TIDMIMTK
RNS Number : 1980Z
Imaginatik PLC
25 May 2016
Imaginatik plc
("Imaginatik" or "the Company")
Proposed Placing and Open Offer to raise up to GBP2.1m
Following the Company's announcement on 17 May 2016, the Company
is pleased to confirm that it proposes to raise up to approximately
GBP2.1 million by way of a Placing and Open Offer (the
"Fundraising"). The Open Offer of up to GBP0.53 million will allow
the Company's existing Shareholders the opportunity to participate
in the Fundraising.
Highlights
-- Proposed Fundraising of up to c. GBP2.1 million by the issue
of New Ordinary Shares at 2.5 pence per Ordinary Share
-- Fundraising to be by way of a Placing of 63,263,520 New
Ordinary Shares (c. GBP1.6 million) and an Open Offer of up to
21,277,896 New Ordinary Shares (c. GBP0.53 million)
-- Open Offer on basis of 1 Open Offer Share for every 4 Existing Ordinary Shares held
-- Proceeds of the Fundraising to be used to strengthen the
Company's balance sheet and fund business development investment
costs and sales and consulting capacity as the Company continues to
drive revenue growth
Matt Cooper, Non-Executive Chairman of Imaginatik,
commented:
"We have been delighted by the support shown by new and existing
investors. These funds will enable Imaginatik to capitalise on the
growth achieved in the last financial year and the underlying
progress within the business. We have built a strong offering and
are now recognised as leaders in the growing international
innovation industry. We have outstanding reference customers
spanning two major markets: the US and Europe, and believe
Imaginatik now has the platform for success."
The Placing is subject to the Placing Agreement becoming
unconditional in all respects. The Placing Agreement is conditional
on the passing of, inter alia, Resolutions at a General Meeting of
the Company to be held on 13 June 2016 and the Admission to trading
on AIM of all the New Ordinary Shares to be issued in connection
with the Placing.
A circular (the "Circular") setting out details of the proposed
Fundraising and giving notice of an General Meeting to approve
these proposals will be sent to Shareholders tomorrow and will be
available on the Company's website
http://imaginatik.com/company/investor-center
Capitalised terms shall have the same meaning as in the Circular
unless the context requires otherwise.
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
Jonny Franklin-Adams, corporate
finance
Camille Gochez, corporate
broking
Alma PR Tel: 020 8004
4218
Hilary Buchanan
Caroline Forde
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, Caterpillar 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) with offices
in Boston, MA, and Fareham, UK.
For more information visit www.imaginatik.com.
The Company proposes to raise up to GBP1.6 million (before
expenses) by way of a Placing and up to GBP531,947 by way of an
Open Offer, thus allowing the Company's existing Shareholders the
opportunity to participate in the fundraising.
The terms of the Placing and Open Offer are described below and
in the Circular. The aggregate gross proceeds of the Placing and
Open Offer are expected to be approximately GBP2.11 million
(assuming maximum take up under the Open Offer) and, as explained
below, the Directors believe the proceeds will be sufficient to
take the Company to the stage where it is generating net positive
cashflow from its innovation consultancy and software licensing
business. The Placing and Open Offer are conditional, inter alia,
upon the Placing Admission and Offer Admission respectively and
approval of the Resolutions by Shareholders at the General
Meeting.
DETAILS OF THE OPEN OFFER AND PLACING
Qualifying Shareholders are invited to apply for Offer Shares
under the Open Offer at a price of 2.5 pence per Offer Share,
payable in full on application and free of all expenses, pro rata
to their existing shareholdings on the basis of:
1 Offer Share for every 4 Existing Ordinary Shares
held at the Record Date and so on in proportion for any other
number of Existing Ordinary Shares then held. Open Offer
Entitlements will be rounded down to the nearest even whole number
of Offer Shares. Fractional entitlements which would have otherwise
arisen will not be issued.
The Open Offer is subject to the satisfaction, amongst other
matters, of the following conditions on or before 8.00 a.m. on 27
June 2016, or such later date (being not later than 8.00 a.m. on 30
June 2016), as the Company and finnCap may decide:
(i) the Placing Agreement being entered into and becoming
unconditional in all respects and not having been terminated in
accordance with its terms; and
(ii) Offer Admission becoming effective.
The Open Offer has been structured so as to allow Qualifying
Shareholders to subscribe for Offer Shares at the Offer Price pro
rata to their holdings of Existing Ordinary Shares. To the extent
that Offer Shares are not subscribed by Qualifying Shareholders,
Open Offer Entitlements will lapse. Further details of the Open
Offer and the procedure for application are given in the
Circular.
finnCap has, pursuant to the Placing Agreement, undertaken to
use its reasonable endeavours to place the Broker Placing Shares
with certain other investors, conditional upon the passing of the
Resolutions and on Placing Admission. In addition, seven investors
have conditionally agreed directly with the Company to subscribe
for 21,591,520 Company Placing Shares.
