TIDMIMTK
RNS Number : 2949D
Imaginatik PLC
26 April 2013
26 April 2013
Imaginatik Plc
("Imaginatik" or the "Company")
Proposed placing
Imaginatik plc (AIM: IMTK.L), the world's first full service
innovation provider offering a range of technology products and
consultancy, is pleased to announce that, following a strong show
of support from existing and new investors, it has conditionally
raised up to GBP1.26m (before expenses) to provide additional
working capital to fund the development of the Group's
business.
The fundraising will be effected through the Placing of up to
2,013,110,000 new Ordinary Shares with new and existing investors,
including certain of the Directors, in each case at the Placing
Price, being 0.0625 pence per new Ordinary Share. Of these,
1,981,110,000 new Ordinary Shares have been placed or subscribed
for firm.
In addition to the GBP1.26m, certain of the Directors have
committed toswapping a proportion of their salary for equity
(pursuant to the Remuneration Re-investment Programme described
below) to subscribe for up to 262,400,000 new Ordinary Shares at
the Placing Price (the "Directors' Future Subscription Shares")
which will raise a further GBP164,000.
The Placing Price represents a discount of approximately 67 per
cent. to the closing mid-market price of 0.19 pence per Ordinary
Share on 25 April 2013. The Placing Shares and the Directors'
Future Subscription Shares will represent approximately 73 per
cent. of the Enlarged Share Capital.
As announced by the Company on 16 April 2013, given the stated
intentions of the Company's principal shareholders, and in the
light of the Placing, the Company has no intention of seeking
approval for its delisting from AIM following admission of the
Placing Shares and the Directors' Future Subscription Shares to
trading on AIM ("Admission").
Matt Cooper, Executive Chairman of Imaginatik, commented: "We
have been delighted by the strong support shown by existing and new
investors. These funds will enable Imaginatik to continue to
develop its innovation offering while remaining a public company on
AIM. We believe that with innovation and enterprise-wide
collaboration now moving into the mainstream our unique
consultancy-led business model means our market opportunity is
considerable and we therefore look to the future with
optimism."
Background to and reasons for the Placing
The Directors consider that the global market for innovation
competency is growing and will continue to grow. The Directors
believe that innovation and enterprise-wide collaboration are
becoming integral parts of many large organisations' business
practices and operational requirements.
As announced on 7 February 2013, during the second half of the
financial year ended 31 March 2013 the Company experienced lower
revenues than expected. This was a result of a mixture of slippage
in contract signatures and the loss of some older pure technology
contracts.
However, the Directors consider that Company's key
differentiator from that of its competitors, its consulting
offering, is showing very encouraging signs: the financial year
ended 31 March 2013 saw a strong increase in the percentage of
revenue generated through consulting. Furthermore, more than 50 per
cent. of contracts closed in that year had some form of consulting
component (2012 : 25 per cent.). It is also encouraging that the
Company has contracted with 24 new clients in the same financial
period, substantially more than the previous year, comprising a
mixture of pure consulting contracts, pilot projects and 13 new
annual contracts. The net customer gain during the period was 17
customers.
In Europe, sales traction is making solid progress and the
Directors believe that this market represents a potentially
significant opportunity for future growth.
With additional working capital, the financial position of the
Company will be strengthened, providing reassurance to existing and
new clients as to the Company's continued ability to provide and to
develop its software and consulting services.
Accounting policy change
As a result of discussions with shareholders in connection with
the Placing, the Company has decided to change the way it accounts
for its software licence fees. Previously, the Company had
recognised such licence fees in the month in which any contract was
signed, largely aligning revenues with cash. In future, however,
the Company will recognise such licence fees evenly over the term
of the contract. This represents a more conservative accounting
policy and one which the Directors believe will make forecasting
company performance more achievable.
This change in policy will result in a restatement of the
Company's revenues for the years from 31 March 2010 up to and
including 31 March 2013. The Directors believe, subject to the
conclusion of the audit process, that the effect of this
restatement will be to bring forward from prior years approximately
GBP1.6m to be recognised as additional deferred revenue on the
Company's consolidated balance sheet as at 31 March 2013. This
additional deferred revenue will be credited to the Company's
consolidated statement of comprehensive income in the years ended
31 March 2014 through 2016 as to approximately GBP1m for the 2014
financial year, approximately GBP400,000 for the 2015 financial
year and approximately GBP200,000 for the 2016 financial year. This
restatement will also have the effect of increasing prior year
losses by an equivalent amount.
