Proposed Cancellation of Trading on AIM

 

TIDMHIP 
 
RNS Number : 0836T 
HipCricket, Inc. 
29 May 2009 
 

 
 
HIPCRICKET, INC. 
 
 
Proposed Cancellation of Trading on AIM in Shares of Common Stock 
 
 
Notice of Special General Meeting of Stockholders 
 
 
 
 
The Board of Directors (the "Board" or the "Directors") of HipCricket, Inc. 
("HipCricket" or the "Company") is today posting a letter to stockholders of the 
Company, together with a notice of special general meeting of stockholders, 
proxy statement and proxy form (together, the "Meeting Documents") regarding a 
resolution for the proposed cancellation of the trading on AIM in the Company's 
shares of common stock (the "AIM Cancellation"). 
 
 
A special general meeting of stockholders is being convened to be held at 9.00 
a.m. (Pacific time) on Friday, 26 June 2009 (the "Special General Meeting") to 
consider and approve the resolution for the AIM Cancellation. Such resolution 
will only be approved and effective for the purposes of the AIM Rules for 
Companies if at least seventy-five per cent (75%) of the votes attaching to all 
the Company's shares of common stock held by stockholders present in person or 
by proxy at the Special General Meeting and entitled to vote are cast in favour 
of the resolution. Following, and subject to, the approval of stockholders of 
the Company, application will be made to the London Stock Exchange for the AIM 
Cancellation and it is expected that the AIM Cancellation will occur on 6 July 
2009. 
 
 
Copies of the Meeting Documents will be available later today on the Company's 
website at www.hipcricket.com. 
 
 
In the letter to stockholders from the Board accompanying the Meeting Documents, 
the following statement is made by the Board regarding the future prospects of 
the Company: 
 
 
"Future Prospects 
 
 
We also want to provide you with a brief update on the exciting opportunities we 
see for the Company. Of course, we cannot make any assurances as to future 
performance, and the future performance of the Company's business is subject to 
many conditions beyond our control. 
 
 
The Board recognizes that creating stockholder value is its highest priority. To 
that end, the Board believes that the proposed AIM Cancellation is a proactive 
step to position the Company better in order to exploit the opportunities that 
we believe may present themselves in the next 24 months, including a possible 
private financing later in 2009. While HipCricket is currently well capitalized, 
additional funds could be used to accelerate the Company's growth and solidify 
its position as one of the prominent mobile marketing companies in the world. 
 
 
In the year ended 31 December 2008, the Company doubled its revenues year over 
year. Growth in revenues was negatively impacted by reduced spending by 
advertisers in the United States. These reductions were largely due to the 
recent global economic turmoil and its impact particularly on small companies, 
and have resulted in a longer and more challenging sales ramp up process for the 
Company. Moreover, it is our view that the broadcasting industry has been 
particularly adversely affected by the recent reductions in advertising spending 
and this industry accounts for a sizeable portion of the Company's target 
business. 
 
 
Looking forward, we expect overall spending on mobile as a subset of advertising 
to grow significantly which may positively impact the Company's business. The 
current sales pipeline for the Company is larger than it has ever been. In 
addition, the Company created the first Hispanic Mobile Marketing Network in the 
United States and also established a strategic partnership to sell into Mexico. 
 
 
Thus far in 2009, the Company earned several industry awards, and added many new 
premier customers including Macy's and Jiffy Lube, as well as leading US 
broadcast radio and TV stations such as ESPN Seattle. 
 
 
In closing, the Board is very pleased that 2009 appears to be off to a strong 
start. We are excited about the opportunities available to us, moreover we 
strongly feel that the opportunity to raise additional capital as a private 
company to accelerate the Company's growth is more advantageous to current 
stockholders than any nominal liquidity on AIM. Those at the core of the 
business -- HipCricket team members -- continue to dedicate themselves to the 
success of the Company. As always, we appreciate your support and look forward 
to sharing our success with you in the future." 
 
