TIDMBIRD
RNS Number : 0717V
Blackbird PLC
29 November 2019
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"). Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
29 November 2019
Blackbird plc
("Blackbird" or the "Company")
Placing to raise approximately GBP5.54 million
and
Notice of General Meeting
Blackbird plc (AIM: BIRD), developer and seller of the patented
market-leading cloud video editing platform Blackbird, is pleased
to announce an oversubscribed placing of 39,552,893 new ordinary
shares of 0.8 pence each in the Company ("Placing Shares") at a
price of 14 pence per share (the "Placing Price") to raise
approximately GBP5.54 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 investors, including existing shareholders, certain
Directors and family of the Directors.
-- Directors and family of the Directors have agreed to
subscribe for approximately GBP0.43 million in the second tranche
of the Placing.
-- Of the funds raised, approximately GBP1.49 million 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 16
December 2019 (the "GM") 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 11.80 per
cent. of the issued share capital of the Company as enlarged by the
issue of the Placing Shares.
-- The estimated net proceeds of the Placing, which will be
GBP5.22 million, will be used by the Company to:
o increase marketing expenditure in the U.S. and grow the
Company's presence there on the back of recent contract wins;
o bolster the team in the following areas: U.S. Sales,
Operations, Support and R&D;
o continue to develop the Company's product offering and
maintain a competitive advantage; and
o strengthen the Company's balance sheet, facilitating
longer-term deals with new customers.
-- The Directors believe that the Placing will significantly
enhance the ability of the Company to deliver on its strategic
plan.
Ian McDonough, Chief Executive Officer of Blackbird, said:
"These are very exciting times for Blackbird as we gain serious
traction with some of the world's largest and most high-profile
content producers. Our US focus is really bearing fruit as
demonstrated by the longer term deals at the US Department of State
and the recent announcement of our integration across the global
Bloomberg operation. We hope this will continue to blossom as our
OEM strategy really takes off. Early signs with IMG, Deltatre and
particularly TownNews show that they can scale up very quickly.
"The raising of funds is primarily to strengthen our balance
sheet as we enter into larger and longer contracts with bigger
companies. In addition, we want to build on the momentum to raise
our profile in the US market, to strengthen the team in key pinch
points across the organisation including US sales, operational
delivery, support and an additional head in the development
team."
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 16 December 2019 at Tuition House, 27-37
St. George's Road, London SW19 4EU. The Circular will also shortly
be posted on the Company's website: www.blackbird.video.
Contacts
Blackbird plc Tel: +44 (0)20
8879 7245
Ian McDonough, Chief Executive Officer
Adrian Lambert, Marketing Director
Allenby Capital Limited (Nominated Adviser Tel: +44 (0)20
and Broker) 3328 5656
Nick Naylor
Nicholas Chambers
About Blackbird plc
Blackbird operates in the fast-growing SaaS and cloud video
market and has created the world's most advanced suite of
cloud-native computing applications for video, all underpinned by
its lightning-fast codec. Blackbird's patented technology allows
for frame accurate navigation, playback, viewing and editing in the
cloud. Blackbird underpins multiple applications, which are used by
rights holders, broadcasters, sports and news video specialists,
esports, live events and content owners, post-production houses,
other mass market digital video channels and corporations.
Since it is cloud-native, Blackbird removes the need for costly,
high end workstations and can be used from almost anywhere on
almost any device. It also 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
ultimately results in much more effective monetisation.
Blackbird(R) is a registered trademark of Blackbird plc.
Websites
www.blackbird.video
Social media
www.linkedin.com/company/blackbird-cloud
www.twitter.com/blackbirdcloud
www.facebook.com/blackbirdplc
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.
Introduction
The Company announced earlier today a proposed placing to raise
approximately GBP5.54 million (before expenses) through the issue
of 39,552,893 new Ordinary Shares at the Placing Price in two
tranches: the First Placing Shares and the Second Placing
Shares.
