TIDMIMTK
RNS Number : 1265N
Imaginatik PLC
14 May 2015
14 May 2015
Imaginatik Plc
("Imaginatik" or the "Company")
Proposed issue of equity
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 intends to
conditionally raise GBP504,000 (before expenses) to provide
additional working capital to fund the development of the Group's
business until the Company receives significant cash receipts
following anticipated contract renewals later this year.
The Fundraising will be effected through the issue of a total of
18,663,330 new Ordinary Shares to new and existing investors,
including two of the Directors. In addition 950,475 new Ordinary
Shares will be issued to a supplier in lieu of cash payments. All
new Ordinary Shares will be issued at the Issue Price, being 2.7
pence per new Ordinary Share.
The Issue Price represents a discount of 13.7 per cent. to the
closing mid-market price of 3.13 pence per Ordinary Share on 13 May
2015, the latest practicable dealing day prior to the publication
of this document. The New Ordinary Shares will represent in
aggregate 23.71 per cent. of the Enlarged Share Capital.
The Placing was conducted in conjunction with Daniel Stewart
& Company and the Board are pleased to announce that Daniel
Stewart has been appointed as the Company's Broker with immediate
effect.
The Fundraising is subject, amongst other things, to the passing
of the Resolution to be put to a General Meeting of Shareholders to
be held at 10.30 a.m. on 1 June 2015. Further details of the
General Meeting are set out below. The Notice of General Meeting
which convenes the General Meeting will be set out in a Circular to
be published to shareholders as soon as possible.
Matt Cooper, Executive Chairman of Imaginatik, commented:
"We are delighted to announce that Imaginatik has been supported
in raising a small amount of additional working capital. This
working capital will allow the Company to be operationally
self-sufficient until contract renewal revenues are recognised
later on this year. This backing, from both existing and new
investors, validates the Company's strategy and supports Imaginatik
as a global full service innovation provider."
For further information please contact:
Imaginatik plc Tel: 01329 243
243
Matt Cooper Non-Executive Chairman
Ralph Welborn, CEO
Shawn Taylor, CFO
finnCap Ltd Tel: 020 7220
0500
Stuart Andrews / Giles Rolls
Daniel Stewart & Company Tel: 020 7776
6550
Martin Lampshire / David Coffman
Newgate Tel: 020 7653
9850
Adam Lloyd / Ed Treadwell / Jasper Randall
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, Exxon Mobil, Altria, Shell, Mayo
Clinic, 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
Background to and reasons for the Fundraising
We remain committed to our previously stated strategy and the
Company's repositioning as a global full service innovation
provider, helping our clients develop a sustainable company wide
innovation capability. We achieve this through a variety of
technology products, several of which have been recently developed
in addition to our strategic and operational consultancy
offerings.
Our operational marketplace continues to develop, with sector
coverage by industry analysts increasing, as a response to client
requirements wanting to further understand how innovation can be
institutionalised within their businesses. As recently as five
years ago, the notion that large corporations would have a C-level
officer devoted to innovation was not credible. This growing class
of executive now has a title, the Chief Innovation Officer (CINO),
and a rising slate of conferences, publications, and services are
targeting them. By one measure, over 40% of the Forbes Global 2000
now have a CINO or a close equivalent.
On 1 December 2014 Ralph Welborn joined Imaginatik as our Chief
Executive Officer, based in Boston, US. The Board is delighted that
Ralph's appointment has had an immediate beneficial impact on the
strategy and direction of the Company. With his senior consulting
background, Ralph is elevating conversations within the existing
and prospective client base and assisting the sales and consulting
teams to demonstrate that Imaginatik's services encompass more than
that of a technology vendor. Ralph has also been instrumental in
several of the Company's most recent technology and consulting
contract wins and we expect his positive influence to continue.
Following the interim results announcement on 8 December 2014,
the Group has continued to trade well and the Board expects to
report an increase in revenues for the year to 31 March 2015 of
approximately 15% at GBP3.34m (FY2014: GBP2.90m). The improved
revenue for the full year to 31 March 2015 follows a stronger
trading performance in the second half, with gross bookings of
GBP2.2m achieved over the 6 month period versus GBP1.04 in the
first half. This improved second half performance has been driven
by higher revenues in our consulting division, in addition to
several new technology contracts.
The loss after tax is expected to be similar to last year
(FY2014: GBP1.4m) as the Company continues investment in consulting
and sales capacities as well as the addition of a full time
CEO.
In the year ended 31 March 2015 the Company added a further 12
new customers on annual or multi-year technology contracts
increasing the Company's annual client base to 42 (March 2014: 31).
