Placing, proposed Board changes and Circular

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 

 

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN MOBILE STREAMS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

 

6 November 2019

Mobile Streams PLC

("Mobile Streams" or the "Company")

 

Placing

Proposed Board Changes

Circular and Notice of General Meeting

 

Mobile Streams PLC ("Mobile Streams" or the "Company") is pleased to announce that it has today agreed a conditional Placing to raise £250,000 (before the deduction of fees and expenses) through the issue of 221,238,938 ordinary shares at 0.113 pence per share (the "Placing"). The Placing is conditional on the approval of certain resolutions by Shareholders at a General Meeting of the Company, as further set out below. The Resolutions seek Shareholder approval to allow for a Capital Reorganisation to affect the Placing, seek to give Directors' authority to issue the Placing Shares and also propose certain Board changes. All resolutions proposed are inter-conditional.

Accordingly, the Company has today published the Circular which will be posted to Shareholders on 8 November 2019, along with the accompanying Form of Proxy in relation to a General Meeting of the Company.

The Circular contains notice of the General Meeting ("Notice"), which will be held at the offices of Peterhouse Capital Limited at 3rd Floor, 80 Cheapside, London EC2V 6EE at 10.00 a.m. on 26 November 2019. A copy of the Circular and the Form of Proxy will shortly be made available on the Company's website at www.mobilestreams.com.

The Placing is conditional, amongst other things, on the passing by shareholders of the resolutions set out in the Notice, further details of which are included below.

Application will be made to the London Stock Exchange for the New Ordinary Shares, including the Placing Shares, to be admitted to trading on AIM and, subject to approval of the Resolutions and appointment by the Company of a Nominated Adviser pursuant to AIM Rule 1, it is expected that Admission will become effective and that dealings in the New Ordinary Shares, including the Placing Shares, will commence on AIM at 8.00 a.m. on 27 November 2019.

The Letter from the Chairman of the Company, the Expected Timetable of Principal Events and the Placing Statistics contained in the Circular have been extracted and included as an Appendix to this announcement below.

 

For further information, please contact:

Mobile Streams plc                        +1 347 669 9068

Simon Buckingham, Chief Executive Officer                        

Enrique Benasso, Chief Financial Officer                               

Peterhouse Corporate Finance

Eran Zucker                                        +44 (0) 20 7469 0930

 

Appendix (all terms in the below have been extracted from the Circular)

LETTER FROM THE CHAIRMAN

 

1.      Introduction

 

The Company announced on 6 November 2019 a conditional placing with certain institutional and other investors, to raise £250,000 before expenses through the issue of 221,238,938 New Ordinary Shares at the Issue Price (referred to in this document as, the "Placing Shares").

The Placing Price is at a discount of approximately 24.6% per cent. to the closing middle market price of 0.15 pence per Existing Ordinary Share on 28 October 2019 (being the last practicable date before suspension of the Company's shares from trading on AIM).

The purpose of this document is to provide you with details of the Placing, to explain the background to and the reasons for the Placing and why the Directors recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. As the Placing Price is below the nominal value of the Company's Existing Ordinary Shares, the Company needs to effect the Share Reorganisation to facilitate the Placing, and further details of the Share Reorganisation are set out in paragraph 5 below. In addition, the Company currently has insufficient authority to issue the Placing Shares and is seeking Shareholder approval to give the Directors the authority to allot the Placing Shares and to dis-apply statutory pre-emption rights in respect thereof.

Furthermore, the Company proposes to issue 28,500,000 New Ordinary Shares to Simon Buckingham, CEO, in satisfaction of  accrued director's fees amounting to £100,860 (the "Settlement Shares"), as a result which, Simon Buckingham  would be interested in 44,618,650 New Ordinary Shares representing 11.43% of the Company's Enlarged Share Capital. The issue of the Settlement Shares would be a related party transaction under AIM Rule 13 and accordingly the Directors independent of the transaction, being Peter Tomlinson and Jonathan Bill, will, prior to the issue of these shares liaise with the Company's Nominated Adviser, when appointed, with a view to considering whether the terms are fair and reasonable as far as Shareholders are concerned. A further announcement will be made in this regard in due course.

