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
publication of this announcement, this inside information is now
considered to be in the public domain.
GoTech Group plc / Index: AIM / Epic:
GOT.L / Sector: Software
20 December 2017
GoTech Group
plc
(“GoTech”, the
“Company” or the “Group”)
Board Changes, AIM
Rule 15 Cash Shell and Issue of Equity
GoTech announces that Gail Ganney
and Richard Thompson have resigned
from the board and Marcus Yeoman has
been appointed to the board as a non-executive director, all with
immediate effect. In addition, the Company has today become an AIM
Rule 15 cash shell and will seek to complete a suitable reverse
takeover within the next six months. To enable the Company to
explore new corporate opportunities and to provide additional
working capital, the Company is also pleased to announce that it
has raised £400,000 (before expenses) through a placing,
conditional on the shares being admitted to trading on
AIM.
Highlights:
- Placing to raise £400,000 (before expenses), conditional on the
shares being admitted to trading on AIM
- Placing net proceeds to be used to explore corporate
opportunities and for working capital purposes
- Appointment of Marcus Yeoman as
a non-executive director
Board Changes
GoTech announces that Managing Director, Gail Ganney, has given notice of her resignation
as a director with immediate effect to pursue other interests. She
has, however, agreed to provide assistance as required in relation
to the management of Sportsdata until 31
December 2018. She will not receive any remuneration in
relation to this assistance but will be reimbursed for expenses
that she incurs, provided that such expenses have been agreed in
advance by the board of GoTech. In addition, Richard Thompson, non-executive director, has
given notice of his resignation as a director with immediate effect
to dedicate more time to other business interests.
As a result of the Placing (as defined below), Gail Ganney’s and
Richard Thompson’s shareholdings of 19,849,354 shares and
21,041,763 shares respectively will not change but their percentage
holdings will be diluted from 14.67 per cent. and 15.55 per cent.
to 8.44 per cent and 8.94 per cent respectively.
The Board would like to take this opportunity to thank
Gail Ganney and Richard Thompson for their contribution and wish
them well in their future endeavours.
Further, GoTech is pleased to announce that Marcus Yeoman will re-join the board, having
previously stepped down on 18 January
2017, and has been appointed as a non-executive director of
the Company with immediate effect.
Marcus Yeoman
(Non-Executive Director), is a non-executive director of
reach4entertainment Enterprises plc and a previous non-executive
director of GoTech. He is a non-executive director of a number of
private companies which have engaged him principally to assist them
with their growth strategies. His early career started with the
formation of three companies in IT infrastructure and distribution,
after which he moved into small company broking and corporate work
with Rathbone Stockbrokers Limited and Cheviot Capital (Nominees)
Limited. In 2003, Marcus established Springtime Consultants Ltd and
has been acting as a consultant or non-executive director to a
number of listed companies and SME ventures.
Further details in relation to Marcus
Yeoman are set out below.
AIM Rule 15 Cash Shell
The core focus of the business since admission to trading on AIM
on 24 May 2016 has been, through the
Company’s 100 per cent. owned subsidiary Sportsdata Limited
(“Sportsdata”), on Skills2Achieve (‘S2A’), a digital, physical
literacy assessment programme for the UK school market, which was
developed with the Youth Sport Trust (‘YST’), a leading charity for
sports-driven and educational programmes. As announced in the
Company’s September 2016 final
results and the March 2017
half-yearly results, sales of S2A have remained at a low level,
resulting in a loss in both of those accounting periods.
Following a sales review which concluded that the Company’s
focus should be on its sponsorship programme, the Champions
Programme, which enables philanthropic organisations, corporate
sponsors (as part of their CSR activities) and High Net Worth
Individuals (‘HNWIs’) to acquire packages of S2A licences for the
benefit of clusters of primary schools of their choice, the
business secured sales to the Saracens Sport Foundation, the
charitable arm of Saracens F.C., Haileybury School and various
HNWIs. However, further meaningful sales have not materialised and,
accordingly, following Gail Ganney’s departure the board has
decided that no further speculative funding will be allocated to
Sportsdata and S2A and no replacement executive appointment will be
sought. The Group will, however, allocate such funds as may be
required to ensure that Sportsdata complies with its obligations
under the collaboration agreement with YST.
Accordingly, as a consequence of these actions, the Company will
cease to conduct substantially all of its existing trading business
and activities and it is therefore deemed under the AIM Rules for
Companies that GoTech has become an AIM Rule 15 cash shell with
effect from today.
As an AIM Rule 15 cash shell, the Company will be required to
make an acquisition or acquisitions which constitute a reverse
takeover under AIM Rule 14 (including seeking re-admission as an
investing company (as defined under the AIM Rules)) on or before
the date falling six months from this announcement or be
re-admitted to trading on AIM as an investing company under the AIM
Rules (which requires the raising of at least £6 million) failing
which, the Company's ordinary shares would then be suspended from
trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM
would be cancelled six months from the date of suspension should
the reason for the suspension not have been rectified.
The Board is keen to consider all possible opportunities, both
organic and acquisitive, which may drive an increase in shareholder
value.
Related Party Transaction
The work being undertaken by the board to identify and negotiate
potential corporate opportunities will inevitably involve
significant time and engagement from the Company's non-executive
directors. In particular the Company expects to fully utilise
the experience of Marcus Yeoman in
this endeavour.