These new customers cover a wide range of sectors, including
manufacturing, professional services, pharmaceuticals,
biotechnology and media. This growing customer base increases the
annualised value of the company's renewals business by 29% to
GBP3.1m at 31 March 2015 (March 2014: GBP2.40m at constant
currency). Additionally, the Company has secured 9 new customers on
pilot projects or consulting engagements, several of which the
Board expects to convert in due course to annual or multi-year
technology contracts.
The sales pipeline of opportunities continues to grow and is
valued at GBP8.8m at 30 April 2015, compared with GBP7.7m a year
ago and GBP4.47m two years ago. The sales pipeline includes further
consulting led opportunities than previously as the Company seeks
to exploit this route as an initial value offering to customers. By
proving Imaginatik's value to the customer in this way, this can
develop into a longer term partnership, providing a stable annuity
stream.
The financial year ending 31 March 2016 contains a large array
of renewal revenue for the Company, with 34 of the existing
customer base available for renewal. This represents the confluence
of the Company's hard work over the prior 2 to 3 years,
demonstrated by customers having built out their technology
environments substantially over the last few years. We see this as
a great opportunity to further embed our technology and consulting
offerings within our customer base with additional multi-year
commitments as well as presenting us with excellent upsell
opportunities.
The Placing and Subscription
The Company intends to conditionally raise approximately
GBP504,000 in aggregate (before expenses) pursuant to the Placing
and the Subscription. The net proceeds of the Placing and the
Subscription receivable by the Company are estimated to be
approximately GBP470,000.
The Directors have concluded that effecting the Company's
recapitalisation by way of the Fundraising is the most efficient
way to source the funds required. As previously, the Directors did
consider the possibility of effecting the recapitalisation by way
of an open offer to all existing Shareholders, but considered that
given (i) the considerably greater expense to the Company involved
in effecting an open offer, (ii) the greater length of time it
would take to effect an open offer in contrast to the relatively
swift timetable of a Placing, and (iii) the Company had previously
undertaken the expense and time of seeking a recapitalisation by
way of an open offer in the past which did not generate a material
uptake, (iv) the feedback given to the Company by or on behalf of
certain Placees (whose commitments comprise a material part of the
Placing) that they would not participate in circumstances where the
Placing were linked to such an offer (which would have had the
effect of reducing the sums raised from the Placing below the
minimum required by those and other Placees for the Placing to
proceed), it was considered the Fundraising to be the preferable
and efficient way to source the present funds required.
Pursuant to the terms of the Placing Agreement, Daniel Stewart
has conditionally agreed, as agent for the Company, to use its
reasonable endeavours to procure subscribers for 9,074,071 Placing
Shares with institutional and other investors at the Issue Price.
The Issue Price represents a discount of 13.7 per cent. to the
closing mid-market price of an Ordinary Share on 13 May 2015, being
the last dealing day prior to the publication of this document. In
addition, it is intended that later today Simon Charles, myself and
employee of the company will enter into subscription agreements for
a total of 9,589,259 Subscription Shares at the Issue Price. The
Placing Shares and the Subscription Shares will represent in
aggregate 23.71 per cent. of the Enlarged Share Capital.
The Placing has not been underwritten. The Placing Agreement is
and the Subscription Agreements will be conditional, inter alia,
upon:
1. the Resolution being duly passed at the General Meeting;
2. Admission becoming effective on or before 8.00 a.m. on 2 June
2015 or such later time and/or date as Daniel Stewart may agree in
its absolute discretion, but in any event by no later than 8.00
a.m. on 30 June 2015; and
3. each of the Placing Agreement and Subscription Agreements
becoming unconditional save only for Admission.
The New Ordinary 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.
The Ordinary Shares currently have a nominal value of 5p each
and the Issue Price is 2.7p. Company law prohibits the issue of new
shares by a company at a price below the nominal value of those
shares and, accordingly, the Company is required to reduce the
nominal value of the Ordinary Shares to enable the Fundraising to
be implemented.
To give effect to the Share Capital Reorganisation, the Articles
will need to be amended to make changes to allow the creation of
deferred shares and these amendments will require Shareholders'
approval at the General Meeting.
It is therefore proposed that each of the existing Ordinary
Shares will be subdivided into one new Ordinary Share of 1 penny
each and one Deferred Share of 4p each ("Deferred Share").
Immediately following the Share Capital Reorganisation becoming
effective, each Shareholder's holding of Ordinary Shares will be
the same as their number of existing Ordinary Shares. Therefore,
each Shareholder's proportionate interest in the Company's issued
ordinary share capital will, and thus the aggregate value of their
holding should remain unchanged as a result of the
Reorganisation.
No new share certificates representing the Ordinary Shares will
be sent to Shareholders who hold existing Ordinary Shares in
certificated form. Accordingly, share certificates for the existing
Ordinary Shares will remain valid, and will only be replaced by
share certificates for Ordinary Shares when the old share
certificates are surrendered for cancellation following the
transfer, transmission or other disposal of Ordinary Shares.
