TIDMBST
RNS Number : 0726P
Big Sofa Technologies Group PLC
25 August 2017
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014. Upon the publication
of this announcement, this inside information is now considered to
be in the public domain.
Big Sofa Technologies Group plc
("Big Sofa" or the "Company")
Conditional Placing, Issue of Equity
&
Notice of General Meeting
Big Sofa (AIM: BST), a fast-growing international video
analytics provider to consumer brands and market research agencies,
announces a conditional placing to raise gross proceeds of GBP1.5
million by the issue and allotment by the Company of 8,108,108 new
Ordinary Shares at the Placing Price of 18.5 pence per share (the
"Placing").
Highlights
-- Net proceeds of approximately GBP1.4 million to provide
additional working capital to service demand from large, global
brand and consumer insight agency clients won since AIM admission
in December 2016
-- Timely raising of the Placing funds will help the Company to
maximise the opportunities presented by its current customer base
which includes Unilever, Procter and Gamble and IPSOS
-- Non-executive directors are contributing GBP210,000 in aggregate to the Placing
-- Non-executive directors to additionally take accrued
directors' fees in Big Sofa shares at the Placing Price and have
agreed to take prospective directors' fees through 31 December 2017
also in Big Sofa shares
Simon Lidington, Chief Executive Officer of Big Sofa,
commented:
"The exceptional progress made in the months since our AIM
admission in securing and developing anchor long-term partnerships
with organisations of the scale and reach of Procter and Gamble,
IPSOS and Unilever is translating into a growing pipeline of new
mandates.
For a company of Big Sofa's size and stage to have established
relationships in such a short space of time with these and other
global giants, including Unilever - each of which has thoroughly
assessed us against other technology providers - is a significant
endorsement of the combined power of our secure, scalable and
user-friendly technology; and of our deep consumer insight
know-how.
Having established these relationships in the first half of the
year, it is essential that Big Sofa remains sufficiently
well-funded to take full advantage of the opportunities they
present, to embed ourselves across their global organisations, and
to cultivate the future revenue streams that we believe will
underpin significant growth - while also working to win the next
wave of high potential clients. I am delighted that investors have
responded rapidly to this opportunity."
Enquiries
Big Sofa Technologies Group via Vigo Communications
plc
Simon Lidington, CEO
Matt Lynch, CSO
Joe MacCarthy, CFO
Vigo Communications (Financial +44 (0) 20 7830
Public Relations) 9700
Ben Simons / Jeremy Garcia
/ Antonia Pollock
+44 (0)20 3368
SPARK Advisory Partners (NOMAD) 3554
Neil Baldwin / Mark Brady
+44 (0) 20 7070
Hobart Capital Markets (Broker) 5656
Lee Richardson / Raju Haldankar
About Big Sofa Technologies Group plc
Big Sofa is a B2B technology business servicing the marketing
and consumer insight industries with video analytics.
Our software platform collates, analyses and organises large
volumes of raw/unstructured video content enabling companies to
perform detailed and sophisticated consumer insight analysis; and
make genuine use of their video content.
Until recently, video has been difficult and expensive to
capture, upload, store, manage and analyse as a consumer insight
tool. However, proliferation of smart phones has empowered
consumers to speak directly to brands resulting in an evolution of
consumer insight and data analytics techniques, with video emerging
as a key platform in a massive $33 billion consumer research
market.
Big Sofa's shares are admitted to trading on the London Stock
Exchange's AIM market under the ticker BST.L.
To find out more, visit www.bigsofatech.com
Follow us on twitter at @bigsofatech
The following is an extract from the Circular mailed to
Shareholders on 25 August 2017
To Shareholders
Placing of 8,108,108 New Ordinary Shares at 18.5 pence per
share; Issue of the Settlement Shares and Notice of General
Meeting
Introduction
The Company has today announced the terms of a placing to raise
GBP1.5 million by the issue and allotment by the Company of
8,108,108 new Ordinary Shares at the Placing Price of 18.5 pence
per share.