The Placing and Share Reorganisation are each conditional, inter alia, on the passing of the Resolutions by Shareholders at the General Meeting, notice of which is set out at the end of this document. If the Resolutions are passed, admission of the Placing Shares to trading on AIM is expected to occur at 8.00 a.m. on 27 November 2019.

2.      Background to and reasons for the Placing

As detailed in the Company's announcement of 30 September 2019, Shareholders voted against the Company delisting from AIM and we have been working to appoint new advisers to retain the Company's AIM listing. As part of this process, the Company has identified a near term requirement for additional funding. Furthermore, trading at the Company's existing operations remains challenging with an expected EBITDA loss for the three months to September 2019 of £36,000.

Accordingly, the proposed Placing meets the requirement to provide working capital for the Group whilst the issue of the Settlement Shares will extinguish a significant amount of the Group's indebtedness. In addition, to provide the Group with a second, complementary revenue stream, the Company has today reached agreement in principle with Krunchdata Ltd ("Krunch") whereby it has agreed with Krunch to licence the Krunch platform as more specifically detailed below. The Company currently has approximately 2 billion 'data sets' accumulated over the last 15 years. It anticipates that it can utilise the Krunch platform to monetise this data in the regions in which it operates, being Argentina, India and Mexico.

Subject only to the finalisation of formal legal documentation, the Company has agreed to a licence with Krunch on a revenue share basis; specifically, in the initial 12 months the Company will retain all incremental revenue generated by its partnership with Krunch whilst paying Krunch the standard client set-up fees recharged at cost and thereafter on an agreed split of revenue basis.

About Krunch:

Krunch.ai is a business intelligence and insight platform that has been developed over the last two years. Pulling together cutting edge intelligence into a single place, so users can track performance and discover real-time information, the platform provides immediate data intelligence, insight & automation. Krunch builds data stories for organisations enabling faster growth through clearer information. The insight available from millions of Mobile Streams data records will add both behavioural and credit insights which the Board expects will provide companies with powerful data driven intelligence for personalised targeting and decision making.  Clients currently using the Krunch platform include Mortgages for Businesses, The Disasters & Emergency Committee and Unite the Union.

As part of the agreement with Krunch, it is proposed that Mark Epstein joins the Board as Chief Operating Officer and Tom Gutteridge and Annabel Jamieson, co-founders of Krunch alongside Mark, join the Company as part-time employees to assist with the development of this new revenue stream.

Accordingly, the Directors intend to use the Placing proceeds to support the proposed new venture with Krunch, to assist with growth of the Company's current mobile gaming business, and to provide working capital. The use of proceeds of the Placing are set out in paragraph 6 below.

The Directors believe the Placing to be the most appropriate way to provide the capital necessary to meet the Company's future requirements. As at 5 November 2019, the Company held cash and cash equivalents of approximately £63,000 (unaudited), and had external debt of approximately £106,000.

The Placing is being conducted with the intention of minimising the associated costs, both direct and in terms of limited management time. Taking that into account, the Company has reluctantly decided not to make an offer for subscription to the Shareholders on this occasion.

3.      Details of the Placing

 

3.1.  Placing

As announced on 6 November 2019 the Company has conditionally raised £250,000 before expenses through the Placing. Application will be made to the London Stock Exchange for the New Ordinary Shares, including the Placing Shares, to be admitted to trading on AIM and, subject to approval of the Resolutions and appointment by the Company of a Nominated Adviser pursuant to AIM Rule 1, it is expected that Admission will become effective and that dealings in the New Ordinary Shares, including the Placing Shares, will commence on AIM at 8.00 a.m. on 27 November 2019. Assuming no options are exercised prior to Admission, the Placing Shares will represent approximately 56.7% of the ordinary share capital of the Company in issue immediately following Admission.