The allotment of the Second Placing Shares is conditional, inter
alia, upon the passing of the Resolution to be proposed at the
General Meeting to provide sufficient authority to enable the
allotment of the Second Placing Shares and disapply statutory
pre-emption rights which would otherwise apply to the allotment of
the Second Placing Shares. Notice of the General Meeting, at which
the Resolution will be proposed, is set out at the end of this
document.
This document also contains the Directors' recommendation that
Shareholders vote in favour of the Resolution. The Directors intend
to vote in favour of the Resolution in respect of their own
beneficial holdings in the Company (including in the case of the
Investing Directors their respective family interests) which amount
in aggregate to 85,634,224 Ordinary Shares and represent
approximately 28.96 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 Blackbird. 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.
The Placing Shares to be issued pursuant to the Placing are to
be admitted to trading on AIM, which, in the case of the First
Placing Shares, is expected to take place on 4 December 2019 and,
in the case of the Second Placing Shares and assuming that the
Resolution is passed at the General Meeting, is expected to take
place on 18 December 2019.
Business overview
Blackbird operates in the fast-growing SaaS and cloud video
market. It has created an advanced suite of cloud-native computing
applications for video, all underpinned by its lightning-fast
codec. The Company's patented technology allows for frame accurate
navigation, playback, viewing, editing and publishing in the cloud.
Blackbird's target audience is the news and sports sectors.
Since it is cloud-native, Blackbird removes the need for costly,
high end workstations and can be used from almost anywhere on
almost any device. It also allows full visibility of multi-location
digital content, improves time to market for live content such as
video clips and highlights for social media distribution, and
ultimately results in much more effective monetisation.
Current trading and prospects
Revenue increased by 27 per cent. to GBP0.48 million for the
six-month period ended 30 June 2019 compared to the corresponding
period last year. Deferred revenue and contracted order book were
GBP1.21 million at 30 June 2019, an increase of 86 per cent.
compared to 30 June 2018 and of 113 per cent. compared to 31
December 2018.
In North America, revenue for the six-month period ended 30 June
2019 increased by 152 per cent. year on year to GBP0.16 million
whilst revenue for the period from the sports sector increased by
64 per cent. year on year to GBP0.20 million reflecting the
Company's strategic focus on the sector.
Operating costs for the period were GBP1.42 million versus
GBP1.29 million in the corresponding period last year, net of
capitalised development costs of GBP0.20 million (2018: GBP0.11
million). The increase in costs has been driven through the
strengthening of the Company's staffing resources. The EBITDA loss
for the period was GBP1.02 million versus GBP0.97 million in the
corresponding period last year, whereas the loss for the period was
GBP1.19 million versus GBP1.27 million due to a lower amortisation
charge compared to the prior period.
Cash used in operations in the period was GBP1.04 million versus
GBP0.90 million in the same period last year.
Financial and commercial outlook
Blackbird started the second half of the year in a strong
position with contracted orders and deferred revenue at the highest
level in the Company's history at GBP1.21 million compared with
GBP0.57 million at 31 December 2018. This includes the new
multi-year deals with A+E Networks, which started post the period
end, and the extensions with TownNews and IMG.
At the end of September 2019, Blackbird was chosen by the U.S.
Department of State for video production, including the publishing
of fast turnaround digital news to its own and other online news
outlets. The contract awarded to Aperture Solutions Group,
Blackbird's U.S. partner, was for one year with multi-year
extension options. The contract value is a six-figure U.S. dollar
amount each year of the contract.
Recognition of Blackbird continues to grow. Blackbird exhibited
at the Google Cloud Partner Pavilion during the IBC conference, one
of the world's leading media, entertainment and technology shows,
in Amsterdam in September 2019. At this show Blackbird won a "What
caught my eye" award which was only presented to six of the
seventeen hundred exhibitors. In partnership with IMG, Blackbird
was also nominated for a "Best in fan engagement" award at the
Sports OTT summit in Madrid in November 2019 for its work on the
Open Golf Championship.
On 26 November 2019, Blackbird signed a multi-year deal with
Bloomberg Media. Bloomberg Media, a leading multi-platform global
business and financial media company, will utilise Blackbird for
simple, fast, collaborative video editing and publishing from the
cloud. Annual revenues from this deal will be significant for
Blackbird. After closing this deal, Blackbird's contracted order
book and deferred revenue stands at GBP2.01 million, a record level
for the Company and three and a half times larger than at 31
December 2018.
