Big Sofa Technologies Group PLC Share issuance to raise £1,000,000 & Notice of GM (2440S)

TIDMBST

RNS Number : 2440S

Big Sofa Technologies Group PLC

08 March 2019

8 March 2019

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Big Sofa Technologies Group plc

("Big Sofa Technologies" or the "Company")

Share issuance to raise GBP1,000,000

&

Notice of General Meeting

Big Sofa Technologies (AIM:BST), an international video analytics provider to the insight and analytics industries, announces a conditional share issuance to raise GBP1,000,000, further details of which are set out below:

-- Conditional subscriptions to raise GBP880,000 before expenses by the issue and allotment by the Company of 22,000,000 new Ordinary Shares at an issue price of 4 pence per share

o Includes GBP280,000 of conditional subscriptions from Nick Mustoe, Kirsty Fuller and Steven Metcalfe (current Directors of the Company) and Adam Reynolds (a former Director of the Company)

-- Metcalfe Consultancy Limited, which provides the services of Steven Metcalfe to the Company, and Nick Mustoe have agreed that outstanding amounts owed to them by the Company in relation to the provision of non-executive director and consultancy services up to and including the end of September 2019 amounting to, in aggregate, GBP120,000 should be settled by the issue of 3,000,000 new Ordinary Shares at the Issue Price

The Capital Raising and the Settlement Share Issue are conditional upon Shareholders approving the Resolutions at the General Meeting and Admission.

Background to and reasons for the Capital Raising

The Company's aim is to become a transformative resource within large, global organisations, which are spending significant sums on consumer insight and data analytics, through the use of video and video analytics. The Directors believe that the Company's observational research expertise, combined with its video analytics technology, puts the Company in a good position to capitalise on this opportunity. Earlier today, the Company announced its financial results for the financial year ended 31 December 2018, which outlined a strategic roadmap for 2019. This strategy encompasses further strategic integration within a major customer's key service lines; building on the Company's Visual Insight System offering; and developing broader opportunities for automated data extraction. The Capital Raising is necessary to provide additional working capital for the business and support the growth strategy.

Current trading

The Company appointed a new Chief Executive Officer on 7 November 2018, who has undertaken a strategic review and initiated a programme of cost savings. As a result, the Directors expect the Company will be able to realise cost savings across the business in 2019 of approximately GBP1.0 million compared to 2018. The Company has made a positive start to 2019 with revenues and commissions which are expected to be recognised in 2019 exceeding GBP400,000 (as at the date of this announcement), and a good pipeline of prospective commissions. The Directors believe that the Company's strategic roadmap (outlined in the Company's financial results for the financial year ended 31 December 2018 represents a sound strategy for 2019.

Use of proceeds

The proceeds of the Capital Raising will provide additional working capital for the business and support the Company's growth strategy as outlined in its financial results for the financial year ended 31 December 2018.

Details of the Subscription

The Company has conditionally raised GBP880,000 before expenses by separate subscriptions for, in aggregate, 22,000,000 new Ordinary Shares at the Issue Price.

Novum Securities has conditionally subscribed for 15,000,000 new Ordinary Shares. Nick Mustoe and Kirsty Fuller who are Directors, and Adam Reynolds who is a former Director, have conditionally subscribed for, in aggregate, 7,000,000 new Ordinary Shares.

The Subscription is conditional on the passing of the Resolutions as well as the admission of the Subscription Shares to trading on AIM. The Subscription Shares are expected to be admitted to trading on AIM on 5 April 2019. If any of the conditions are not satisfied, the Subscription Shares will not be issued.

The Subscription is 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.

Application will be made to the London Stock Exchange for the admission of the Subscription Shares to trading on AIM. It is expected that dealings in the Subscription Shares will commence on or around 5 April 2019 subject to the passing of the Resolutions at the General Meeting.

Details of the Settlement Share Issue

Metcalfe Consultancy Limited, which provides the services of Steven Metcalfe to the Company, and Nick Mustoe have outstanding amounts owed to them by the Company in relation to the provision of non-executive director and consultancy services up to and including the end of September 2019 amounting to, in aggregate, GBP120,000. Each of Metcalfe Consultancy Limited and Nick Mustoe has agreed that these sums should be settled by the issue of Ordinary Shares at the Issue Price.

The Settlement 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.

