Big Sofa Technologies Group PLC Capital Raising & Notice of GM (4726C)

TIDMBST

RNS Number : 4726C

Big Sofa Technologies Group PLC

01 October 2018

1 October 2018

Big Sofa Technologies Group plc

("Big Sofa" or the "Company")

Capital Raising to Raise Approximately GBP1.68 million

and

Notice of General Meeting

Big Sofa (AIM:BST), a fast-growing international video analytics provider to the consumer insight industry, announces subscriptions for new ordinary shares of 3 pence each in the share capital of the Company at an issue price of 3 pence per new Ordinary Share to raise, in aggregate, approximately GBP1.68 million before expenses.

Summary of the Capital Raising

-- The Company has raised approximately GBP1.68 million (before expenses) by way of the Subscription with new and existing investors and current and former directors at the Issue Price

-- Novum Securities Limited has subscribed for 33,333,333 new Ordinary Shares at the Issue Price on behalf of itself and its clients

-- Ipsos, an existing Shareholder, as well as certain Directors and a former director, who are all Related Parties of the Company, have agreed to subscribe for 22,818,401 new Ordinary Shares at the Issue Price

-- Proceeds of the Capital Raising will be used to fund the expected working capital requirements of the Company for the next twelve months as it enters the next phase of growth, enabling Big Sofa to capitalise on its market leading position in technology-led consumer insight. The Related Party Subscription is conditional on Shareholder approval at a General Meeting

Background to and reasons for the Capital Raising

Big Sofa's aim is to become a transformative resource within large, global organisations, which are spending significant sums on consumer insight, through the use of video and video analytics. The consumer insight market is a large and growing US$40 billion industry going through a significant period of transition, as businesses and brands are interested in real behaviour, not attitudes, with video emerging as the key medium to capture this behaviour. The Directors believe that Big Sofa's observational research expertise, combined with its video analytics technology, puts the Company in a good position to capitalise on this trend.

Since the Company's admission to the AIM market of the London Stock Exchange in December 2016, its strategy has been to focus on building long-term strategic relationships with global consumer brands and consumer insight businesses such as Procter & Gamble and Ipsos. The Directors believe that this strategy has the potential to deliver long-term recurring revenues.

The Company's growth has led to it absorbing cash which will continue for a number of months; the Subscription is necessary to sustain the business and support the growth strategy. The Board has agreed to a number of significant cost-cutting measures to bring the Company to cash breakeven sooner without affecting its ability to deliver anticipated revenues.

Use of proceeds

The proceeds of the Capital Raising will be used to fund the working capital requirements of the Company, through to the end of the summer 2019, as it enters the next phase of growth. Specifically, proceeds will be used to continue investment in research and development, artificial intelligence and automation to ensure Big Sofa maintains its market leading position in technology-led consumer insight. The Directors believe that heightened levels of automation will, in time, also enable the transition away from human-led analysis tools, resulting in higher margins for commissioned projects. In addition, further investment will be made in expanding the Company's sales and marketing activities, with a particular focus on Big Sofa's US presence, where its strategically located hubs are exposed to good revenue growth opportunities.

Details of the Subscriptions

The Company has conditionally raised approximately GBP1.68 million before expenses by separate subscriptions for, in aggregate, 56,151,734 new Ordinary Shares at the Issue Price.

Novum Securites has subscribed for 33,333,333 new Ordinary Shares conditional only upon First Admission. Under the terms of its subscription new Ordinary Shares issued to Novum will be admitted to trading on 15 October 2018.

The Novum Subscription is not subject to Shareholder approval. The net proceeds of the Novum Subscription are expected to be GBP924,009. Upon First Admission, Novum will be granted a warrant in respect of 2,444,118 Ordinary Shares exercisable at the Issue Price until October 2021. Novum has today been appointed as joint broker to the Company.