Accordingly, the Company is today entering into a consultancy
agreement (the "Agreement") with Springtime Consultants Limited
("Springtime"), a company in which Marcus
Yeoman is a director and shareholder, under which the
Company has agreed to pay Springtime a fee of £1,000 per month,
payable monthly in arrears. The consultancy services will include:
(i) attempting to identify prospective suitable reverse takeover
targets; (ii) assessing the best way to fund and structure any
proposed transaction; and (iii) general corporate finance advice as
requested by the board from time to time.
These services are above and beyond Mr Yeoman’s role as a
non-executive director of the Company, for which he will be paid a
further £6,000 per annum.
The entering into the Agreement constitutes a related party
transaction pursuant to rule 13 of the AIM Rules for
Companies. Mike Caine and
Rupert Horner, being the independent
directors for the purpose of this transaction, having consulted
with the Company's nominated adviser, Allenby Capital Limited,
consider that the terms of the Agreement are fair and reasonable
insofar as the Company's shareholders are concerned.
Placing
The Company is pleased to announce that it has raised £400,000,
before expenses, through a placing, conditional on the shares being
admitted to trading on AIM (the “Placing”) of 100,000,000 ordinary
shares of 0.1 pence each in the
capital of the Company (the “Placing Shares”) at a price of
0.4 pence per Placing Share (the
“Placing Price”), which represents a discount of 71 per cent. to
the closing price of 1.38 pence per
ordinary share on 19 December 2017
(being the latest practicable date before this announcement).
The Placing has been conducted within the Company’s existing
share authorities and is conditional, inter alia, on
admission of the Placing Shares to trading on AIM. The Placing
Shares will rank pari passu with the existing issued
ordinary shares of 0.1 pence in the
capital of the Company (“Ordinary Shares”).
The Company intends to use the proceeds of the Placing to fund
the exploration of corporate opportunities and for working capital
generally.
Company’s resultant cash position
As at 30 November 2017, the
Company had unaudited cash and cash equivalents of £224,000. With
no expected cashflow generation from the Sportsdata business but
with a continuing limited commitment to its commercial obligations,
the Company will have no operating cashflow and will be dependent
on its cash resources and the net proceeds of the Placing for its
working capital requirements.
The Company has taken the necessary steps to run the Group in a
prudent way to preserve value for shareholders including reducing
the cost base of the Group where appropriate. The Company expects
its monthly outgoings as a cash shell to be approximately £17,000,
not including any funds required to investigate possible
acquisition or investment opportunities.
Admission and total voting rights
Application has been made to the London Stock Exchange for the
100,000,000 new Ordinary Shares issued pursuant to the Placing to
be admitted to trading on AIM (“Admission”). It is expected
that Admission will become effective on or around 3 January 2018.
Following the issue of the new Ordinary Shares, and for the
purposes of the Disclosure Guidance and Transparency Rules, the
Company's total issued share capital on Admission will consist of
235,304,535 Ordinary Shares.
The above figure may be used by shareholders 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 Disclosure Guidance and Transparency
Rules.
**ENDS**
For further information, please visit www.gotechgroup-plc.com or
contact:
Rupert Horner |
GoTech Group plc |
Tel: +44 (0) 787 257 1312 |
|
|
|
Virginia Bull
James Reeve
Liz Kirchner |
Allenby Capital
Limited |
Tel: +44 (0) 20 3 328 5656 |
|
|
|
Duncan Vasey
Lucy Williams |
Peterhouse Corporate
Finance |
Tel: +44 (0) 20 7220 9797 |
Regulatory disclosures
Under Schedule 2, paragraph (g) of the AIM Rules, the following
information is disclosed:
Marcus Yeoman, aged 54, owns
809,106 Ordinary Shares, equivalent to 0.60 per cent. of the
Company’s issued share capital as at the date of this announcement,
of which 800,000 Ordinary Shares are held through a Self-Invested
Personal Pension via Hargreaves Lansdown and 9,106 Ordinary Shares
are held in his own name.
Mr Yeoman is, or has been during the last five years, a director
or partner of the following companies and/or partnerships:
Current
directorships/partnerships |
Past
directorships/partnerships |
ALTFI Limited
Amigo Distributers Ltd
Dewynters Limited
Go Little Birdee Limited
Newman Displays Limited
One Line Films Limited
Peter Nicholson Films Limited
Reach4creative Limited
Reach4digital Limited
R4e Limited
Reach4entertainment Enterprises plc
Reach4entertainment Ltd
Reach4events Limited
Reach4sponsorship Limited
Reach4talent Limited
Springtime Consultants Limited
Storyboard Assets Plc
Windhorse Aerospace Limited |
1Spatial plc
CC123 Limited
Concha plc
Crumpet Cashmere Limited
Enables IT Group Limited
Frontier IP Group plc
GoTech Group plc
Guscio 2 Limited
Metal Pig Limited
Milamber Ventures plc
RMR Design Associates Limited |
- A receiver was appointed to Powamatique Limited on 25 June 2009 while Mr Yeoman was acting as a
director of the company
- Mr Yeoman was a director of Diamond Lifestyle Holdings plc at
the time of its being would up by voluntary creditors’ liquidation
on 22 July 2008
- Mr Yeoman was a director of Westgolf (UK) Limited until
30 November 2002. Westgolf (UK)
Limited was placed into liquidation on 23
June 2003 with an estimated deficiency to creditors of
£938,267
Mr Yeoman has confirmed that there is no additional information
to be disclosed in accordance with Schedule 2, paragraph (g) of the
AIM rules.