeted market segments. The Board believes
Blackbird is the only codec in the world that has been specifically
designed for manipulating video in the cloud. Consequently, it has
some very significant points of difference from the competition and
advantages for potential customers. The strategy is to sell
Blackbird in a SaaS model, with recurring revenues, against
specific key verticals where Forbidden can add real value to its
customers' media solutions. The Company will also be exploring
other technology licensing and strategic partnering opportunities
which the Board believes will enhance the value of Blackbird.
Forbidden's recurring revenue from infrastructure sales has
increased from 28% of invoiced sales reported in 2016 to over 50%
in the period to 30 April 2018.
The current financial year has started strongly. As announced at
the AGM on 30 April 2018, first quarter invoiced sales were showing
a high double-digit growth versus last year. This growth has
continued and management accounts up to 30 April 2018 show an 80%
year on year growth for invoiced sales with North American sales up
150%, live sport up 100% and broadcast post production up 28%.
There was also a 35% growth in deferred income at 30 April 2018
versus the year-end.
The Board is confident that the business is now well placed, and
has the right leadership and team, to make real progress in
realising full value from the Blackbird technology and
platform.
3. Details of the Placing and use of proceeds
Under the Placing, the Company has conditionally raised GBP5.75
million (before expenses) through a placing of 115,000,000 Ordinary
Shares at 5 pence per share with institutional and other investors
including the Investing Directors. The Company has entered into a
Placing Agreement with Allenby Capital under which Allenby Capital
has agreed to use its reasonable endeavours to procure Placees for
the Placing Shares at the Placing Price. The Placing has not been
underwritten. The net proceeds of the Placing, which will be
approximately GBP5.45 million, will be used to resource larger
infrastructure projects, strengthen the commercial team to
accelerate growth, open up the Blackbird platform via API
interfaces, enhance the value of the Company's IP portfolio and
strengthen the Company's balance sheet.
The Placing Shares will represent approximately 39 per cent. of
the Enlarged Share Capital. The Placing Price represents a discount
of approximately 7.41 per cent. to the closing mid-market price on
AIM of 5.4 pence per Existing Ordinary Share on 1 June 2018, being
the last dealing day prior to publication of this document.
The Company currently has limited authority to issue new
Ordinary Shares for cash on a non-pre-emptive basis. Accordingly,
the Placing is being conducted in two tranches.
The first tranche of the Placing, to raise a total of
GBP1,647,370 by the issue of 32,947,400 Ordinary Shares (being the
First Placing Shares) at 5 pence each, has been carried out within
the Company's existing share allotment authorities. Application has
been made for the First Placing Shares to be admitted to trading on
AIM and it is expected that their admission to AIM will take place
on 7 June 2018. The allotment of the First Placing Shares is
conditional, inter alia, upon First Admission and the Placing
Agreement becoming unconditional in respect of the First Placing
Shares and not being terminated in accordance with its terms prior
to First Admission.
The second tranche of the Placing, to raise a total GBP4,102,630
by the issue of 82,052,600 Ordinary Shares (being the Second
Placing Shares) at 5 pence each, is conditional upon, inter alia,
the passing of the resolution to be put to shareholders of the
Company at the General Meeting (granting the Directors authority to
allot new Ordinary Shares otherwise than on a pre-emptive basis).
In addition, the allotment of the Second Placing Shares is
conditional, inter alia, on the Placing Agreement becoming
unconditional in respect of the Second Placing Shares and not being
terminated in accordance with its terms prior to Second Admission.
It is expected that Second Admission will take place on 26 June
2018.
The Placing Agreement contains, inter alia, customary
undertakings and warranties given by the Company in favour of
Allenby Capital as to the accuracy of information contained in this
document and other matters relating to the Company. Allenby Capital
may terminate the Placing Agreement in specified circumstances
prior to Admission, including, inter alia, for material breach of
the Placing Agreement or any other warranties contained in it and
in the event of certain force majeure events occurring.
The Placing Agreement is conditional so far as concerns the
Second Placing upon, inter alia, Shareholders passing the
Resolution at the General Meeting and Second Admission occurring by
not later than 8.00 a.m. on 26 June 2018 (or such later time and/or
date as the Company and Allenby Capital may agree, not being later
than 8.00 a.m. on 10 July 2018). If such condition is not satisfied
or, if applicable, waived, the Second Placing will not proceed.
