TIDMLVCG
RNS Number : 3348X
Live Company Group PLC
04 May 2021
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL.
4 May 2021
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
Proposed acquisition and conditional placing
Notice of General Meeting
Total Voting Rights
Live Company Group plc (AIM: LVCG) (the "Company") announces
that it has subscribed for a non-controlling stake in Start Art
Global Ltd ("Start Art") an online art and digital art sales and
news platform to be funded out of a proposed placing ("Fundraise")
(" together the Transaction").
Highlights
-- Subscription for a minority interest 16.3% of issued share
capital in Start Art (a Related Party Transaction under the AIM
Rules) with an option to increase to 20% based on an agreed
valuation formula within the next 6 months ("Acquisition").
-- Start Art is building an online art sales platform with
several potential revenue streams including potential for non-
fungible tokens ("NFT's")
-- Start Art will include K-Pop stars as featured artists
selling Limited Editions and Art- merchandise
-- Aggregate consideration for the Acquisition is GBP1,000,000 to be satisfied in cash
-- Placing of new Ordinary Shares of 1p each at a price of 5.0p
per share to raise gross proceeds of GBP1.0 million for the
Acquisition and GBP 500,000 (gross) for working capital for the
existing Brick and Sports business
-- Issue of the previously agreed deferred consideration shares
(to a value of GBP550,000 at a price of 10p per share) post
acquision of new sports division LCSE
-- The Acquisition and the Fundraise are conditional upon, inter
alia, the passing of resolutions to be put to shareholders of the
Company at a general meeting of the Company to be held on 21 May
2021 ("GM")
David Ciclitira, Chairman of LVCG said : "We have spent the past
year of lockdown both restructuring our existing business,
launching a new sports and entertainment division and exploring
opportunities in complementary businesses less affected by Covid.
Today marks an acquisition in a very exciting space which
encompasses both celebrity art and the world of NFTs.
In addition, the last few months have seen a resurgence of
opportunities in our existing business which has meant that we will
look to recommence our Bricklive build programme to keep up with
demand in the UK, USA and China while of course maintaining our
strategy of only building when this demand dictates. The raising of
additional working capital and introduction of institutional
clients into the register will leave the Company in a stronger
position. I remain absolutely committed to the Group and excited
for the future of our core BrickLive business, recently established
sports and entertainment division and this new on-line art
investment. "
Start Art
Start Art is a UK private company limited by shares that
includes a curated online art-sales platform (due to launch at the
end of June, 2021) and an art news service due to before the end of
2021.
The concept of Start Art was launched by David Ciclitira in 2020
as part of the Global Eye Programme and was given further impetus
by the financing, strategic vision and knowledge of the Asian art
market by Ranjit Murugason, the deputy chairman of Start Art. Start
Art is managed by managing director, Nicola Gross, and supported by
Daniel Sumner, chief technology Officer. Prior to the Acquisition
David Cicilitira (Chairman of LVCG) owns 75% of the shares in Start
Art with the remaining 25% of the shares held by Ranjit Murugason
(a non-executive director of LVCG). 12% of the shares is due to be
allocated post Transaction from shares held by David Ciclitira to
key management personnel including Daniel Sumner, Nicola Gross and
members of the Curator team.
Start Art currently has fifty artists signed up and will soft
launch in June, 2021 with "go live" date and revenue generation
commencing in from Q3, 2021. It is intended to have 100 artists
signed up by the "go live" date.
Start Art will contract with three K-Pop artists with
significant social media and fan following to sell their art and
limited edition prints on the "go live" date. There will also be a
line of merchandise featuring the K-Pop artists' works. These will
be available for sale on the platform from date of launch. (see
below under Further Information on Start Art for background to
K-Pop)
The injection of cash by the Company into Start Art provides the
capital required for the development of the existing platform, its
expansion and to allow for client relationship management ("CRM")
integration, live and pre-recorded TV and News, the addition of
virtual reality features, a crypto payment gateway (to allow
payment of products using virtual currencies) and NFT capabilities
as well as other technology-based expansions.
Start Art also intends to help artists mint their own non
fungible tokens ("NFTs",a non-fungible token is a unique unit of
data stored on a blockchain) working with a third-party system -
OpenSea. Once Start Art has completed the minting process, the NFT
will be available to purchase on the platform. This service is
anticipated to be available from Q3 of 2021.