Current trading and prospects
Since the Company last updated the market as to its trading
position on 7 February 2013, trading has been satisfactory, with
several new customer wins in the US. The most significant of these
was the conversion of The Society of Petroleum Engineers ("SPE")
into an annual customer. Our work with SPE began with a strategic
innovation consulting engagement in May 2012 and moved on to
further consulting work in the late summer. SPE became an annual
customer in March 2013. In addition to this, the Company has
secured a pilot project at Yale University, a new consulting
engagement with Covidien as well as upsell into both Exxon Mobil
and John Deere.
The effect of the accounting policy change on the results to be
reported for the financial year ended 31 March 2013 is to reduce
revenues by approximately GBP120,000 with a corresponding increase
in losses before tax. The Directors expect that, taking into
account the effect of the accounting policy change, the results to
be reported for the financial year ended 31 March 2013 will be in
line with market expectations.
Our presence in Europe continues to develop well with the
signing of a three year contract with Yorkshire Building Society,
the result of a successful pilot engagement from earlier in the
year.
We expect to be in a position to announce a number of other new
customer wins in due course.
The Placing
Pursuant to the terms of the Placing Agreement, finnCap has
conditionally agreed, as agent for the Company, to use its
reasonable endeavours to procure subscribers for 1,690,310,000
Placing Shares with institutional and other investors (including
the Directors) at the Placing Price.
The Placing has not been underwritten. The Placing Agreement is
conditional, inter alia, upon:
1. the Resolution being duly passed at the General Meeting;
2. the terms of the Remuneration Re-investment Programme being
documented to the satisfaction of finnCap and approved and adopted
by the Company by no later than the day immediately prior to the
General Meeting; and
3. Admission becoming effective on or before 8.00 a.m. on 14 May
2013 or such later time and/or date as finnCap may agree in its
absolute discretion, but in any event by no later than 8.00 a.m. on
31 May 2013.
Certain investors are subscribing in aggregate for 322,800,000
Placing Shares (representing 16.03 per cent. of the Placing Shares)
under the Subscription Agreements at the Placing Price. The total
number of Placing Shares is therefore 2,031,110,000.
Directors' participation in the Placing and the Directors'
Future Subscription
David Gammon and Matt Cooper have in aggregate given commitments
to subscribe in person or by a nominee, for 96,000,000 and
80,000,000 Placing Shares respectively, a total of 176,000,000
Placing Shares representing 8.74 per cent. of the Placing
Shares.
It is the intention of the Directors other than Mr Gammon to
subscribe for up to 262,400,000 new Ordinary Shares under the
Directors' Future Subscription by way of the Remuneration
Re-investment Programme, at the Placing Price. The nature of this
reinvestment programme remains to be agreed by the Company but the
Company expects to have concluded these arrangements prior to the
date of the General Meeting in order to satisfy a condition of the
Placing Agreement. The participations of the Directors are expected
to be as follows:
Director Intended approximate Number of new
re- investment Ordinary Shares
amount at
the Placing Price
--------------- ---------------------------- -------------------
Matt Cooper GBP112,000 179,200,000
--------------- ---------------------------- -------------------
Shawn Taylor GBP9,000 14,400,000
--------------- ---------------------------- -------------------
Nick Goss GBP10,000 16,000,000
--------------- ---------------------------- -------------------
Luis Solis GBP8,000 12,800,000
--------------- ---------------------------- -------------------
Simon Charles GBP25,000 40,000,000
--------------- ---------------------------- -------------------
Total GBP164,000 262,400,000
--------------- ---------------------------- -------------------
The Directors' Future Subscriptions will each occur at the
Placing Price per new Ordinary Share. It is proposed that subject
to the passing of the Resolution, the Company itself funds these
participations by way of the Directors' Loans. It is not proposed
that the Directors' Loans be subject to any interest payment
obligation. Subject to professional advice which the Company is
presently obtaining, it is proposed that an element of each
Director's remuneration be applied towards the discharge of the
principal amount of each of these loans. It is proposed that in
certain circumstances the relevant loan would be repayable
immediately on the Director ceasing to be a Director.
It is proposed that the participation of the Directors referred
to in the table immediately above by way of the Remuneration
Re-investment Programme would be in respect of Ordinary Shares
which would comprise Future Subscription Shares.