I have given a commitment to subscribe in person or by a
nominee, for 20,000,000 Company Placing Shares, representing 31.6
per cent. of the Placing Shares.
Shawn Taylor has given a commitment to subscribe in person or by
a nominee, for 200,000 Company Placing Shares, representing 0.32
per cent. of the Placing Shares.
Simon Charles has given a commitment to subscribe in person or
by a nominee, for 200,000 Broker Placing Shares, representing 0.32
per cent. of the Placing Shares.
Ralph Welborn has given a commitment to subscribe in person or
by a nominee, for 340,000 Company Placing Shares, representing 0.54
per cent. of the Placing Shares.
The subscription by Matt Cooper constitutes a related party
transaction for the purposes of the AIM Rules. The Directors (other
than Matt Cooper) consider, having consulted with finnCap as the
Company's nominated adviser, that the terms of Matt Cooper's
participation in the Placing is fair and reasonable insofar as
Shareholders are concerned.
The New Ordinary Shares 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
Admission.
Settlement and dealings
Separate application will be made to the London Stock Exchange
for the Placing and Accepted Offer Shares to be admitted to trading
on AIM. It is expected that Placing Admission will become effective
and that dealings will commence on 14 June 2016 and Offer Admission
will become effective and that dealings will commence on 27 June
2016. Further information in respect of settlement and dealings in
the New Ordinary Shares is set out in paragraph 7 of Part II of the
Circular
Overseas Shareholders
It is the responsibility of any person receiving a copy of the
Circular and/or the Application Form outside the United Kingdom to
satisfy himself as to the full observance of the laws and
regulatory requirements of the relevant territory in connection
therewith, including obtaining any governmental or other consents
which may be required or observing any other formalities required
to be observed in such territory and paying any other issue,
transfer or other taxes due in such other territory. If in doubt,
such persons should consult their professional advisers. Persons
(including, without limitation, nominees and trustees) receiving
the Circular and/or the Application Form should not, in connection
with the Proposals, distribute or send it into any jurisdiction
when to do so would, or might contravene local securities laws or
regulations. Any person who does forward the Circular into any such
jurisdictions should draw the recipient's attention to the contents
of paragraph 6 of Part II of the Circular regarding Overseas
Shareholders. If you are an Overseas Shareholder, it is important
that you read that part of the announcement.
USE OF PROCEEDS
The aggregated gross proceeds of the Issue are expected to be
approximately GBP2.11 million (assuming maximum take up under the
Open Offer). The proceeds will be used to allow the Company to seek
to add additional sales and consulting capabilities to capture
increased volume of opportunities and intends to increase the
marketing spend to build the Company's brand in the marketplace.
The Company intends to build new technology capabilities to capture
growing market demand, and hire a full-time CTO and add additional
developer capacity. An increase in working capital will allow the
Company to smooth out the seasonality in the sales pipeline.
The Company also intends to use the proceeds to repay a loan
taken out with Matt Cooper, Non-Executive Chairman, in January 2015
amounting to $250,000 for use in connection with the Company's
short term working capital requirements following the delay of
certain contracts. The loan will be repaid in full, including
interest accrued at a rate of 10 per cent. per annum.
The Board believes that the expected net proceeds of the Issue
will allow the Company to generate net positive cash flow from its
operations. The Directors believe that the Issue is the most
equitable and efficient method to allow as many Shareholders to
participate in the Company's future as possible.
CURRENT TRADING AND FUTURE PROSPECTS
Current Status
The Company is currently completing a multi-year turnaround;
with significant revenue growth in the last financial year the
Directors believe the Company is now approaching the point of
breakeven. The Company has a comprehensive suite of offerings that
combines innovation consulting services and technology
products.
The Company's recently published State of Global Innovation: New
Industry Report 2015 was the result of a survey of 200 business
leaders at companies with 200 or more employees. This study
highlights a number of statistics demonstrating that innovation
matters to today's companies. Firstly 95% of those companies
surveyed include innovation on the management agenda. Secondly, 59%
of those companies surveyed now have a formal innovation program in
place. Finally 40% of those companies surveyed now employ a Chief
Innovation Officer (or have a person in a similar role). This
maturing of the market place is further reflected in the fact that
innovation expenditure continues to grow. Between 2005 and 2014 the
Bloomberg Global Innovation 1000 Study shows that innovation
R&D investment has increased from US$400billion to
US$650billion, which increased every year other than 2009-2010.