Shareholders who hold the existing Ordinary Shares in
uncertificated form through CREST should expect to see the security
description updated for the existing ISIN number, in order to
reflect their holding in Ordinary Shares on 1 June 2015.
The Deferred Shares created will be effectively valueless as
they will not carry any rights to vote or dividend rights. In
addition, holders of Deferred Shares will only be entitled to a
payment on a return of capital or on a winding up of the Company
after each of the holders of Ordinary Shares have received a
payment of GBP100,000,000 on each such share. The Deferred Shares
will not be traded on AIM or listed and will not be transferable
without the prior written consent of the Board. No share
certificates will be issued in respect of the Deferred Shares, nor
will CREST accounts of shareholders be credited in respect of any
entitlement to Deferred Shares.
Expected Admission Date
Application will be made to the London Stock Exchange for the
19,613,805 New Ordinary Shares to be admitted to trading on AIM. It
is expected that Admission will occur at 8.00 a.m. on 2 June 2015.
Following Admission, the total number of shares in issue will be
82,698,095.
Directors' participations in the Fundraising
Simon Charles and I later today intend to subscribe in person or
by a nominee, for Subscription Shares as follows:
Director Number of Percentage Number of Number of Percentage
Existing of Existing Subscription Ordinary of Enlarged
Ordinary Ordinary Shares to Shares after Share Capital
Shares (excluding Shares be acquired Completion
interests
in options)
--------------- ------------------- ------------- -------------- -------------- ---------------
Matt Cooper 13,420,317 21.27 9,259,259 22,679,576 27.42
--------------- ------------------- ------------- -------------- -------------- ---------------
Simon Charles 2,083,182 3.30 320,000 2,403,182 2.91
--------------- ------------------- ------------- -------------- -------------- ---------------
Directors' Authority to issue and allot further Ordinary
Shares
In the light of the encouraging response to the Fundraising, the
Board considers that it would also be beneficial to both the
Company and Shareholders if the Company were authorised to retain
an element of flexibility to allot and issue (outwith the
Fundraising), as a whole or in tranches, Ordinary Shares (and/or
rights to subscribe to them) up to the aggregate nominal value of
GBP165,395 (representing 20 per cent. of the Enlarged Share
Capital) to meet any unforeseen future working capital requirements
or opportunities which the Board believes would be earnings
enhancing for the Company.
Related Party Transactions
The proposed participation of two Directors and the
participation by Hargreave Hale Limited (the latter as a
substantial shareholder in the Company owning 12,272,618 Ordinary
Shares comprising 19.45 per cent. of the Company's current issued
share capital), in the Fundraising constitute related party
transactions for the purposes of Rule 13 of the AIM Rules (the
"Related Party Transactions"). The independent directors, having
consulted with finnCap, the Company's nominated adviser, consider
that the terms of the Related Party Transactions are fair and
reasonable insofar as Shareholders are concerned.
Circular and Notice of General Meeting
A circular setting out the background to and further details of
the Fundraising will today be sent to Shareholders along with a
notice convening the General Meeting to be held at 10.30 a.m. on
Monday 1 June 2015 at the offices of Marriott Harrison LLP, 11
Staple Inn, London WC1V 7QH, at which the Resolution will be
proposed for the purposes of implementing the Fundraising.
The Resolution is required to grant the Directors sufficient
authority under the Act to allot and issue the New Ordinary Shares
and the Director's Future Subscription Shares and additional new
Ordinary Shares (and rights to subscribe therefor) up to an
aggregate nominal amount of GBP165,395, representing 20 per cent.
of the Enlarged Share Capital and to effect the Share Capital
Reorganisation.
Capitalised terms used in this announcement and not otherwise
defined shall have the same meaning given to them in the circular
to be dated 14 May 2015 ("Circular"). The Circular shall be
available on the Company's website: www.imaginatik.com.
The distribution of this document in or into jurisdictions other
than the United Kingdom may be restricted by law and therefore any
person who is subject to the laws of any jurisdiction other than
the United Kingdom should inform themselves about, and observe such
restrictions. Any failure to comply with the applicable
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
The Ordinary Shares have not been, and will not be, registered
in the United States of America under the United States Securities
Act of 1933 (as amended) (the "Securities Act") or qualified for
sale under the laws of any state of the United States or under the
applicable laws of any of Canada, Australia, the Republic of South
Africa, or Japan and, may not be offered or sold in the United
States of America, Canada, Australia, the Republic of South Africa,
or Japan or to, or for the account or benefit of, US persons (as
such term is defined in Regulation S under the Securities Act) or
to any national, resident or citizen of Canada, Australia, the
Republic of Ireland, the Republic of South Africa, or Japan. In
addition, the securities to which this document relates must not be
marketed into any jurisdiction where to do so would be
unlawful.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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