The Placing is conditional, inter alia, upon Shareholders
approving the Resolutions at the General Meeting, compliance by the
Company in all material respects with its obligations under the
Placing Agreement and Admission of the Placing Shares to trading on
AIM. The Resolutions are contained in the Notice of General Meeting
at the end of this document.
The purpose of this document is to explain the background to and
reasons for the Placing, why the Directors are seeking authority
from Shareholders to issue the New Ordinary Shares for cash on a
non pre-emptive basis and why the Directors recommend that you vote
in favour of the Resolutions.
Background to and Reasons for the Placing
The Company's strategy is to secure long-term multinational
partnerships with global companies that offer it significant and
sustainable revenue opportunities across their entire global
reach.
Since the Company's admission to AIM in December 2016 it has
moved to a strategy of focussing on building long-term strategic
relationships with global consumer brand and consumer insight
businesses such as Proctor and Gamble and IPSOS. The Directors
believe that the benefit of this strategy is its potential to
deliver long-term, high quality earnings from a relatively small
number of large multinational customers. This focus on these global
giants has meant the business has needed to invest to enable it to
complete the more onerous and time-consuming procurement processes
involving running pilot projects and technology assessments that
companies of this stature demand.
The Directors believe that this strategy will not only deliver
operating break even during the course of the first half of 2018,
but also that, ultimately, the nature of the relationships the
Company is building with these customers as long-term strategic
partners will see its revenue continue and grow in the future.
As such, and given the Board's current assessment of the
opportunities to grow sales with global multinational brand clients
- both existing and those with whom we are in negotiations - and
given the Company's current facilities, the Directors are seeking
to raise further funds at this time. The Directors believe that
this investment will help the Company to maximise the opportunities
presented by its current client base and potential new customers,
and, in addition, extend the global reach of the business to enable
it to better serve and maximise its blue-chip client base.
Placing
Subject to the satisfaction of the conditions under the Placing
Agreement including, inter alia, (in relation to the Placing) the
passing of the Resolutions, the Company will issue in total
8,108,108 new Ordinary Shares which will raise GBP1.5 million,
before expenses, and approximately GBP1.4 million, after the
expenses of the Placing (which are estimated to be GBP87,000
(excluding VAT) in total). The Placing Shares have been
conditionally placed by Hobart Capital Markets LLP, as agent for
the Company, with investors and certain Directors of the
Company.
Application has been made for the New Ordinary Shares to be
admitted to trading on AIM, with dealings expected to commence on
12 September 2017 on the assumption that, inter alia, the
Resolutions are passed at the General Meeting.
The Placing is conditional, amongst other things, upon:
i) the Resolutions to be proposed at the General Meeting being passed without amendment;
ii) compliance by the Company in all material respects with its
obligations under the Placing Agreement; and
iii) admission of the New Ordinary Shares to trading on AIM
becoming effective by not later than 8.00 a.m. on 12 September 2017
(or such later date as is agreed between the Company and Hobart
Capital Markets LLP, being not later than 8.00 am on 19 September
2017).
Assuming the Placing Shares are issued, the Placing Shares will
represent approximately 12.5 per cent. of the Enlarged Share
Capital. The Placing Shares will, following Admission, rank in full
for all dividends and distributions declared, made or paid in
respect of the issued ordinary share capital of the Company after
the date of their issue and will otherwise rank pari passu in all
other respects with the Existing Ordinary Shares. The Placing Price
represents a discount of approximately 10.8 per cent. to the
closing mid-market price of Ordinary Shares (of 20.75 pence) on 24
August 2017 (being the latest practicable date prior to the date of
this document)
Pursuant to the Placing Agreement, Hobart Capital Markets LLP,
as agent for the Company, has agreed to use its reasonable
endeavours to procure subscribers for the Placing Shares at the
Placing Price. The Placing is not underwritten.
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that dealings in the Placing Shares will commence on or about 12
September 2017 subject to the passing of the Resolutions at the
General Meeting.