Ipsos has conditionally subscribed for 11,151,735 new Ordinary Shares. Under the terms of its subscription letter, Ipsos' subscription is conditional on the passing of the Resolutions as well as the Admission of the Subscription Shares. The new Ordinary Shares issued to Ipsos are expected to be admitted to trading on AIM on 19 October 2018. If any of the conditions are not satisfied, these new Ordinary Shares will not be issued.

Nick Mustoe, Kirsty Fuller, and Steve Metcalfe who are directors, and Adam Reynolds who is a former director, have conditionally subscribed for a total of 11,666,666 new Ordinary Shares. Under the terms of their subscription letters, their subscription is conditional on the passing of the Resolutions as well as the Admission of the Subscription Shares. The new Ordinary Shares issued to them are expected to be admitted to trading on AIM on 19 October 2018. If any of the conditions are not satisfied, these new Ordinary Shares will not be issued.

The Subscriptions are not being underwritten.

The Subscription Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Applications will be made to the London Stock Exchange for the admission of the Subscription Shares to trading on AIM.

Related Party Transactions

Subscription by the Directors and the Former Director

The following directors of the Company, all of whom are related parties for the purposes of the AIM Rules for Companies (the "AIM Rules") have subscribed for Ordinary Shares as follows:

 
 Director              Number of Subscription             Total Ordinary    Ordinary Share 
                            Shares subscribed    Shares held immediately      holding as a 
                                          for              following the     percentage of 
                                                         Capital Raising    enlarged share 
                                                                                   capital 
 Nick Mustoe                        3,333,333                  6,108,449              4.4% 
                      -----------------------  -------------------------  ---------------- 
 Steve Metcalfe                     3,333,333                  4,722,070              3.4% 
                      -----------------------  -------------------------  ---------------- 
 Kirsty Fuller                      2,500,000                  2,500,000              1.8% 
                      -----------------------  -------------------------  ---------------- 
 Adam Reynolds 
  (former Director)                 2,500,000                  3,930,403              2.8% 
                      -----------------------  -------------------------  ---------------- 
 

The above Subscriptions are each related party transactions for the purposes of Rule 13 of the AIM Rules (the "Director Related Party Transactions").

Simon Lidington, Matt Lynch, Joe MacCarthy, John Haworth and Paul Clark being the Directors not participating in the Related Party Subscription, consider, having consulted with the Company's Nominated Adviser, Arden Partners, that the terms of the Director Related Party Transactions are fair and reasonable in so far as the Company's shareholders are concerned.

Major shareholder's participation in the Capital Raising

Ipsos, which at the date of this Announcement holds 16,402,143 Existing Ordinary Shares (representing approximately 19.86 per cent. of the existing issued share capital of the Company), has conditionally agreed to subscribe pursuant to the Subscription for 11,151,735 new Ordinary Shares at the Issue Price.

This subscription is deemed to be a related party transaction for the purposes of Rule 13 of the AIM Rules (the "Ipsos Related Party Transaction").

The Independent Directors (comprising all directors other than John Haworth who is the nominated representative of Ipsos) consider, having consulted with the Company's Nominated Adviser, Arden Partners, that the terms of the Ipsos Related Party Transaction are fair and reasonable in so far as the Company's shareholders are concerned.

Following its subscription for new Ordinary Shares, Ipsos will hold 19.86 per cent. of the Enlarged Share Capital. In the event that Ipsos' conditional subscription does not proceed for any reason the Ordinary Shares held by Ipsos will represent, in aggregate, approximately 12.85 per cent. of the Enlarged Share Capital.

Circular and Notice of General Meeting

The Company expects to publish the Circular tomorrow in connection with the Capital Raising, which will contain a notice convening the General Meeting at which Shareholders will be asked to consider and, if thought fit, approve the Resolutions. The Circular will be posted to Shareholders tomorrow and a copy will be made available on the Company's website www.bigsofatech.com.

The General Meeting is expected to be convened for 9.00 a.m. on 18 October 2018 and will take place at the offices of the Company at Martin House, 5 Martin Lane, London EC4R 0DP. The actions that Shareholders should take to vote on the Resolutions will be set out in the Circular, along with the recommendation of the Directors.