In addition, it is proposed that 28,500,000 New Ordinary Shares will be issued in satisfaction of accrued fees amounting to £100,680 to Simon Buckingham, Chief Executive Officer. Additionally, the Company will issue Peterhouse with broker warrants over 5% of the number of Ordinary Shares issued in relation to the Placing or any subsequent fundraising by Peterhouse, exercisable at the relevant Placing Price and valid for one year.

3.2.  General

All Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Ordinary Shares in issue from time to time, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

For details as to the expected date and times by which certain events (e.g. Admission, the crediting of CREST accounts and the dispatch of share certificates) are expected to happen in relation to the Placing Shares and the Share Reorganisation, please refer to the information on page 4 (Expected Timetable of Principal Events) of this document.

4.      Prospective Board and Senior Management Changes

Conditional on the approval of the Resolutions at the General Meeting and completion of the proposed Placing and subject to and following approval from the Company's prospective Nominated Advisor, it is intended that Mark Epstein, Charles Goodfellow and Nigel Burton will join the Board as Chief Operating Officer, Non-Executive Director and Chairman respectively.

Charles Edouard Goodfellow 

Charles Goodfellow has over 30 years' experience in the London capital markets, having worked initially in equity sales and then in corporate finance for various London investment banks and corporate finance specialists. He specialises in assisting smaller companies across a range of sectors in raising growth capital, as well as targeting industry partners capable of taking strategic stakes and control.

 

Nigel John Burton

Following over 14 years as an investment banker at leading City institutions including UBS Warburg and Deutsche Bank, including as the Managing Director responsible for the energy and utilities industries, Nigel spent 15 years as Chief Financial Officer or Chief Executive Officer of a number of private and public companies. Nigel is currently a Non-Executive Director of AIM listed companies Remote Monitored Systems plc, Digitalbox plc, Regency Mines plc and Alexander Mining plc.

Mark Alexander Epstein, Chief Operating Officer

Mark is an experienced CEO, director, entrepreneur, expert in marketing, communications, technology and mobile. Mark is the co-founder of Krunch.ai a next generation insight and intelligence platform, IgniteAMT a digital transformation company and IgniteCAP an incubation and investment business. Mark also co-founded and was CEO on its AIM listing of The People's Operator PLC, a cause-based mobile phone network that had operations the UK and USA. Prior to that Mark co-founded Mass1 which he grew into one of the UK's most successful campaign agencies. He has also held numerous senior management positions in his career.   

 

Subject to the passing of each of the Resolutions, Jonathan Bill will step down from the board while Peter Tomlinson will assume the role of Non-Executive Director. Charles Goodfellow will be appointed as Non-Executive Director and Nigel Burton will be appointed as Chairman. Simon Buckingham will remain as Chief Executive Officer.

Senior Management

Annabel Jamieson

Annabel Jamieson is a digital marketing and tech strategist with over 25 years' experience working in the digital environment driving transformation and growth, managing budgets in excess of £25 million, latterly holding senior global exec positions within publishing companies including DMGT and DeAgostini. Annabel is a keynote speaker and has spoken at conferences across UK, Europe and North America. She is a Co-founder and Director of IgniteAMT which specialises in digital transformation services, as well as IgniteCAP a private incubation and investment business.

 

Tom Gutteridge

Tom is a multiple award-winning technologist who has over 20 years' experience building ideas, products and businesses. As a digital pioneer, he built his experience through creating engagement technologies for brands such as Nokia, Pepsi, Vodafone, Sony and Adobe and was voted one of Marketing Weeks Rising Stars. He moved onto to pursue his own ventures, co-founding and listing the world's first Ethical Mobile Phone Network, co-founding the UKs largest digital voter registration project and co-founding multiple digital agencies that work with clients such as Channel 4, WWF and NHS.

The regulatory disclosures in respect of the appointment of Nigel, Mark and Charles to the Board, as required by AIM Rule 17, will be provided shortly before or on their appointment to the Board.