Related Party Transactions
1. Directors' participation in the Placing
The Company's most recent Annual General Meeting was held on 25
July 2017. Following the release of the AGM statement, the Company
is no longer in a closed period, and therefore its Directors are
permitted to deal in securities of the Company.
Consequently, certain Directors, Adam Reynolds, Steven Metcalfe
(via Stene Investments Limited, a company in which he has an
interest) and Nicholas Mustoe have agreed that they will
participate in the Placing, by subscribing GBP210,000 in aggregate
for 1,135,134 Placing Shares. These Directors are participating on
the same terms as all other placees.
Amount Number of Placing
Shares
------------------ ------------ ------------------
Nicholas Mustoe GBP100,000 540,540
------------------ ------------ ------------------
Adam Reynolds GBP55,000 297,297
------------------ ------------ ------------------
Steven Metcalfe* GBP55,000 297,297
------------------ ------------ ------------------
*via Stene Investments Limited
The participation in the Placing by Adam Reynolds, Steven
Metcalfe and Nicholas Mustoe constitutes a related party
transaction under the AIM Rules for Companies.
Simon Lidington, Matthew Lynch, Paul Clark and Joseph MacCarthy,
none of whom are participating in the Placing, are considered to be
independent directors of the Company for the purposes of AIM Rule
13 in relation to these Directors' participation in the Placing.
Having consulted with the Company's nominated adviser, the
independent directors consider that the terms of the Directors'
participation in the Placing are fair and reasonable insofar as
Shareholders are concerned.
2. Settlement of outstanding and prospective fees to companies in which Directors have interests
A number of companies in which certain Directors have an
interest : Reyco Limited (re Adam Reynolds), Metcalfe Consulting
Limited (re Steven Metcalfe), Tranby Limited (re Paul Clark) and
Kindred Agency Limited (re Nicholas Mustoe) have outstanding
amounts owed by the Company in relation to the provision of
services since April 2017 amounting in aggregate to GBP50,000. Each
of these parties has agreed that these sums may be settled by the
issue of Ordinary Shares at the Placing Price. Details of the
Ordinary Shares to be issued in relation to the outstanding
Directors' fees are set out in the table below:
Accrued No of Ordinary
Directors' Shares
fee
----------------- ------------- ---------------
Nicholas
Mustoe GBP12,500 67,567
----------------- ------------- ---------------
Adam Reynolds GBP12,500 67,567
----------------- ------------- ---------------
Steven Metcalfe GBP12,500 67,567
----------------- ------------- ---------------
Paul Clark GBP12,500 67,567
----------------- ------------- ---------------
Total GBP50,000 270,268
----------------- ------------- ---------------
In addition, each of these companies has agreed that fees for
services to be provided for the period from September 2017 to
December 2017, which will amount in aggregate to GBP40,000 (i.e
GBP10,000 each), may be paid for at the end of the relevant month
by the issue of Ordinary Shares at an issue price (being the
average mid-market closing price of the Company's Ordinary Shares
for the 5 business days prior to the issue of such Ordinary
Shares).
Simon Lidington, Matthew Lynch and Joseph MacCarthy are
considered to be independent directors of the Company for the
purposes of AIM Rule 13 for this settlement of outstanding and
proposed directors fees. Having consulted with the Company's
nominated adviser, the independent directors consider that the
terms of the settlement of directors' fees by the issuance of
Ordinary Shares is fair and reasonable insofar as Shareholders are
concerned.
Application will be made to the London Stock Exchange for the
Settlement Shares relating to the outstanding directors fees to be
admitted to trading on AIM. It is expected that dealings in the
Settlement Shares will commence on or about 12 September 2017
subject to the passing of the Resolutions at the General
Meeting.
3. Broking fee payable to related parties
Directors Adam Reynolds (through Reyco Limited, a company in
which he has an interest) and Steven Metcalfe (through Metcalfe
Consulting Limited) have been instrumental in introducing placees
to the Placing. Their fees for providing this service amounts of
GBP35,800, split equally between them.
