Proposed Cancellation of Trading on AIM
May 29 2009 - 1:00PM
UK Regulatory
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 | +44 (0) 20 7523 8000 |
| Limited | | |
+---------------------------+---------------------------+---------------------------+
| | | |
+---------------------------+---------------------------+---------------------------+
| Walbrook PR Ltd | Paul McManus | +44 (0) 20 7933 8780 |
+---------------------------+---------------------------+---------------------------+
| | | +44 (0) 7980 541 893 |
+---------------------------+---------------------------+---------------------------+
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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