5.      Share Reorganisation

 

5.1.  General

The nominal value of the Existing Ordinary Shares is currently 0.2 pence per share. As a matter of English law, the Company is unable to issue the Placing Shares at an issue price which is below their nominal value. It is therefore proposed to sub-divide the entire existing share capital, both issued and to be issued, consisting of 140,752,533 Ordinary Shares of 0.2 pence nominal value each, into 140,752,533 Ordinary Shares of 0.01 pence nominal value each and 140,752,533 Deferred Shares of 0.19 pence nominal value each, thus enabling the Company to lawfully implement the Placing at the Issue Price. As a result, the Company's articles of association will be required to be updated to reflect the proposed new share structure of the Company following the Share Reorganisation.

Each New Ordinary Share resulting from the Share Reorganisation will have the same rights (including voting and dividend rights and rights on a return of capital) as each Existing Ordinary Share except that they will have a nominal value of 0.01 pence each.

The Deferred Shares will, as their name suggests, have very limited rights which are deferred to the Ordinary Shares and will effectively carry no value as a result. Accordingly, the holders of the Deferred Shares will not be entitled (unless they also hold Ordinary Shares) to receive notice of, attend or vote at general meetings of the Company, nor be entitled to receive any dividends or any payment on a return of capital until at least £10,000,000 has been paid on each Ordinary Share. No application will be made for the Deferred Shares to be admitted to trading on AIM.

The Company will also be given power to arrange for all the Deferred Shares to be transferred to a custodian or to be purchased for nominal consideration only without the prior sanction of the holders of the Deferred Shares. No share certificates for the Deferred Shares will be issued.

No new certificates for the Existing Ordinary Shares will be dispatched if the Share Reorganisation becomes effective.

A request will be made to the London Stock Exchange to reflect on AIM the sub-division of the Existing Ordinary Shares into New Ordinary Shares of 0.01 pence each. Each Existing Ordinary Share standing to the credit of a CREST account will be subdivided into one New Ordinary Share of 0.01 pence and one Deferred Share of 0.19 pence at 6 p.m. on 26 November 2019.

Following the Share Reorganisation, the ISIN code for the Ordinary Shares will remain unchanged.

5.2.  Taxation

Any person who is in any doubt as to his tax position or who is subject to tax in a jurisdiction other than the United Kingdom is strongly recommended to consult his professional tax adviser immediately.

6.      Use of Proceeds

The Company is raising funds to:

i)             fund the marketing and associated development costs of the Krunch joint venture;

ii)            provide funds to increase the marketing budget for the Company's existing mobile gaming business; and

iii)           fund general working capital.

To make the most effective use of the proceeds, each of Nigel Burton, Peter Tomlinson, Charles Goodfellow, Mark Epstein, Annabel Jamieson and Tom Gutteridge have agreed to accept payment for their services in New Ordinary Shares, subject to deduction and payment of all necessary taxes, until such time as the Directors are satisfied that the Company is able to make these payments out of operating cashflow. These New Ordinary Shares will be issued at the end of December and June on an accrued basis and at a price based on the volume weighted average price ("VWAP") of the Ordinary Shares traded during the relevant six month periods.

7.      Nominated Adviser and Broker

Following the resignation of the Company's former Nominated Adviser and Broker, N+1 Singer, trading in the Company's Ordinary Shares on AIM was suspended under AIM Rule 1 on 28 October 2019. The Company has arranged to appoint a replacement Nominated Adviser subject inter alia to the passing of all Resolutions at the General Meeting, such appointment to become effective following the General Meeting. On this basis, it is expected that, should the Resolutions be passed at the General Meeting, trading in the New Ordinary Shares will commence on 27 November 2019.

 

In addition, the Company has today appointed Peterhouse Capital as Broker with immediate effect.

8.      Shareholder Approval

The Company is seeking Shareholder approval at the General Meeting to:

(a)  amend the articles of association of the company to reflect the share structure of the Company following the Share Reorganisation;

(b)  effect the Share Reorganisation; and

(c)   give the Directors the authority to allot New Ordinary Shares up to an aggregate nominal value of £35,000 and to dis-apply statutory pre-emption rights in respect thereof; and

(d)  Appoint Mark Epstein, Charles Goodfellow and Nigel Burton as directors of the Company.