 
Background to and Reasons for the AIM Cancellation 
 
 
The Company's shares of common stock of US$0.01 each (the "Common Stock") were 
admitted to trading on AIM on 27 November 2007 with a goal of raising additional 
capital for the Company, as well as creating a market for the Company's Common 
Stock. 
 
 
In reaching its decision to recommend the proposed cancellation of the trading 
on AIM in the Company's Common Stock (the "AIM Cancellation"), the Board has 
considered the following: 
 
 
  *  Lack of Liquidity for Stockholders. Since the Company's shares are not 
  registered in the United States, and a significant portion of the Company's 
  outstanding shares of Common Stock is held by stockholders in the United States, 
  none of whom have access to trading on AIM, the admission of the Common Stock to 
  trading on AIM has not led to the liquidity for our stockholders that the Board 
  had originally hoped for. In addition, the relatively few trades in our shares 
  that have occurred since admission to AIM have not been sufficient to provide 
  liquidity to those of our stockholders who may wish to trade their positions on 
  AIM. Thus, the Board believes that the Company should revert to an unquoted 
  company with a goal of developing a path to provide meaningful liquidity for all 
  of its stockholders in the United States equity markets within the next 12 to 24 
  months. While the Board feels strongly that its focus must be on the creation of 
  stockholder value, the Board also recognizes that liquidity for the Company's 
  stockholders is important. 
 
 
 
  *  Suppressed Share Value: The Board believes that the lack of liquidity in the 
  Company's shares of Common Stock coupled with the difficulty for small cap AIM 
  companies to attract institutional investors and sufficient coverage by analysts 
  or market makers, has adversely impacted the price of the Company's shares of 
  Common Stock. The Board believes that reverting to an unquoted company will 
  provide the Company with more flexibility in pursuing potential business 
  combinations as such opportunities present themselves. 
 
 
 
  *  Costs Associated with AIM Admission. The Board estimates the annual cost of 
  being a company whose shares are admitted to trading on AIM (an "AIM company") 
  to be approximately $210,000 (or about GBP132,000). The Board also believes that 
  the administrative requirements of being an AIM company may unnecessarily divert 
  the management's focus from the creation of stockholder value. The Board does 
  not believe that being an AIM company provides the Company with any significant 
  benefit to justify the associated costs, especially given the limited liquidity 
  in the trading of its shares of Common Stock; 
 
 
 
The Board has therefore concluded that the AIM Cancellation is in the best 
interest of the Company and its stockholders as a whole. 
 
 
Stockholder approval is now being sought for the AIM Cancellation in accordance 
with Rule 41 of the AIM Rules for Companies. 
 
 
Effects of the AIM Cancellation on Stockholders 
 
 
The principal effects of the AIM Cancellation will be: 
 
 
  *  that there would be no longer a formal market mechanism enabling the 
  stockholders to trade their shares of Common Stock through AIM; 
 
  *  that the Company may no longer use AIM to access capital, although the Board 
  believes that the Company may still access capital in the private markets; 
 
  *  that the Company would not be required to make public announcements or 
  notifications pursuant to the AIM Rules for Companies; and 
 
  *  to reduce the amount of time and money spent in meeting the requirements of the 
  AIM Rules for Companies and related regulatory requirements, including 
  reporting, disclosure and corporate governance requirements for an AIM company. 
 
 
 
The Company will endeavour to continue to provide a number of the same 
facilities and services to stockholders which are currently enjoyed as 
stockholders of an AIM company. The Company will: 
 
 
  *  continue to send stockholders copies of the Company's audited annual financial 
  reports as well as operational and financial updates as appropriate (although 
  this will be at the Board's sole discretion and the Board will in exercising 
  such discretion, be mindful not to put the Company's at a competitive 
  disadvantage by doing so); 
 
  *  maintain the Company's website, www.hipcricket.com, to keep stockholders 
  informed of developments (although not all documents sent to stockholders will 
  necessarily appear on such website); 
 
  *  continue to hold general meetings in accordance with the Delaware General 
  Corporation Code and the Company's certificate of incorporation and bylaws; 
  *   continue to have a Board consisting of both executive and independent 
  directors, and to operate Audit and Compensation Committees chaired in each case 
  by an independent director. 
 