Start Art, which was incorporated in early 2021, (although the
concept was developed through 2020) is at the pre-revenue stage and
has yet to prepare any accounts. For the purposes of the
Subscription, it is warranting as at 31 March 2021 net assets of
GBP1,464,161 including cash of GBP260,736.
Terms of the Acquisition
The Company has agreed, subject to the passing of the
Resolutions at the forthcoming General Meeting, to subscribe for an
initial 16.3% of the issued share capital of Start Art at a cost of
GBP1,000,000 with the option to increase its shareholding in the
Company to 20% within six months. The Company has also received an
undertaking that should Start Art seek additional funds from a
third party within 6 months Start Art shall take such steps as may
reasonably be required to ensure that the Company's shareholding
shall not be diluted below 12%. Additionally, the Company will be
party to the Shareholder Agreement which provides standard
protections such as pre-emption and "drag and tag" on sale.
The Conditional Placing
To provide funding for the completion of the Acquisition and
additional working capital for the growth of the Group post
lock-down , the Company has raised GBP1.5 million (before expenses)
by way of a placing of 30,000,000 new Ordinary Shares of 1p each
("Placing Shares") through Monecor (London) Limited trading as ETX
Capital ("Monecor") at a placing price of 5.0p per share (the
"Placing Price") (the "Placing"). The Placing Price represents a
discount of circa 14.0% to the closing price per Ordinary Share of
5.80p on AIM on 30 April 2021.
The Company has entered into a placing agreement dated 30 April
2021 (the "Placing Agreement") with Monecor pursuant to which they,
as agents for the Company, have procured placees for the Placing
Shares at the Placing Price.
The obligations of Monecor under the Placing Agreement are
conditional, inter alia, upon the approval of shareholders at a GM
dated 21 May 2021 and the admission of the Placing Shares having
occurred by 8.00 a.m. on 24 May 2021 (or such later time and/or
date as may be agreed, being no later than 8.00 a.m. on 24 May
2021), and there being no material breach of the warranties given
to prior to admission of the Placing Shares.
Monecor may terminate the Placing Agreement in specified
circumstances (including for breach of warranty at any time prior
to admission of the Placing Shares, if such breach is reasonably
considered by Monecor to be material in the context of the Placing)
and in the event of a force majeure event occurring at any time
prior to admission of the Placing Shares. If the conditions of the
Placing Agreement are not fulfilled on or before the relevant date
in the Placing Agreement, placing monies will be returned to
placees without interest as soon as possible thereafter. If the
Placing Agreement is terminated, the Acquisition will not take
place.
Warrants
The Company will issue broker warrants in the Placing, of 5% of
the total amount of the Fundraise (the "Broker Warrants"). As a
result, 1,500,00 Broker Warrants will be issued to Monecor pursuant
to the Placing and subject to approval of the necessary authorities
at the Company General Meeting ("GM") which will be scheduled for
21 May 2021 (details of which are to be announced).
Each Warrant will provide the holder the right to one new
Ordinary Share on its exercise. The Warrants will be exercisable at
a price of 5.0p for a two-year period from the date of the GM,
subject to any extension in accordance with the Warrant instrument.
If exercised in full, the Warrants would result in the issue of a
further 1,500,000 new Ordinary Shares.
Related Party Transaction
David Ciclitira is a Director of the Company and a substantial
shareholder, together with Maria Serena Papi (Serenella Ciclitira)
holding 31.00% of the Company's issued share capital. Ranjit
Murugason is also a Director of the Company. Accordingly, they are
defined as Related Parties under the AIM Rules for Companies (the
"AIM Rules").
The Acquisition of the 16.3% shareholding, in Start Art where
David Ciclitira is currently a 75% shareholder and Ranjit Murugason
is a 25% shareholder, is therefore classified as a Related Party
Transaction pursuant to Rule 13 of the AIM Rules. The Director of
the Company, other than David Ciclitira, and Maria Serena Papi and
Ranjit Murugason, being Bryan Lawrie, ("Independent Director")
considers, having consulted with the Company's Nominated Adviser,
Beaumont Cornish Limited, that the terms of the Transaction are
fair and reasonable insofar as the Company's Shareholders are
concerned.
In forming his view, the Independent Director has taken into
account an independent valuation of the interest being acquired by
the Company which has indicated a value range in excess of the
consideration being paid. He has also taken into account the
desirability of adding a further revenue stream to the Company's
existing business.