In order to obtain the necessary Shareholder approval, a General Meeting of the Company is to be held at which the Resolutions will be proposed. Further information regarding the General Meeting is set out in paragraph 9 below.

The Directors believe the Placing to be the most appropriate way to provide the capital necessary to meet the Company's future requirements. Should the Placing not proceed for any reason, the Company would need to find alternative funding and face future uncertainty. The Directors urge Shareholders to vote in favour of the Resolutions set out in the Notice.

9.      General Meeting

A notice convening the General Meeting to be held at the offices of Peterhouse Capital Limited at 3rd Floor, 80 Cheapside, London, EC2V 6EE, at 10.00 a.m. on 26 November 2019 is set out at the end of this document.

10.   Action to be taken by Shareholders

Whether or not you intend to be present at the meeting you are requested to complete a proxy vote You will find enclosed with this Document a Form of Proxy for use at the General Meeting. Whether or not you propose to attend the General Meeting in person, you are requested to complete and return the Form of Proxy to the Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, in accordance with the instructions printed thereon as soon as possible but, in any event, to be received no later than 10.00 a.m. on 22 November 2019. Completion and return of a Form of Proxy will not preclude you from attending and voting at the General Meeting in person if you so wish.

 

11.   Recommendation

The Directors consider that the Placing will promote the success of the Company for the benefit of its members as a whole. Accordingly, the Directors unanimously recommend and strongly urge Shareholders to vote in favour of the Resolutions at the General Meeting as they intend to do in respect of their own beneficial holdings of 45,702,062 Ordinary Shares representing approximately 12.22 per cent. of the Existing Ordinary Shares in issue as at the last practicable date before publication of this document.

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2019
Announcement of the General Meeting	6 November
Date of publication of this document	5 November
Date of posting of this document	8 November
Last date and time for receipt of Forms of Proxy	10.00 a.m. 22 November
General Meeting	10.00 a.m. 26 November
Share Reorganisation effective	6.00 p.m. 26 November
Creation of the Deferred Shares	6.00 p.m. 26 November
Admission and commencement of dealings in Placing Shares (and Ordinary Shares (post Share Reorganisation)) on AIM	8.00 a.m. 27 November
CREST accounts credited with Placing Shares in uncertificated form	27 November
No new share certificates will be issued in relation to the Existing Ordinary Shares.

 

 

If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of a Regulatory Information Service announcement. All events listed in the above timetable following the General Meeting are conditional on the passing of the resolutions at the General Meeting.

References to time in this document and the Notice of General Meeting are to Greenwich Mean Time.

 

KEY STATISTICS

 

Existing Ordinary Shares in issue as at the date of the Document	140,752,533
Par value of Existing Ordinary Shares	0.2 pence
Number of Ordinary Shares following the Share Reorganisation	140,752,533
Par value of the New Ordinary Shares following the Share Reorganisation	0.01 pence
Par value of the Deferred Shares following the Share Reorganisation	0.19 pence
New Ordinary Shares to be issued as part of the Placing	221,238,938
New Ordinary Shares to be issued for fees and in satisfaction of accrued liabilities in relation to the Proposals	28,500,000
Enlarged Share Capital following the Placing and the Share Reorganisation	390,491,471
Placing Shares as a percentage of the Enlarged Share Capital	56.7 per cent.
Placing Price of the New Ordinary Shares	0.113 pence
Expected market capitalisation following the Share Reorganisation and Placing	£441,256
Gross proceeds of the Placing	£250,000

 

Notes:

The figures assume that no options are exercised prior to Admission.