Blackbird has a track record of landing and expanding with
customers post contract wins. TownNews is on its fourth deployment
of Blackbird in the last 18 months, and, by the end of the year,
will be in forty-five local news stations compared to three in the
summer of 2018. IMG, a leading global producer and distributor of
sports media had already expanded before a new agreement earlier
this year which was the first multi-year deal and for increased
annual fees. Peloton, the Global fitness provider, started using
Blackbird to edit its on-demand virtual classes in one studio in
early 2019 and is now in four studios and a fifth one is planned.
The Company is confident that, as Blackbird is deployed, this land
and expand trend will continue with its recent contract wins.
Blackbird's commercial team continue to i) directly sell
Blackbird as a key infrastructure component in the technology stack
of major media and entertainment businesses and ii) pursue deals
with Original Equipment Manufacturers ("OEMs"), where Blackbird is
sold as part of an end-to end solution to the OEMs' customers. The
Company has a strong pipeline with multiple ongoing discussions
with large companies around the globe in these areas. As cloud
adoption becomes more prevalent, with its strong Blackbird platform
offering and with the right commercial team in place, the Company
is well positioned to exploit this.
Reasons for the Placing and use of proceeds
Pursuant to the Placing, the Company will receive gross proceeds
of approximately GBP5.54 million. The net proceeds from the
Placing, which will be approximately GBP5.22 million, will be used
by the Company to:
-- increase marketing expenditure in the U.S. and grow the
Company's presence there on the back of recent contract wins;
-- bolster the team in the following areas: U.S. Sales, Operations, Support and R&D;
-- continue to develop the Company's product offering and
maintain a competitive advantage; and
-- strengthen the Company's balance sheet, facilitating
longer-term deals with new customers.
The Directors believe that the net proceeds of the Placing will
significantly enhance the ability of the Company to deliver on its
strategic plan.
Details of the Placing and Admission
Under the Placing, the Company has conditionally raised
approximately GBP5.54 million (before expenses) through a placing
of 39,552,893 new Ordinary Shares at 14 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 Placing Shares will represent approximately 11.80 per cent.
of the Enlarged Share Capital. The Placing Price represents a
discount of approximately 21.13 per cent. to the closing mid-market
price on AIM of 17.75 pence per Existing Ordinary Share on 27
November 2019, 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
GBP4,051,253.64 by the issue of 28,937,526 Ordinary Shares (being
the First Placing Shares) at the Placing Price, 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 admission (First
Admission) will take place on 4 December 2019. 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
GBP1,486,151.38 by the issue of 10,615,367 Ordinary Shares (being
the Second Placing Shares) at the Placing Price, 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 the Second Placing 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 18 December 2019.
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
First Placing upon, inter alia, First Admission occurring by not
later than 8.00 a.m. on 4 December 2019 (or such later time and/or
date as the Company and Allenby Capital may agree, not being later
than 8.00 a.m. on 18 December 2019). If such condition is not
satisfied or, if applicable, waived, the First Placing will not
proceed. The First Placing is not conditional upon the Second
Placing proceeding.
The Placing Agreement is conditional so far as concerns the
Second Placing upon, inter alia, Second Admission occurring by not
later than 8.00 a.m. on 18 December 2019 (or such later time and/or
date as the Company and Allenby Capital may agree, not being later
than 8.00 a.m. on 2 January 2020). 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 dispatched within 10 working days of each
Admission.
Related Party Transactions
Premier Miton Group plc ("Premier Miton"), which currently owns
57,766,728 Ordinary Shares representing 19.54 per cent. of the
Company's issued share capital at the date of this Circular, has
agreed to subscribe 5,000,000 Second Placing Shares as part of the
second tranche of the Placing. As a substantial shareholder of the
Company, Premier 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
Directors of the Company, having consulted with Allenby Capital,
consider the terms of Premier Miton's participation in the Placing
to be fair and reasonable insofar as Shareholders are
concerned.