Simon Lidington, Matthew Lynch, Joseph MacCarthy, Nicholas
Mustoe and Paul Clark are considered to be independent directors of
the Company for the purposes of AIM Rule 13 in relation to this
broking fee. Having consulted with the Company's nominated adviser,
the independent directors consider that the terms of this broking
fee are fair and reasonable insofar as Shareholders are
concerned.
Total voting rights
Following Admission, the Company's issued share capital will
consist of 65,131,480 Ordinary Shares with each Ordinary Share
carrying the right to one vote. The Company does not hold any
Ordinary Shares in treasury. This figure of 65,131,480 Ordinary
Shares may therefore be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.
General Meeting
A notice convening the General Meeting to be held at the offices
of the Big Sofa Technologies Group plc at 10.00 a.m. on 11
September 2017 at which the Resolutions will be proposed, is set
out at the end of this document.
A summary and explanation of the Resolutions is set out below.
Please note that this is not the full text of the Resolutions and
you should read this section in conjunction with the Resolutions
contained in the Notice of General Meeting at the end of this
document. The following resolutions will be proposed at the General
Meeting.
(A) Resolution 1, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot the Placing
Shares, the Settlement Shares and Prospective Shares up to an
aggregate nominal value of GBP257,134.32
(B) Resolution 2, which will be proposed as a special resolution
and which is subject to the passing of Resolution 1, dis-applies
statutory pre-emption rights, provided that such authority shall be
limited to, inter alia, the allotment of the Placing Shares, the
Settlement Shares, and Ordinary Shares having an aggregate nominal
value of GBP502,871. Following Admission this would leave the
Company with the authority to issue up to around 30% of the
Enlarged Share Capital on a non-pre-emptive basis.
These Resolutions are in addition to the authorities granted to
Directors at the AGM. Resolution 1 authorises the allotment of up
to a maximum aggregate nominal amount of GBP257,134,32 which is
expected to be sufficient to satisfy the allotment of the Placing
Shares, the Settlement Shares and the Prospective Shares.
Resolution 2 authorises the disapplication of statutory pre-emption
rights in respect of the Placing Shares, the Settlement Shares and
to increase the authority to allot Ordinary Shares other than on a
pre-emptive basis over an additional 16,762,366 Ordinary Shares
over the current authority. The purpose of this is to give the
Directors the wherewithal to raise funds up to this limit without
pre-emption, if required, without the requirement to convene a
further general meeting.
As required by the Act when proposing a special resolution to
disapply pre-emption rights, the Directors hereby confirm that:
-- the amount to be paid to the Company in respect of each
Placing Share is 18.5 pence and the proceeds of the Placing (at the
Placing Price) are expected to be GBP1.5 million (before
expenses);
-- the amount to be paid to the Company in respect of each
Settlement Share relating to historic directors' fees is 18.5
pence;
-- the amount to be paid to the Company in respect of each
Prospective Share relating to future directors' fees will be the
average mid-market closing price of the Company's ordinary shares
for the 5 business days prior to the issue of such Ordinary
Shares;
-- the number of new Ordinary Shares to be issued pursuant to
the Placing is 8,108,108 and the number of new Ordinary Shares to
be issued as Settlement Shares is 270,268;
-- the Placing Price represents, in the Board's view, the best
price achievable by the Company given its funding requirements and
the current overall market conditions for fundraisings; and
-- the Directors recommend that Shareholders dis-apply
pre-emption rights (in the terms set out in the second resolution)
in order to permit the Placing to be effected on a timely basis and
to avoid the timetabling, and uncertainty of funding issues
associated with, effecting future pre-emptive offers.
Action to be taken
Whether or not you intend to be present in person at the General
Meeting, you are strongly encouraged to complete, sign and return
your Form of Proxy in accordance with the instructions printed
thereon so as to be received, by post or, during normal business
hours only, by hand, to Capita Asset Services, 34 Beckenham Road,
Beckenham, Kent, BR3 4ZF, as soon as possible but in any event so
as to arrive by not later than 10.00 a.m. on 9 September 2017 (or,
in the case of an adjournment of the General Meeting, not later
than 48 hours before the time fixed for the holding of the
adjourned meeting.)