 

DEFINITIONS

 

The following definitions apply throughout this announcement unless the context otherwise requires:

"Act"	the Companies Act 2006;
"Admission"	the admission of the Placing Shares to trading on AIM having become effective in accordance with the AIM Rules;
"AIM"	the AIM Market, a market operated by the London Stock Exchange;
"AIM Rules"	together, the rules published by the London Stock Exchange governing the admission to, and the operation of, AIM, consisting of the AIM Rules for Companies (including the guidance notes thereto) and the AIM Rules for Nominated Advisers, published by the London Stock Exchange from time-to-time;
"Articles"	the articles of association of the Company (as amended from time to time);
"Board" or "Directors"	the board of directors of the Company, as at the date of this document, whose names are set out on page 8 of this document;
"Circular" or "this Document"	this document, including the Notice at the end of this document and the Form of Proxy;
"City Code"	City Code on Takeover and Mergers;
"Company" or "Mobile Streams Plc"	Mobile Streams Plc, incorporated and registered in England & Wales under the Companies Act 1985, with registered number 03696108;
"CREST"	the relevant system for paperless settlement of share transfers and the holding of shares in uncertificated form, which is administered by Euroclear UK & Ireland Limited;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (S.I. 2001/3755), as amended from time to time;
"Deferred Shares"	deferred shares of 0.19 pence each in the capital of the Company following the passing of the Resolutions;
"Effective Time"	6.00 p.m. on 26 November 2019 (or, if the General Meeting is adjourned, 6.00 p.m. on the date of the adjourned General Meeting);
"Enlarged Share Capital"	the 390,491,471 New Ordinary Shares in issue following the Placing, Share Reorganisation and issue of the Settlement Shares
"Existing Ordinary Shares"	the 140,752,533 ordinary shares of 0.2 pence each in issue at the date of this document;
"FCA"	the Financial Conduct Authority, in its capacity as the UK Listing Authority;
"Form of Proxy"	the form of proxy for use by the Shareholders in connection with the General Meeting
"General Meeting" or "GM"	the General Meeting of the Shareholders of the Company to be held at 10.00 a.m. on 26 November 2019 at the office of Peterhouse Capital Limited at 3rd Floor, 80 Cheapside, London, EC2V 6EE;
"Group"	the Company together with its subsidiaries, both directly and indirectly owned;
"Issue Price"	0.113 pence per Placing Share;
"London Stock Exchange"	London Stock Exchange plc;
"New Ordinary Shares"	the ordinary shares of 0.01 pence each in the capital of the Company upon the Share Reorganisation becoming effective at the Effective Time;
"Notice"	the notice of the General Meeting, which is set out at Part II of this document;
"Ordinary Shares"	ordinary shares in the capital of the Company having a nominal value of 0.2 pence each prior to the Share Reorganisation becoming effective at the Effective Time and having a nominal value of 0.01 pence upon the Share Reorganisation becoming effective at the Effective Time;
"Placee"	a subscriber for Placing Shares under the Placing;
"Placing"	the conditional placing of the Placing Shares by Peterhouse with certain institutional and other investors at the Issue Price;
"Placing Shares"	the 221,238,938 New Ordinary Shares to be issued pursuant to the Placing;
"Proposals"	The Placing, the Share Reorganisation, the appointment of Mark Epstein, Charles Goodfellow, and Nigel Burton as directors of the Company, and the adoption of the amended Articles;
"Registrars"	Computershare Investor Services PLC;
"Resolutions"	the resolutions to approve the Proposals, which are set out in the Notice at the end of this document;
"Settlement Shares"	the 28,500,000 New Ordinary Shares to be issued to Simon Buckingham, CEO, in satisfaction of £100,860 of accrued director's fees;
"Share Reorganisation"	the proposed subdivision of each Existing Ordinary Share with a nominal value of 0.2 pence into one New Ordinary Share with a nominal value of 0.01 pence and one Deferred share with a nominal value of 0.19 pence, further details of which are set out in paragraph 5 of the Letter from the Chairman in this document;
"Shareholder(s)"	holder(s) of the Ordinary Shares;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland; and
"Uncertificated" or "in Uncertificated Form"	recorded on the register of Ordinary Shares as being held in uncertificated form in CREST, entitlement to which by virtue of the CREST Regulations, may be transferred by means of CREST.

 

END.