The following Directors have agreed to subscribe for Second
Placing Shares as part of the second tranche of the Placing:
At the date of this Following Second
Circular Admission
Number of Percentage No. of Number of Percentage
Ordinary of Existing Second Ordinary of Enlarged
Shares Ordinary Placing Shares Share
Investing Director held Shares Shares held Capital
Ian McDonough* 20,082,796 6.79% 2,670,008 22,752,804 6.79%
Stephen White - - 214,286 214,286 0.06%
Andrew Bentley 30,000 0.01% 71,429 71,429 0.03%
David Main* 1,035,714 0.35% 71,429 607,143 0.33%
Dawn Airey - - 71,429 71,429 0.02%
*and 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 Director, having consulted with Allenby
Capital, considers the terms of the participation of the Investing
Directors in the Placing to be fair and reasonable insofar as
Shareholders are concerned.
Application for Admission
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is anticipated
that such admission will become effective and that dealings in the
First Placing Shares will commence at 8.00 a.m. on 4 December 2019
and that admission will become effective and dealings in the Second
Placing Shares will commence at 8.00 a.m. on 18 December 2019.
General Meeting
The notice convening the General Meeting to be held at Tuition
House, 27-37 St. George's Road, London SW19 4EU at 10.00 a.m. on 16
December 2019 is set out at the end of this document. At the
General Meeting, Shareholders will consider a resolution, to be
passed as a special resolution, to authorise the directors to allot
the Second Placing Shares and disapply Shareholders' statutory
pre-emption rights which would otherwise apply to the allotment of
the Second Placing Shares.
The Resolution, if passed, would also authorise the directors to
allot Ordinary Shares free of shareholders' pre-emption rights up
to an additional nominal value of GBP236,549 (representing 10 per
cent. of the Company's issued share capital as at today's date) to
maintain the level of the Directors' authority to allot Ordinary
Shares other than on a pre-emptive basis granted at the Company's
annual general meeting held earlier this year.
Action to be taken by Shareholders
You can submit your proxy electronically through the website of
the Company's registrars, Link Asset Services, at
www.signalshares.com. The electronic submission of proxy must be
received at least 48 hours before the time of the General Meeting.
To vote online you will need to log in to your share portal account
or register for the share portal if you have not already done so
and you will require your investor code. Once registered, you will
be able to vote immediately. Voting by proxy prior to the General
Meeting does not affect your right to attend the General Meeting
and vote in person should you so wish. Further information
regarding the appointment of proxies and online voting can be found
in the notes to the Notice of General Meeting.
Instructions for voting by proxy through CREST are set out in
paragraph 10 of the notes to the Notice of General Meeting.
In the case of non-registered Shareholders who receive these
materials through their broker or other intermediary, the
Shareholder should complete and send a letter of direction in
accordance with the instructions provided by their broker or other
intermediary.
In order for the Second Placing to proceed, Shareholders will
need to approve the Resolution set out in the Notice of General
Meeting. If the Resolution is not passed at the General Meeting,
the Second Placing will not proceed in the form currently
envisaged, with the result that the anticipated net proceeds of the
Placing will be reduced and the Company will be unable to implement
in full the anticipated use of funds set out above.
Directors' Recommendation
The Board of Blackbird 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 as they intend to do in respect of
their own shareholdings (including in the case of the Investing
Directors their respective family interests) of, in aggregate,
85,634,224 Ordinary Shares (representing approximately 28.96 per
cent. per cent. of the Company's existing issued share
capital).
Total Voting Rights
Following First Admission, the Company's enlarged issued share
capital will comprise 324,623,725 Ordinary Shares, with voting
rights. The Company does not hold any Ordinary Shares in treasury.
Therefore, the total number of Ordinary Shares in the Company with
voting rights will be 324,623,725.
Following Second Admission, the Company's enlarged issued share
capital will comprise 335,239,092 Ordinary Shares, with voting
rights. The Company does not hold any Ordinary Shares in treasury.
Therefore, the total number of Ordinary Shares in the Company with
voting rights will be 335,239,092.
These figures may 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.
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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