The Placing Shares will be issued credited as fully paid and
will rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive dividends and other
distributions declared on or after the date on which they are
issued.
It is expected that CREST accounts will be credited on the
relevant day of Admission and that share certificates (where
applicable) will be despatched within 10 working days of
Admission.
4. Related party transactions
Miton Group plc ("Miton"), which currently owns 26,927,128
Ordinary Shares representing 14.92 per cent. of the Company's
issued share capital at the date of this Circular, has agreed to
subscribe for 30,839,600 Second Placing Shares as part of the
second tranche of the Placing. As a substantial shareholder of the
Company, Miton is to be treated as a 'related party' in accordance
with the AIM Rules and its participation is a related party
transaction pursuant to Rule 13 of the AIM Rules. The Independent
Directors (being the Directors not participating in the Placing),
having consulted with Allenby Capital, consider the participation
of Miton in the Placing to be fair and reasonable insofar as
Shareholders are concerned.
The following Directors have agreed to subscribe for a total of
15,000,000 Second Placing Shares as part of the second tranche of
the Placing:
At the date of this No. of Second Following Second Admission
Circular Placing Shares
---------------------------- --------------- ------------------------------
Investing Number Percentage Number of Percentage
Director of Ordinary of Existing Ordinary of Enlarged
Shares Ordinary Shares held Share Capital
held Shares
David Main* 535,714 0.30 500,000 1,035,714 0.35
Ian McDonough
* 1,262,862 0.70 14,000,000 15,262,862 5.17
Stephen Streater 63,985,714 35.45 500,000 64,485,714 21.82
*Including family interests
As directors of the Company, the Investing Directors are each to
be treated as a 'related party' in accordance with the AIM Rules.
Accordingly, the participation of the Investing Directors in the
Placing is a related party transaction pursuant to Rule 13 of the
AIM Rules. The Independent Directors of the Company, having
consulted with Allenby Capital, consider the participation of the
Investing Directors in the Placing to be fair and reasonable
insofar as Shareholders are concerned.
5. Application for Admission to AIM
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is anticipated
that Admission will become effective and that dealings in the First
Placing Shares will commence at 8:00 a.m. on 7 June 2018 and that
Admission will become effective and dealings in the Second Placing
Shares will commence at 8:00 a.m. on 26 June 2018.
6. Recommendation
The Board considers the Placing to be in the best interests of
the Company and its Shareholders as a whole and therefore the
Directors unanimously recommend that Shareholders vote in favour of
the Resolution to be proposed at the General Meeting, as they
intend to do in respect of their aggregate holding of 65,814,290
Existing Ordinary Shares, representing approximately 36.46 per
cent. of the Company's existing share capital.
Total Voting Rights
On First Admission, the Company will have 213,433,599 ordinary
shares of 0.8p each in issue, each with one voting right. There are
no shares held in treasury. Therefore, the Company's total number
of ordinary shares and voting rights on First Admission will be
213,433,599.
The above figure of 213,433,599 may be used by shareholders
following First Admission as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
On Second Admission, the Company will have 295,486,199 ordinary
shares of 0.8p each in issue, each with one voting right. There are
no shares held in treasury. Therefore, the Company's total number
of ordinary shares and voting rights on Second Admission will be
295,486,199.
The above figure of 295,486,199 may be used by shareholders
following Second Admission as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
MAR
The Market Abuse Regulations (EU) No. 596/2014 (MAR) became
effective from 3 July 2016. Market soundings, as defined in MAR,
were taken in respect of the Placing with the result that certain
persons became aware of inside information, as permitted by MAR.
That inside information is set out in this announcement and has
been disclosed as soon as possible in accordance with paragraph 7
of article 17 of MAR. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
inside information relating to the Company and its securities.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the
"Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
investors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
Placing Shares offer no guaranteed income and no capital
protection; and an investment in Placing Shares is compatible only
with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, only investors who have met the criteria
of professional clients and eligible counterparties have been
procured. For the avoidance of doubt, the Target Market Assessment
does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
Placing Shares.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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