For Immediate Release |
22 September 2017 |
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014
Monchhichi Plc ("Monchhichi" or the "Company")
Investment in Sentiance N.V. ("Sentiance")
Change in Terms to Bonus Warrants and Advisor Warrants
Conversion and Cancellation of other existing warrants
Issue of Equity
Issue of new Warrants
Investment in Sentiance
As mentioned in previous statements, Monchhichi's plan is to make a series of cohesive and meaningful acquisitions with clear existing industry validation and (disruptive) growth trajectory in the Technology, Media and Internet sectors.
Today, the Directors are pleased to inform shareholders that they have reached agreement on a primary investment of €10.0 million in Sentiance, a leading and proven private technology player in the exciting field of artificial intelligence ("AI"), machine learning and behavioural data science. Based on current assessment and anticipated medium term developments at Sentiance, the Company expects to increase its holding with up to €40.0 million of additional follow up investment (subject to financing).
Further information on Monchhichi's initial equity shareholding and on Sentiance is provided below.
Bonus and Advisor Warrants
The Directors are confident that with the initial Sentiance investment agreed, legacy issues dealt with, and the impending upgrade to the main market, the investment community can start to focus on the real unfolding story of Monchhichi. This goes hand in hand with improving liquidity in the shares, further strengthening our overall capabilities and efficient access to the capital markets when appropriate. To accelerate this process and give existing and particularly future shareholders a chance to participate (near term) the Board has decided that it would be in the Company's and shareholders' best interests to reduce the exercise price of the outstanding Bonus Warrants and Advisor Warrants (9.3 million and 2.0 million respectively) to 60p per share from 80p per share. The final exercise dates remain the same, being 24 December 2017 for the Bonus Warrants and 24 December 2018 for the Advisor Warrants. In aggregate, 403 ordinary shares have been issued for Bonus Warrant conversions to date at 80p. The Company shall make appropriate arrangements to ensure that these previous Bonus Warrant holders receive equal benefit now that the exercise has been reduced from 80p to 60p per share.
Conversion and Cancellation of Warrants and associated Issue of Equity
In order to raise the necessary funds to make this significant initial investment and to rationalise the existing outstanding warrants prior to moving to the standard listing, the Company is pleased to announce that agreement has been reached with the holders of the 47.5p Investment Warrants ("IW") and those of the 60p Subscription Warrants ("SW") to exercise or cancel these classes of warrants in their entirety.
The existing Investment Warrants
The Investment Warrants were originally issued on 8 June 2017 with an exercise price of 47.5p. The exercise of the Investment Warrants (on agreed adjusted terms) results in the issue of 25,333,333 shares at 37.5p per share and raises a total of £9.5 million for the Company, with the balance of the Investment Warrants being cancelled and replaced with new CI One Warrants on a one-for-one basis (on the terms set out below).
The Subscription Warrants were originally issued on 10 February 2017 with an exercise price of 80p per share. These warrants have been cancelled and replaced with new CI Warrants on a one-for-two basis (on the terms set out below).
In addition the Company has placed a further 5,000,000 ordinary shares at 60.0p per share raising an additional £3.0 million.
The aggregate of these share issues raises a total of £12.5 million for the Company and simplifies the capital structure.
To facilitate both the initial Sentiance investment and the proposed subsequent follow up investments, Monchhichi has agreed to issue up to a maximum of 16,687,500 ordinary shares in satisfaction of fees and expenses in connection with the negotiation structuring and financing of the Sentiance investment. 8,187,500 ordinary shares will be issued in connection with the making of the initial investment with the issue of the balance of the 8.5 million ordinary shares linked to, and conditional upon, the successful completion of the further investments Monchhichi expects to make in Sentiance (subject to finance).
Issue of new Warrants
Moreover, to further align the capture of future equity upside, Monchhichi will issue up to 16.5 million Sentiance Warrants to new investors with an exercise price of 90p per share. These Sentiance Warrants must be exercised (or will otherwise lapse) once the mid-market Monchhichi closing share price reaches 160p per share for 5 consecutive days. If this target is not reached prior to 24 December 2018 the Sentiance Warrants will lapse.