Shareholders should be aware that if the Resolutions are not approved at the General Meeting, the Subscription by the related parties will not proceed. The Subscription by Novum will provide the Company with funding until late spring. If Second Admission does not occur then the Company will not receive the relevant net proceeds in respect of the related parties and the Company may not be able to finance all the activities referred to in this announcement.

Expected timetable of principal events

 
                                                                    2018 
 Announcement of the Capital Raising                           1 October 
 Publication of the Circular and Form of Proxy                 2 October 
 First Admission and commencement of dealings    8.00 a.m. on 15 October 
  on AIM 
 General Meeting                                 9.00 a.m. on 18 October 
 Results of the General Meeting announced                     18 October 
 Second Admission and commencement of dealings   8.00 a.m. on 19 October 
  on AIM 
 Despatch of definitive share certificates            within 10 business 
  in certificated form                             days of each of First 
                                                    Admission and Second 
                                                               Admission 
 

Capitalised terms used but not defined in this Announcement shall have the meanings given to such terms in the section headed "Definitions" at the end of this Announcement.

Enquiries:

 
 Big Sofa Technologies Group plc          via Vigo Communications 
 Simon Lidington, CEO 
 Matt Lynch, CSO 
 Joe MacCarthy, CFO 
 
 Arden Partners plc (Nominated Adviser 
  and Joint Broker)                       [phone] 
 Paul Shackleton / Ben Cryer 
 
 Novum Securities (Joint Broker)          [phone] 
 Colin Rowbury 
 
 Vigo Communications (Financial Public 
  Relations)                              [phone] 
 Ben Simons / Jeremy Garcia / Antonia 
  Pollock 
 

About Big Sofa Technologies Group plc

Big Sofa is a B2B technology business providing the marketing and consumer insight industries with video observation and analytics services, as video emerges as a key platform in a massive US$40 billion consumer research market.

Our software platform collates, analyses and organises large volumes of raw/unstructured video enabling our clients, which include leading market research organisations and major household brands, to perform detailed and sophisticated consumer insight analysis; and make genuine use of video content.

Big Sofa deploys three product solutions: Video Observer, which captures and analyses real-time behaviour using fixed and wearable cameras in-home or in-store; Video Manager, which enables clients to upload, store and manage video using Big Sofa's analytics platform; and Video Stories, which enables clients to collect video embedded in consumer insight surveys.

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

DEFINITIONS

In this Announcement, the following words and expressions shall, unless the context provides otherwise, have the following meanings:

 
 "Act"                          the Companies Act 2006, as amended 
 "Admission"                    admission to trading on AIM becoming effective in 
                                 accordance with Rule 6 of the AIM Rules in respect 
                                 of the relevant New Ordinary Shares 
 "AIM"                          the AIM Market operated by the London Stock Exchange 
 "AIM Rules"                    the AIM Rules for Companies published by the London 
                                 Stock Exchange as amended from time to time 
 "Announcement"                 this announcement 
 "Arden"                        Arden Partners PLC, the Company's nominated adviser 
                                 and broker 
 "Business Day"                 any day which is not a Saturday, Sunday or a public 
                                 holiday in the UK 
 "Capital Raising"               the Subscription 
 "certificated form"            an Ordinary Share recorded on a company's share 
  or "in certificated            register as being held in certificated form (namely, 
  form"                          not in CREST) 
 "Circular"                     the circular to be sent to Shareholders setting 
                                 out the details of the proposed Subscription and 
                                 the Notice of General Meeting 
 "Company" or "Big              Big Sofa Technologies Group plc, a company incorporated 
  Sofa"                          in England and Wales under the Act with registered 
                                 number 07847321 
 "CREST"                        the relevant system (as defined in the CREST Regulations) 
                                 in respect of which Euroclear UK & Ireland Limited 
                                 is the operator (as defined in those regulations) 
 "CREST Regulations"            the Uncertificated Securities Regulations 2001 (S.I. 
                                 2001 No. 3755), as amended 
 "Directors" or "Board"         the directors of the Company 
  "Enlarged Share                the issued ordinary share capital of the Company 
  Capital"                       as enlarged by the issue of the, the Subscription 
                                 Shares 
 "Existing Ordinary             the 82,598,958 existing Ordinary Shares in issue 
  Shares"                        at the date of this Announcement, all of which are 
                                 admitted to trading on AIM 
 "FCA"                          the Financial Conduct Authority of the UK 
 "First Admission"              admission to trading on AIM becoming effective in 
                                 accordance with Rule 6 of the AIM Rules in respect 
                                 of the Novum Subscription 
 "Form of Proxy"                the form of proxy to accompany the Circular for 
                                 use by holders of Existing Ordinary Shares in relation 
                                 to the General Meeting 
 "FSMA"                         the Financial Services and Markets Act 2000, as 
                                 amended 
 "General Meeting"              the general meeting of the Company to be held at 
                                 the offices of the Company at Martin House, 5 Martin 
                                 Lane, London EC4R 0DP at 9 a.m. on 18 October 2018 
 "Group"                        the Company, its subsidiaries and its subsidiary 
                                 undertakings 
 "Ipsos"                        Ipsos MORI UK Limited, a UK subsidiary of Ipsos 
                                 S.A. 
 "Issue Price"                  3 pence per new Ordinary Share 
 "London Stock Exchange"        London Stock Exchange plc 
 "MAR"                          the EU Market Abuse Regulation (596/2014/EU) 
 "New Ordinary Shares"          the Subscription Shares 
 "Notice of General             the notice convening the General Meeting which will 
  Meeting"                       be set out in the Circular 
 "Novum"                        Novum Securities Limited 
 "Novum Subscription"           the subscription by Novum for 33,333,333 new Ordinary 
                                 Shares at the Issue Price 
 "Ordinary Shares"              as applicable, ordinary shares in the capital of 
                                 the Company of 3 pence each 
 
 
 "Regulatory Information        a service approved by the FCA for the distribution 
  Service"                       to the public of regulatory announcements and included 
                                 within the list maintained on the FCA's website 
 "Related Parties"              Ipsos, a holder of Existing Ordinary Shares, Adam 
                                 Reynolds and certain of the Directors who propose 
                                 to subscribe for new Ordinary Shares pursuant to 
                                 the Subscription 
 "Related Party Subscription"   the conditional subscription for 22,818,401 new 
                                 Ordinary Shares at the Issue Price by the Related 
                                 Parties 
 "Resolutions"                  the resolutions relating to matters necessary to 
                                 implement the Related Party Subscription which will 
                                 be set out in the Notice of General Meeting and 
                                 proposed at the General Meeting 
 "Second Admission"             admission to trading on AIM becoming effective in 
                                 accordance with Rule 6 of the AIM Rules in respect 
                                 of the Related Party Subscription 
 "Shareholders"                 holders of Existing Ordinary Shares 
 "Subscribers"                  Novum and the Related Parties 
 "Subscription"                 the proposed conditional subscriptions by the Subscribers 
                                 for the Subscription Shares at the Issue Price proposed 
                                 to be made on the terms and subject to the conditions 
                                 set out in the Subscription Letters 
 "Subscription Letters"         the conditional letter agreements proposed to be 
                                 entered into between the Company and each of the 
                                 Subscribers relating to the Subscription 
 "Subscription Shares"          the 56,151,734 new Ordinary Shares to be issued 
                                 pursuant to the Subscription 
 "uncertificated"               an Ordinary Share recorded on a company's share 
  or "in uncertificated          register as being held in uncertificated form in 
  form"                          CREST and title to which, by virtue of the CREST 

                                 Regulations, may be transferred by means of CREST 
 "GBP", "pounds sterling",      are references to the lawful currency of the United 
  "pence" or "p"                 Kingdom 
 

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 [e-mail] or visit www.rns.com.

END

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October 01, 2018 02:34 ET (06:34 GMT)