Appointing a proxy in accordance with the instructions set out
above (and in the Form of Proxy) will enable your vote to be
counted at the General Meeting in the event of your absence. The
completion and return of a Form of Proxy will not preclude you from
attending and voting in person at the General Meeting, or any
adjournment thereof, should you wish to do so.
Recommendation
The Directors consider the Proposals to be in the best interests
of the Company and the Shareholders as a whole and, accordingly,
unanimously recommend that Shareholders vote in favour of the
Resolutions to be proposed at the General Meeting as they intend to
do in respect of their own beneficial holdings amounting, in
aggregate, to 20,848,179 Existing Ordinary Shares, representing
approximately 36.73 per cent. of the Existing Ordinary Shares.
Yours faithfully
Nicholas Mustoe
Chairman
DEFINITIONS
The following words and expressions shall have the following
meanings in this document unless the context otherwise
requires:
"Admission" - the admission to trading on AIM of the New
Ordinary Shares, in accordance with Rule 6 of the AIM Rules
"AGM" - the last annual general meeting of the Company held on
25 July 2017
"AIM" - the AIM market operated by the London Stock Exchange
"AIM Rules" - the rules for AIM companies as published by the
London Stock Exchange from time to time
"Board" or "Directors" - the directors of the Company
"certificated" or "in certificated form" - a share or other security which is not in uncertificated form (that is, not in CREST)
"Company" or "Big Sofa" - Big Sofa Technologies Group plc, a
company registered in England and Wales with registered number
07847321
"CREST" - the computerised settlement system to facilitate
transfer of title to or interests in securities in uncertificated
form operated by Euroclear UK & Ireland Limited
"Enlarged Share Capital" - the entire issued ordinary share
capital of the Company immediately following the allotment of the
Placing Shares and the Settlement Shares.
"Existing Ordinary Shares" - 56,753,104 Ordinary Shares
currently in issue at the date of this Document
"Form of Proxy" - the form of proxy for use at the General
Meeting
"General Meeting" - the general meeting of the Company, notice
of which is set out at the end of this document, and any
adjournment thereof
"Group" - the Company and its subsidiary undertakings
"London Stock Exchange" - London Stock Exchange plc
"New Ordinary Shares" - together the Placing Shares and the
Settlement Shares
"Notice of General Meeting" - the notice of the General Meeting,
which is set out at the end of this document
"Ordinary Shares" - ordinary shares of 3 pence each in the share
capital of the Company
"Placing" - the proposed conditional placing by Hobart Capital
Markets LLP on behalf of the Company of the Placing Shares pursuant
to the terms of the Placing Agreement
"Placing Agreement" - the conditional agreement dated 25 August
2017 between the Company, SPARK Advisory Partners Limited, Hobart
Capital Markets LLP relating to the Placing
"Placing Price" - 18.5 pence per Placing Share
"Placing Shares" - 8,108,108 new Ordinary Shares to be issued by
the Company pursuant to the Placing
"Prospective Shares" - the new Ordinary Shares to be issued in
relation to the settlement of future directors' fees as set out in
the paragraph headed "Settlement of outstanding and prospective
fees to companies in which Directors have interests" on page 6 of
this document
"Registrars" - Capita Asset Services
"Resolutions" - the resolutions to be proposed at the General
Meeting, as set out in the Notice of General Meeting
"Settlement Shares" - the 270,268 shares to be issued in
relation to the settlement of historic directors' fees as set out
in the paragraph headed "Settlement of outstanding and prospective
fees to companies in which Directors have interests" on page 6 of
this document
"Shareholder(s)" - holder(s) of Ordinary Shares
"UK" or "United Kingdom" - the United Kingdom of Great Britain
and Northern Ireland
"uncertificated" or "in uncertified form" - a share or security
recorded in the Company's register of members as being held in
uncertificated form, title to which may be transferred by means of
CREST
"US" or "United States" - the United States of America
This information is provided by RNS
The company news service from the London Stock Exchange
END
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