Alongside the Sentiance Warrants and in conjunction with the complete cancellation of both the remaining Investment and Subscription Warrants, the Company has issued 13.0 million Conviction Investment One ("CI One") Warrants with an exercise price of 90p per share. These CI One Warrants must be exercised (or will otherwise lapse) once the mid-market Monchhichi closing share price reaches 160p per share for 5 consecutive days. If this target is not reached prior to 24 December 2018 the CI One Warrants will lapse.
As a result of the changes set out above the following Warrants will now be outstanding:
Instrument |
Number | Exercise Price |
Conditions |
1. Bonus Warrants |
9,349,739 | 60p |
To be exercised on or before 24 December 2017 or otherwise lapse |
2. Advisor Warrants |
2,000,000 | 60p |
To be exercised on or before 24 December 2018 or otherwise lapse |
3. Calvet Warrants |
2,000,000 | 50p |
To be exercised on or before 24 February 2019 or otherwise lapse |
4. Sentiance Warrants |
16,500,000 | 90p |
To be exercised at the earlier date of mid-market Monchhichi closing share price reaches 160p per share for 5 consecutive days or 24 December 2018 or otherwise lapse |
5. CI One Warrants |
13,000,000 | 90p |
To be exercised at the earlier date of mid-market Monchhichi closing share price reaches 160p per share for 5 consecutive days or 24 December 2018 or otherwise lapse |
6. Total Warrants1 |
42,849,739 |
At an average conversion price of 80.2p per share. Should all Warrants get exercised it would raise a further £34.3mn in equity for Monchhichi |
_________
1 With exercise periods ending between 24 December 2017 and 24 February 2019. On the basis that all Warrants are converted and excluding the 8.5 million deferred Sentiance shares the number of ordinary shares outstanding would increase to 126,377,749.
Background information on Sentiance
Sentiance is an outstanding unquoted technology business operating in the areas of artificial intelligence ("AI"), machine learning and signal processing to interpret real-time and behavioural context from sensor data. Sentiance already has an impressive roster of Tier I global clients in a variety of vertical market segments, as well as tactical industry partnerships and shareholders. Their proprietary technology and distinct data science capabilities are presently being tested and deployed into various mainstream mass market data ecosystems:
The Sentiance platform uses machine learning algorithms and deep learning techniques to analyse Internet of Things ("IoT") sensor data from mobile phones, wearables and IoT gateways. It thereafter turns data into behavioural and contextual insights:
o Understanding and predicting how people go through their everyday lives with full user consent;
o Clients use platform to enrich their first-party client data with real-life behavioural data. This in turn will deliver context-aware and highly personalised experiences;
o Powers a broad range of applications including world class telematics and driver scoring, personalised health coaching real-time client engagement as well as smart home products and services;
o Some of the world's most innovative companies are adopting their platform through Sentiance to help them make their users' lives safer, smarter, healthier, more cost effective and even more convenient.
o In the year ended 31 December 2016 Sentiance made a loss before tax of Euro 2.08m on turnover of Euro 1.4m.
Additional matters
1. Sentiance is already benefiting from our international network and behind the scenes support;
2. Sentiance is operating in the sweet-spot of data analytics, an area that we believe in years to come is going to be crucial for product and service differentiation, improved consumer engagement and response, sustainable higher conversion and retention rates leading to materially better returns. The Company is confident that Sentiance with the right support, conviction and of course a bit of luck, will emerge and be known by 2020 as one of the global market leaders in its field;
3. In the future, we can provide swift liquidity options to Sentiance investors without this leading to management distractions;
4. For more information please visit www.sentiance.com and do sign up for their regular news broadcasts.
In summary, the Directors are confident and excited that Sentiance will prove to be an exceptional investment and look forward to working closely with the talented and proven team to capture the clear opportunities ahead.