Application will be made to the London Stock Exchange for the Settlement Shares to be admitted to trading on AIM. It is expected that dealings in the Settlement Shares will commence on or around 5 April 2019 subject to the passing of the Resolutions at the General Meeting.

Related party transactions

Nick Mustoe, Kirsty Fuller and Steven Metcalfe (being current Directors of the Company) and Adam Reynolds (being a former Director of the Company), all of whom are related parties for the purposes of the AIM Rules, have agreed to subscribe for Ordinary Shares pursuant to the Subscription.

Metcalfe Consultancy Limited, which provides the services of Steven Metcalfe to the Company, and Nick Mustoe have agreed to settle outstanding amounts owed to them by the Company in relation to the provision of non-executive director and consultancy services up to and including the end of September 2019 by the issue of Ordinary Shares at the Issue Price. Steven Metcalfe and Nick Mustoe are each related parties for the purposes of the AIM Rules.

Details of the Subscription Shares and Settlement Shares to be issued to the Related Parties are set out below:

 
 Director                   Number of          Number of Ordinary     Total Ordinary    Ordinary Share 
                          Ordinary Shares         Shares issued         Shares held        holding as 
                            subscribed            in settlement         immediately       a percentage 
                           for pursuant       of accrued Directors'      following        of Enlarged 
                        to the Subscription       fees pursuant         the Capital      Share Capital 
                                                to the Settlement       Raising and       immediately 
                                                   Share Issue         the Settlement      following 
                                                                        Share Issue       the Capital 
                                                                                          Raising and 
                                                                                         the Settlement 
                                                                                          Share Issue 
 Kirsty Fuller              1,250,000                  -                 4,525,702           2.8% 
                      ---------------------  ----------------------  ----------------  ---------------- 
 Nick Mustoe                2,000,000              1,468,750            10,377,199           6.3% 
                      ---------------------  ----------------------  ----------------  ---------------- 
 Steven Metcalfe            2,000,000              1,531,250             9,029,022           5.5% 
                      ---------------------  ----------------------  ----------------  ---------------- 
 Adam Reynolds 
  (former Director)         1,750,000                  -                 5,680,403           3.5% 
                      ---------------------  ----------------------  ----------------  ---------------- 
 Total:                     7,000,000              3,000,000            29,612,326           18.1% 
                      ---------------------  ----------------------  ----------------  ---------------- 
 

The subscriptions set out above are each related party transactions for the purposes of Rule 13 of the AIM Rules ("Subscription Related Party Transactions").

John Haworth, Simon Lidington, Matt Lynch and Joe MacCarthy, being the Directors not participating in the Subscription, are considered to be independent directors of the Company for the purposes of AIM Rule 13 in connection with the Subscription Related Party Transaction. They consider, having consulted with the Company's nominated adviser, Arden, that the terms of the Subscription Related Party Transactions are fair and reasonable insofar as the Shareholders are concerned.

The settlement of accrued Directors' fees by the issue of the Settlement Shares to Metcalfe Consultancy Limited and Nick Mustoe is also a related party transaction for the purposes of Rule 13 of the AIM Rules ("Settlement Related Party Transaction").

Kirsty Fuller, John Haworth, Simon Lidington, Matt Lynch and Joe MacCarthy are considered to be independent directors of the Company for the purposes of AIM Rule 13 in connection with the Settlement Related Party Transaction. They consider, having consulted with the Company's nominated adviser, Arden, that the terms of the Settlement Related Party Transaction are fair and reasonable insofar as Shareholders are concerned.

Total voting rights

Following Admission, the Company's issued share capital will consist of 163,750,692 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 163,750,692 Ordinary Shares may therefore 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 in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Shareholder circular and Notice of General Meeting

The Company expects to publish a circular today in connection with the matters described in this announcement, which will contain a notice convening the General Meeting at which Shareholders will be asked to consider and, if thought fit, approve the Resolutions. A letter will be posted to Shareholders today notifying them that a copy of the circular will be made available on the Company's website at www.bigsofatech.com.

The General Meeting will be held at the offices of Kindred Agency Limited, 4th Floor, Dean Bradley House, 52 Horseferry Road, London SW1P 2AF at 9.15 a.m. on 1 April 2019 (or as soon thereafter as the AGM has concluded or been adjourned).

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.