 
 
Transactions in Common Stock following the AIM Cancellation 
 
 
Following the AIM Cancellation, there will be no market facility for dealing in 
the Company's shares of Common Stock. The Board is aware that stockholders may 
still wish to purchase or dispose of shares of Common Stock following the AIM 
Cancellation becoming effective and, accordingly, intends to use reasonable 
efforts to create and maintain process to facilitate such exchanges. The Company 
intends to create a system pursuant to which stockholders or persons wishing to 
acquire shares of Common Stock will be able to leave an indication with the 
Company that they are prepared to buy or sell at an agreed price. In the event 
that the Company is able to match that order with an opposite sell or buy 
instruction, the Company will contact both parties so that they may negotiate 
the final purchase and sale of the offered Common Stock. These exchanges must 
comply with applicable securities law requirements, and may take some time to 
process. The Company is not making any assurance that shares of Common Stock 
will be available at any particular time, nor can the Company assure that a 
purchaser will exist to acquire shares of Common Stock being offered at any 
particular time or price. 
 
 
The contact details of the exchange system, once arranged, will be made 
available to stockholders on the Company's website, www.hipcricket.com. 
 
 
Expected Timetable of Principal Events 
 
 
Set out below is the expected timetable of events assuming that the resolution 
in respect of the AIM Cancellation is approved by the Company's stockholders at 
the Special General Meeting on 26 June 2009: 
 
 
  *   Notification to the London Stock Exchange of the Company's intention to cancel 
  admission of the Common Stock to trading on AIM: 29 May 2009 
 
  *  Dispatch of the Notice: 29 May 2009 
 
  *  Latest time and date for receipt of completed proxies for use at the Special 
  General Meeting: 9:00 a.m. Pacific time (GMT - 7 hours) on 24 June 2009 
 
  *  Special General Meeting: 9:00 a.m. Pacific time (GMT - 7 hours) on 26 June 2009 
 
  *  Last day of trading in Common Stock on AIM: 3 July 2009 
 
  *  Cancellation of admission of Common Stock to trading on AIM: 7.00 a.m. London 
  time on 6 July 2009 
 
 
 
Each of the times and dates in the above timetable is subject to change. The 
Company will post any changes to the above timetable on the Company's website, 
www.hipcricket.com and make an RIS announcement. 
 
 
Recommendation 
 
 
The Board considers that the proposed AIM Cancellation is fair and reasonable 
and in the best interests of the Company's stockholders as a whole. Accordingly, 
the Board recommends that the stockholders vote to approve (i.e. in favour of) 
the proposed resolution, as each of the Directors intends to do in respect of 
his own holding of shares of Common Stock, amounting to an aggregate of 
1,235,025 shares of Common Stock (representing 4.3 per cent. in aggregate of the 
outstanding shares of Common Stock at the record date). 
 
 
For further information, please contact: 
 
 
+---------------------------+---------------------------+---------------------------+ 
| HipCricket, Inc.          | Jeff Hasen                | 425 452 1111              | 
+---------------------------+---------------------------+---------------------------+ 
|                           |                           |                           | 
+---------------------------+---------------------------+---------------------------+ 
| Collins Stewart Europe    | Hugh Field                | [phone]      | 
| Limited                   |                           |                           | 
+---------------------------+---------------------------+---------------------------+ 
|                           |                           |                           | 
+---------------------------+---------------------------+---------------------------+ 
| Walbrook PR Ltd           | Paul McManus              | [phone]      | 
+---------------------------+---------------------------+---------------------------+ 
|                           |                           | [phone]      | 
+---------------------------+---------------------------+---------------------------+ 
 
 
- ENDS - 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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