The Independent Director also considered that :
-- the planned exposure to online art sales, news channel, K-Pop
artists, merchandising and digital art and shared infrastructure
complements the existing business
-- the platform could allow opportunities for the BrickLive
division to further market their art-related consumer sets or art
linked corporate sales
In considering these facts and after careful deliberation the
Independent Director concluded that the Acquisition is beneficial
to the Company and that the consideration being lower than the
independent valuation range offers value to Shareholders.
Board Changes
The Company intends to appoint a further Non-executive director
by 30 June 2021 and is currently reviewing potential candidates to
increase the independence and diversity of the existing board. The
Company also intends to conduct a full board review with the
intention of making further changes during the latter half of
2021.
David Cicilitira will remain Chairman of the Company and
continue to work as per his contract for LVCG. Ranjit Murugason
continues as a Non-executive Director with Bryan Lawrie and
Serenella Ciclitira the remaining members of the board.
Issue of deferred consideration, Rule 9 and Concert Party
Further to the announcement on 3 December 2020, 5,500,000 new
ordinary shares of 1p each being issued as deferred consideration
shares ("Deferred Shares") consisting of 2,000,000 for David
Ciclitira, 2,000,000 for Bruce Parker-Forsyth and 1,500,000 for
Anders Gronburg will be issued at an issue price of 10p at the same
time as the Transaction. The Deferred Shares are subject to a 12
month lock in.
As a result of the Transaction and post Admission previously
established Concert Party consisting of David Ciclitira (together
with Serenella Ciclitira, a non - executive director in the Company
), Bruce Parker-Forsyth and Anders Gronburg will hold 28.13% as set
out below:
Number of % of Number of new Number of Ordinary % of then
Ordinary issued Ordinary Shares Shares on admission issued
Shares currently share to be issued share capital
held capital on admission
pre-Admission
David
Ciclitira 34,084,874 31.00 2,000,000 36,084,874 24.71
------------------ --------------- ----------------- --------------------- ---------------
Bruce
Parker
-Forsyth 1,500,000 1.36 2,000,000 3,500,000 2.40
------------------ --------------- ----------------- --------------------- ---------------
Anders
Gronburg 0 0.00 1,500,000 1,500,000 1.02
------------------ --------------- ----------------- --------------------- ---------------
Issue of Fee Shares
The Company will also issue 500,000 new Ordinary Shares of 1p
each for payment of professional services amounting to GBP25,000 at
the Placing Price ("Fee Shares").
AIM Application and Total Voting Rights
The Placing Shares, Deferred Shares and Fee Shares amounting in
aggregate to 36,000,000 new ordinary shares of 1p each ("New
Shares") will, when issued, be credited as fully paid and will rank
pari passu in all respects with the existing Ordinary Shares,
including the right to receive all dividends or other distributions
made, paid or declared in respect of such shares after the date of
issue.
The issuance of the New Shares is conditional upon, inter alia,
the passing of resolutions to be put to shareholders of the Company
at the GM to be held on 21 May 2021 ("the GM") to provide authority
to the Directors to issue and allot the required shares on a
non-pre-emptive basis. A circular, containing a notice of the GM,
will be posted to shareholders shortly.
Conditional on the passing of the resolutions at the GM,
application will be made for the New Shares to be admitted to
trading on AIM and it is expected that their admission to AIM will
take place on or around 24 May 2021. ("Admission").
Following Admission, the enlarged issued share capital of the
Company will comprise 146,001,763 ordinary shares of 1p each
("Ordinary Shares"). Each Ordinary Share has one voting right. No
Ordinary Shares are held in treasury. The above figure may be used
by LVCG shareholders as the denominator for the calculation 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 FCA's Disclosure Guidance and Transparency Rules.
Post GM approval of the issuance of new shares the directors
will have the following interest in the Company.
Number of % of Number of Ordinary % of then
Ordinary issued Shares on admission issued
Shares currently share share capital
held capital
pre-Admission
David Ciclitira
* 34,084,874 31.00 36,084,874 24.71
------------------ --------------- --------------------- ---------------
Ranjit Murugason 1,320,317 1.2 1,320,317 0.91
------------------ --------------- --------------------- ---------------
Bryan Lawrie 90,384 0.08 90,384 0.06
------------------ --------------- --------------------- ---------------
Beaumont Cornish Limited ("Beaumont Cornish"), which is
authorised and regulated in the United Kingdom by the FCA, is
acting as Nominated Adviser ("Nomad") to the Company in connection
with the matters contained in this announcement, and will not be
acting for any other person or otherwise be responsible to any
person for providing the protections afforded to clients of
Beaumont Cornish or for advising any other person in respect of the
matters set out in this announcement or any transaction, matter or
arrangement referred to in this announcement. Beaumont Cornish's
responsibilities as the Company's Nomad are owed solely to London
Stock Exchange and are not owed to the Company or to any Director
or to any other person in respect of his or her decision to acquire
any shares in the Company.