Sentiance Investment Structure
Monchhichi has agreed to invest €10.0m (£9.1 million) in a Series "G" round equity financing alongside a further small co-investment from KPN Venture BV, the investing arm of KPN, the largest telecoms and IT service provider in the Netherlands. Other investors in earlier fundraising rounds include Samsung Electronics and a range of well-known VC funds including Volta Ventures. The investment gives Monchhichi an initial equity interest of 14.2% (or 13,333 ordinary shares) in Sentiance.
As part of the Series G round, the Company also has the ability to participate in a lead role in an anticipated secondary offering of shares in Sentiance; this offering is expected to be closed prior to 2018. The Company expects to participate in this secondary offering, however the number of shares it can acquire will be dependent upon the availability of shares and demand from other shareholders and the Company's available cash resources.
In addition, the Company has secured the right to subscribe for preferred shares of a new class of capital in Sentiance for a total of €10.0 million. This right is available for a period of 18 months and, subject to financial resources, the Board may seek to exercise this right.
In addition, the Company has secured a further right to subscribe for preferred shares of a new class of capital in Sentiance for a total of €20.0 million. This right is available for a period of 60 months and, subject to financial resources, the Board may seek to exercise this right.
Commenting on today's announcement Simon Fry Executive Chairman said:
"Over the past year, we have witnessed first-hand the terrific progress Sentiance keeps making. Their cutting-edge proprietary technology is used and tested by a growing number of Fortune 100 companies in a broad range of verticals. The talented Sentiance team can now further accelerate their global deployment efforts. We look forward to proactively assisting them in their ambitious endeavours.
We welcome our new shareholders and are pleased that a firm line has now been drawn under the sorry historic past of the Company. The proposed imminent move to the Main Market will further facilitate our desire to turn Monchhichi into a credible and key alternative player in the Technology, Media and Internet space globally".
Toon Vanparys CEO and Frank Verbist CTO of Sentiance added:
"We are pleased to welcome Monchhichi to the Sentiance family as an additional cornerstone investor. Through their financial backing as well as their extensive network we will be able to accelerate our technical and commercial expansion plans and further strengthen our growing market position. Our growth plan is clear. Every company looking to build authentic and personalised experiences for their clients' needs to know that Sentiance can provide them with the right solution", said Toon Vanparys.
Frank Verbist, continued by saying: "We are presently a sizeable team of highly skilled data scientists and software engineers, specialized in machine learning, deep learning and signal processing at scale. We will grow this team to more than 80 by adding development hubs in different parts of the world."
Total Equity and Voting Rights
Application has been made to the London Stock Exchange for the 38,520,833 new ordinary shares to be admitted to trading on AIM. It is expected that admission will become effective on 29 September 2017 (although no dealings will take place on the basis that the current suspension of trading will not be lifted). The new Ordinary Shares will rank pari passu with the existing Ordinary Shares.
After admission of the new shares the Company's share capital will consist of 83,528,010 ordinary shares with voting rights. The Company does not hold any ordinary shares in treasury. Therefore, the total number of voting rights in the Company will be 83,528,010. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.
Market Abuse Regulation
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For further information:
Buchanan (Financial communications) Richard Oldworth / Henry Harrison-Topham / Catriona Flint [email protected] |
Tel: +44 (0)20 7466 5000 www.buchanan.uk.com |
Enquiries: Panmure Gordon (Nominated Adviser and Broker) Dominic Morley / Alina Vaskina |
Tel: +44 (0)20 7886 2500 |
Notes to the editors:
Monchhichi (MCC.L) is a UK quoted company that focusses on making conviction investments / acquisitions in people, organisations and outstanding businesses with proven track records, industry validated market positions and clearly visible disruptive growth opportunities in the Technology, Media and Internet space globally. For more please visit www.monchhichi.life
Sentiance is a data science company turning IOT sensor data into rich insights about people's behavior and real-time context. These insights enable companies to understand how customers go through their everyday lives, discover and anticipate the moments that matter most, and adapt their engagement to real-world behavior and real-time context. Sentiance's technology is used in insurance, smart health, smart mobility, smart home, connected car and commerce applications. Sentiance presently has offices in Antwerp (Belgium), New York and London. For more information about Sentiance visit www.sentiance.com.
For further contact: [email protected]