Furthermore external innovation investments (CVC) increased between
2012 and 2014 from US$2.089billion in Q1 2012 to US$4.019billion in
Q2 2014.
The Company has seen a strategic shift over the past few years.
Prior to 2012 the Company was operating in what was an immature
innovation market, selling mostly a narrow technology offering to
ostensibly mid-level technology buyers with a limited consulting
offering. This period saw the Company experience a high level of
churn within its client base and with little or no revenue growth
resulting in operating losses.
From 2013 to 2015 the Company embarked on a new strategy. This
entailed building out a consulting team, broadening the technology
offering with new products and recruiting new employees. This
change of focus helped the Company to secure new clients and
reduced the client churn rate down to less than 10% per year by
value.
The Company now believes that it has a strategy constructed
around the full-service offering. The Company is a recognised
market leader as defined by an independent third party report
published in April 2016. The Company recently appointed a new CEO
with innovation advisory and consulting expertise. The consulting
team has an average of 15+ years' experience in corporate
innovation management and have between them dealt with clients such
as IBM, Pfizer and Cargill. In today's maturing innovation
marketplace the Directors believe that the Company is now poised
for growth.
The Company has three main client offerings:
1) Innovation Advisory Consulting
This involves advisory consulting helping senior executives to
build their corporate innovation programs. Projects are typically
one to three months in duration.
2) Innovation Capability Building
The Company provides workshops, training, facilitation, and
program management services to help build innovation processes.
These offerings can be project based with delivery over a few
months, but are also often sold as part of annual license
agreements.
3) Innovation Software Platform
The Company provides an innovation software platform that is
capable of enterprise deployments in large organisations, allowing
them to scale consistent innovation practices across the
enterprise. These will typically be annual or multi-year Software
as a Service ("SaaS") contracts.
The Company offers a complete innovation package, and was
described in a report published in April 2016 by an independent
technology and market research company as the "most comprehensive
innovation management solution". The same report ranked the Company
above all competitors in terms of both its current offering and its
strategy.
Client Base
Examples of clients currently under contract with the Company
include in the US several American insurance companies, an American
multi-national oil and gas company, a multi-national manufacturer
of construction and mining equipment, engines and turbines, and a
fortune 150 energy company. In Europe the Company's client base
includes a multi-national oil and gas exploration, production and
oil products business, a multi-national tyre manufacturer, a
European based airline and a multi-national food services and
facilities management business.
Financial Review
The following is based on the unaudited accounts of the Company
for the year ended 31 March 2016.
Total bookings for the year to 31 March 2016 amounted to GBP4.0m
(FY2015: GBP3.37m) with a significant contribution in the year
arising from contract renewals, with a large number of multi-year
contracts being available for renewal in the period. During the
year, 31% of bookings were generated from up-selling our software
and consulting services into existing customers, 22% from selling
into new clients, and 47% from renewals business (FY2015:
39:42:19%). We added 9 new customers during the year (FY2015:
21).
Total recognised revenue for the year ended 31 March 2016 is
expected to increase by approximately 17% to GBP3.9 million
(FY2015: GBP3.34 million). Recognised revenue has improved over
each of the last three years. Key to this has been an increase in
the amount derived from the consulting services that the Company
offers, growth which is largely a function of the innovation
advisory work contracted. Consulting revenue has increased
approximately 154% from GBP0.44m in FY2014 to approximately GBP1.0m
in FY2016. This is often the first point of contact for new clients
as we seek longer term relationships.
The US continues to be our core sales market and the percentage
of recognised revenues from the region grew in the period to 31
March 2016 to 77% (FY2015: 71%) with the remaining 23% made up from
the rest of the world (FY2015: 29%).
Losses on ordinary activities after tax are expected to be
approximately GBP0.95m in the year ended 31 March 2016 (FY 2015:
GBP1.46 million), a reduction of 35%. This improved position on the
prior year is driven by the higher revenues achieved with only a
small increase in the total cost base.
We have continued to invest in our technology platform in the
year, upgrading and adding new functionality to improve our
competitiveness. In the year we capitalised GBP0.27m of costs
(FY2015: GBP0.2m).
Customer churn, as measured by value, has reduced over the last
three years and is now at 10% or less. We attribute these low churn
rates to the role that our consulting services play in ensuring
that our clients secure ongoing material benefits from the use of
the technology and services. However, this is down from 33% in
2013. Most customers utilise some form of consulting service from
the Company.
Outlook
The Company will seek to add additional sales and consulting
capabilities to capture increased volume of opportunities and
intends to increase the marketing spend to build the Company's
brand in the marketplace.