Expected timetable of principal events

 
                                                               2019* 
 Publication and dispatch of this document                   8 March 
 Latest time and date for receipt of the       9.15 a.m. on 28 March 
  proxy appointment for the General Meeting 
 Time and date of the General Meeting         9.15 a.m. on 1 April** 
 Results of the General Meeting announced                    1 April 
 Admission and commencement of dealings on      8.00 a.m. on 5 April 
  AIM 
 Despatch of definitive share certificates        within 10 Business 
  in respect of the New Ordinary Shares                         Days 
                                                        of Admission 
 

* All references to times in this timetable are to London times and each of the times and dates are indicative only and may be subject to change. Any such change will be notified by an announcement on a Regulatory Information Service.

** Or as soon thereafter as the AGM has concluded or been adjourned.

Definitions

 
 "Admission"                   the admission to trading on AIM of 
                                the New Ordinary Shares becoming effective 
                                in accordance with Rule 6 of the AIM 
                                Rules 
 "AGM"                         the annual general meeting of the Company 
                                convened for 9.00 a.m. on 1 April 2019 
 "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 
 "Arden"                       Arden Partners plc, the Company's nominated 
                                adviser and broker 
 "Board" or "Directors"        the directors of the Company 
 "Business Day"                any day which is not a Saturday, Sunday 
                                or a public holiday in the UK 
 "Capital Raising" or          the proposed conditional subscriptions 
  "Subscription"                by the Subscribers for the Subscription 
                                Shares at the Issue Price, further 
                                details of which are set out in the 
                                letter from the Chairman of the Company 
 "Enlarged Share Capital"      the entire issued ordinary share capital 
                                of the Company immediately following 
                                Admission 
 "Existing Ordinary Shares"    the 138,750,692 existing Ordinary Shares 
                                in issue at the date of this Circular, 
                                all of which are admitted to trading 
                                on AIM 
 "FCA"                         the Financial Conduct Authority of 
                                the UK 
 "General Meeting"             the general meeting of the Company, 
                                notice of which is set out at the end 
                                of this document, and any adjournment 
                                thereof 
 "Issue Price"                 4 pence per new Ordinary Share 
 "London Stock Exchange"       London Stock Exchange plc, a company 
                                registered in England and Wales with 
                                registered number 02075721 
 "New Ordinary Shares"         the Subscription 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 
 "Novum Securities"            Novum Securities Limited, a company 
                                registered in England and Wales with 
                                registered number 05879560 
 "Ordinary Shares"             ordinary shares of 3 pence each in 
                                the share capital of the Company 
 "Regulatory Information       a regulatory information service as 
  Service"                      defined by the AIM Rules 
 "Related Parties"             Adam Reynolds and certain of the Directors 
                                who propose to subscribe for new Ordinary 
                                Shares pursuant to the Subscription 
                                and/or settle outstanding accrued Directors' 
                                fees pursuant to the Settlement Share 
                                Issue 
 "Resolutions"                 the resolutions relating to matters 
                                necessary to implement the Subscription 
                                and the Settlement Share Issue to be 
                                proposed at the General Meeting, as 
                                set out in the Notice of General Meeting 
 "Settlement Shares"           the 3,000,000 new Ordinary Shares to 
                                be issued by the Company pursuant to 
                                the Settlement Share Issue 
 "Settlement Share Issue"      the proposed settlement of accrued 
                                Directors' fees owing to certain Directors 
                                by the issue of new Ordinary Shares 
                                at the Issue Price, further details 
                                of which are set out in the letter 
                                from the Chairman of the Company 
 "Shareholder(s)"              holder(s) of Existing Ordinary Shares 
 "Subscribers"                 Novum Securities and the Related Parties 
 "Subscription Shares"         the 22,000,000 new Ordinary Shares 
                                to be issued by the Company pursuant 
                                to the Subscription 
 

Enquiries:

 
 Big Sofa Technologies Group plc          via Vigo Communications 
 Kirsty Fuller, CEO 
 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 Technologies is an insight-led technology company. The design and development of our technology has been guided by expert understanding of the insight and analytics industries and the needs, pressures and business questions of the clients they serve.

We uncover and analyse new-to-the-industry behavioural data sets in video, enabled by the power of our pioneering data capture and platform technology. We are innovating both in how video-led projects and programmes are designed and in how the data is analysed, showcased, embedded and re-mined.

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

Big Sofa Technologies' 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

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March 08, 2019 02:49 ET (07:49 GMT)