The following table sets out the interests of the Directors in
the Existing Ordinary Shares and in the Enlarged Share Capital:
Director Number Percentage Number Estimated Number Percentage
of Existing of Existing of Placing Number of Ordinary of Enlarged
Ordinary Ordinary Shares of Directors' Shares Share
Shares Shares to be Future after Capital
(excluding acquired Subscription Completion
interests Shares
in options) to be
acquired
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Matt Cooper 90,525,613 10.70% 80,000,000 179,200,000 349,725,613 11.20%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
David Gammon 27,442,564 3.24% 96,000,000 _ 123,442,564 3.95%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Shawn Taylor 6,605,300 0.78% _ 14,400,000 21,005,300 0.67%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Nick Goss _ _ _ 16,000,000 16,000,000 0.51%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Simon Charles 19,511,771 2.31% _ 40,000,000 59,511,771 1.91%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Luis Solis _ _ _ 12,800,000 12,800,000 0.41%
--------------- ------------- ------------- ------------ --------------- ------------- -------------
Note: The above table excludes (i) the Directors'
interests to subscribe to new Ordinary Shares
under options granted to them by the Company,
and (ii) the interest of Mr Charles in 54,053,815
Ordinary Shares which he holds on trust for
the benefit of the Company following the conclusion
of the litigation proceedings in the Company's
favour against its former chief executive,
Mark Turrell.
Related party transactions
The Directors consider that it is unlikely that the Company
would be able to continue as a going concern if the Company were
unable to raise the funds required under the Placing. The Placing
would not be feasible if the Company provided an opportunity for
Shareholders to subscribe for new ordinary shares at the Placing
Price by means of an open offer. The Directors therefore consider
that the Placing is the preferable and more efficient way to source
the present funds required. The Placing Agreement is conditional on
the participations of the Directors in the Placing and the
Directors' Future Subscription.
The proposed participations of the Directors in the Placing and
the Directors' Future Subscription constitute related party
transactions for the purposes of Rule 13 of the AIM Rules ("Related
Party Transactions"). There are no independent directors for the
purposes of providing the fair and reasonable statement required
under Rule 13. Northland Capital Partners Limited, the Company's
Nominated Adviser, considers that the terms of the Related Party
Transactions are fair and reasonable insofar as the shareholders of
the Company are concerned.
General Meeting
The Placing, the participation of the Directors in the Placing
and the issue of the Directors' Future Subscription Shares, if any
are subject, amongst other things, to the passing of the Resolution
to be put to a General Meeting of Shareholders to be held at 11.00
a.m. on Monday 13 May 2013 at the offices of Marriott Harrison LLP,
11 Staple Inn, London WC1V 7QH.
The Placing Shares and the Directors' Future Subscription Shares
will upon their issue rank pari passu in all respects with the
Existing Ordinary Shares including the right to receive all
dividends or other distributions declared, made or paid by the
Company following Admission.
Application will be made to the London Stock Exchange for the
Placing Shares and the Directors' Future Subscription Shares to be
admitted to trading on AIM. It is expected that Admission will
occur at 8.00 a.m. on 14 May 2013.
For further information please contact:
Imaginatik plc Tel: 020 7917
2975
Matt Cooper, Executive Chairman
/ Shawn Taylor, CFO
finnCap Ltd Tel: 020 7220
0500
Victoria Bates
Northland Capital Partners Tel: 020 7796
Limited 8800
Edward Hutton / William Vandyk
Newgate Threadneedle Tel: 020 7653
9850
Caroline Evans-Jones / Hilary
Millar
About Imaginatik
Imaginatik provides a range of Innovation solutions comprised of
consultancy, enterprise software and program management to deliver
innovation results to companies such as The World Bank, The Chubb
Group of Insurance Companies, State Farm, Exxon Mobil, Pfizer,
Goodyear, the Yorkshire Building Society, Pitney Bowes and Cargill.
Few companies possess the internal capability to consistently
generate fresh ideas, identify those worth pursuing and reliably
transform them into real, value-enhancing assets. Imaginatik's
mission is to help these companies build sustainable innovation
competencies.
Imaginatik is a public company whose shares are traded on the
AIM market of the London Stock Exchange (LSE:IMTK.L) and is a World
Economic Forum Technology Pioneer with offices in Boston, MA, and
Fareham, UK. For more information visit www.imaginatik.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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