The Company intends to build new technology capabilities to
capture growing market demand, and hire a full-time CTO and add
additional development capacity.
An increase in working capital will allow the Company to smooth
out the seasonality in the sales pipeline.
DIRECTORS' INTERESTS
The interests (all of which are beneficial unless stated
otherwise) of the Directors and their immediate families and of
persons connected with them (within the meaning of Section 252 of
the 2006 Act) in the issued share capital of the Company and the
existence of which is known to, or could with reasonable due
diligence be ascertained by, any Director as at the date of this
document and as they are expected to be upon completion of the
Proposals, assuming (where applicable) that they subscribe for the
maximum number of New Ordinary Shares they have agreed to take, as
stated below (but excluding the interests in options over Ordinary
Shares set out in paragraph 2.2 of the Circular), are as
follows:
Name of As at the date of Immediately following
Director this document Placing Admission
--------------- --------------------------- ------------------------
Number of Percentage Number of Percentage
Ordinary of Existing Ordinary of Share
Shares Issued Share Shares Capital
Capital Following
Placing
Admission
--------------- ----------- -------------- ----------- -----------
Matthew
Cooper 22,929,576 26.94 42,929,576 28.93
--------------- ----------- -------------- ----------- -----------
Shawn Taylor 351,852 0.41 551,852 0.37
--------------- ----------- -------------- ----------- -----------
Ralph Welborn - - 340,000 0.23
--------------- ----------- -------------- ----------- -----------
Simon Charles 2,503,182 2.94 2,703,182 1.82
--------------- ----------- -------------- ----------- -----------
PLACING AND OPEN OFFER STATISTICS
Offer Price and Placing Price 2.5p
Number of Existing Ordinary Shares
in issue at the date of this
document 85,111,585
Number of Offer Shares available
under the Open Offer 21,277,896
Number of Placing Shares 63,263,520
Number of New Ordinary Shares* 84,541,416
Estimated gross proceeds of the GBP1.6 million
Placing *
Estimated gross proceeds of the GBP0.53 million
Open Offer*
Enlarged Share Capital on Admission* 169,653,001
Percentage of the Enlarged Issued
Share Capital represented by
the New Ordinary Shares* 49.8
Market capitalisation of the GBP4.2 million
Company on Admission at the Offer
Price*
* assuming that the Placing completes and there
is maximum take up under the Open Offer.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for the Open Offer 5.30 p.m. on 24
May 2016
Announcement of the Issue 7.00 a.m. on 25
May 2016
Ex entitlement date for the 8.00 a.m. on 25
Open Offer May 2016
Application Forms and Circular 26 May 2016
posted to Qualifying Shareholders
Open Offer Entitlements credited 27 May 2016
to accounts of Qualifying CREST
Shareholders
Latest time and date for receipt 11.00 a.m. on 9
of Forms of Proxy for use at June 2016
the General Meeting
General Meeting 11.00 a.m. on 13
June 2016
Placing Admission effective 8.00 a.m. 14 June
and trading expected to commence 2016
CREST members' accounts credited as soon as possible
in respect of Placing Shares after
in uncertificated form 8.00 a.m. on 14
June 2016
Recommended latest time for 4.30 p.m. on 17
requesting withdrawal of Open June 2016
Offer Entitlements and from
CREST
Latest time for depositing 3.00 p.m. on 17
Open Offer Entitlements in June 2016
CREST
Latest time and date for splitting 3.00 p.m. on 20
of Application Forms (to satisfy June 2016
bona fide market claims only)
Latest time and date for receipt 11.00 a.m. on 22
of completed Application Forms, June 2016
and payment in full under the
Open Offer and settlement of
relevant CREST instructions
(as appropriate)
Share certificates in respect 23 June 2016
of Placing Shares expected
to be dispatched by no later
than
Result of Open Offer announced by 24 June 2016
Open Offer Admission effective 8.00 a.m. 27 June
and trading expected to commence 2016
in the Accepted Offer Shares
CREST members' accounts credited as soon as possible
in respect of Accepted Offer after
Shares in uncertificated form 8.00 a.m. on 27
June 2016
Share certificates in respect 6 July 2016
of Accepted Offer Shares expected
to be dispatched by no later
than
The times and dates set out in the expected timetable of
principal events above and mentioned throughout this announcement
and in the Application Form may be adjusted by the Company, in
which event the details will be notified to the London Stock
Exchange and, where appropriate, to Shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFZLLLQEFXBBQ
(END) Dow Jones Newswires
May 25, 2016 02:01 ET (06:01 GMT)
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