A full presentation will be available on
www.livecompanygroup.com in due course.
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
Sarah Ullman , Chief Operating Officer
Beaumont Cornish Limited (Nominated Adviser) Tel: 020 7628 3396
Roland Cornish/Rosalind Hill Abrahams
Monecor (London) Limited (Broker) Tel: 020 7392 1436
Elliot Hance
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014. as it
forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR").
LIVE COMPANY GROUP
Live Company Group plc ("LVCG", the "Company" or the "Group") is
a live events and entertainment company, founded by David Ciclitira
in December 2017. The Company was admitted to trading on AIM in
December 2017, following the reverse acquisition of Brick Live
Group and Parallel Live Group by LVCG.
The Group is a network of partner-driven fan-based shows using
BRICKLIVE created content worldwide. The Company owns the rights to
BRICKLIVE - an interactive experience built around the creative
ethos of the world's most popular construction toy bricks.
BRICKLIVE, which is fast becoming a leading children's education
and entertainment brand, actively encourages all to learn, build
and play, and provides inspirational events and shows where
like-minded fans can push the boundaries of their creativity.
Bright Bricks is the Group's production centre for building
brick-based models. The Group is an independent producer of
BRICKLIVE and is not associated with the LEGO Group. The Company
also manages a number of sports, entertainment and lifestyle events
via its recently created LCSE (Live Company Sports and
Entertainment) division.
Website: www.livecompanygroup.com .
FURTHER INFORMATION ON START ART
START.art is intended to be a one-stop destination for artists,
galleries and collectors worldwide with a unique news function,
providing an online e-commerce platform that offers curated works,
both physical and digital, for sale by emerging and featured
artists from around the world.
Created by the founder of the Global Eye Programme, START Art
hopes to become one of the world's most followed online art
platforms upon launch in June 2021. Several revenue streams and
activities are planned including:
- Online sales of emerging artists including those from the Global Eye Programme
- Exclusive edition partnerships with K-pop musicians who are
also artists for artworks and merchandise
- Featured Artists Editions
- Sales of artworks at fairs (allowing on-line viewing)
- NFTs, digital art and Crypto payment system
- START.tv launching 2022 will cover reviews of gallery
exhibition openings, artist interviews and gallery reviews from
around the world, initially updated weekly and eventually daily
- Advertising
The Global Art Market
The global art market is worth approximately $50 Billion with
online sales starting to make up a larger Digital Art Sales make up
a percentage of these sales and Digital Art Sales starting to
emerge as one of the fastest growing sectors. Covid 19
significantly impacted physical art galleries in 2020 with many
posting 40+% losses in sales but art buyers may still want to
acquire new artworks and are starting to move their purchasing
power online. While Art Fair sales have been dramatically reduced
due to the inability to host live events, travel restrictions etc.,
the new NFT Marketplaces (marketplaces are the online platforms on
which you can buy and sell NFTs) are exploding in popularity.
K-Pop
K-pop is a genre of South Korean popular music. Although the
term includes music of a variety of stylistic origins, it is often
associated with so-called K-pop idols. Idols are usually young
individuals, who are known for being good-looking, fashionable,
highly trained in singing and dancing, as well as having an almost
perfect image. The most successful groups are often signed under
South Koreas biggest agencies, where they undertake strict training
before they make their debut. The K-pop entertainment company with
the highest sales revenue in 2018 was SM Entertainment, who manage
multiple successful idols, for example the boyband EXO.
K-pop is constantly growing
Korean pop idols started to become famous in Asian countries in
2003. Singer BoA and boyband TVXQ became the first K-pop idols to
successfully break into the Japanese market. With the support of
the South Korean government, who saw the industries economic
potential, the so-called Korean wave started to spread even
further, and K-pop gained a global audience. Girlband Blackpink was
the first K-pop band to headline the famous U.S. music festival
Coachella in 2019. Nevertheless, with both nationwide and global
success, the seven-member boyband BTS is the biggest active boyband
in South Korea currently. In December 2018, it was estimated that
the band generates around four trillion South Korean won as
economic value to the country per year.
Source: Statista
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