TIDMGFIN
RNS Number : 8060I
Gfinity PLC
09 August 2023
THIS ANNOUNCEMENT (INCLUDING THE APPICES) AND THE INFORMATION
HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE,
TRANSMISSION, DISTRIBUTION OR FORWARDING DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,
THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN
WHICH SUCH PUBLICATION, TRANSMISSION, RELEASE, DISTRIBUTION OR
FORWARDING WOULD BE UNLAWFUL.
For immediate release
9 August 2023
Gfinity PLC
("Gfinity" or the "Company")
Fundraising
Proposed Board changes
Proposed share capital reorganisation
Change of adviser
Summary
The Board of Gfinity plc (AIM:GFIN) is pleased to announce that
the Company has today conditionally raised GBP450,000 through a
Company arranged Subscription at a price of 0.06 pence per New
Ordinary Share (the "Issue Price"). The Subscription is conditional
on the passing of the resolutions to be proposed at a General
Meeting ("Resolutions").
As the Company's Existing Ordinary Shares have a nominal value
of 0.1 pence at present, to enable the Company to issue shares
pursuant to the Subscription at 0.06 pence per share, the Company
is proposing to undertake a Share Capital Reorganisation, pursuant
to which each Existing Ordinary Share of 0.1 pence currently in
issue will be subdivided into one New Ordinary Share of 0.01 pence
each and one Deferred Share of 0.09 pence each.
The recently announced restructuring has allowed the Company to
focus on its digital media business, Gfinity Digital Media, which
has a significant position in the Gamer website industry . To
support that strategy, the Company is proposing certain Board
changes:
-- David Halley will be joining the Company as Chief Executive
Officer on completion of the customary regulatory checks under the
AIM Rules.
-- Jonathan Hall ceases to be a director with immediate effect
and the Board would like to thank Jonathan for his significant
contribution to the Company since it was first admitted to AIM, and
to wish him well for the future. In the interim he will continue in
his role as Company Secretary until a new appointment is made.
The Company has today appointed Beaumont Cornish Limited ("BCL")
as the Company's Nominated Adviser and Broker with immediate
effect.
A circular, containing further details of the Subscription and
the Share Capital Reorganisation and notice of a General Meeting
to, inter alia, approve the Resolutions required to implement the
Subscription and the Share Capital Reorganisation, is expected to
be published and despatched to Shareholders shortly and a further
announcement will be made in due course.
Fundraising
The Company has today conditionally raised GBP450,000 (before
expenses) through the Company arranged Subscription at the Issue
Price. The Subscription is conditional on the passing of the
Resolutions. The Issue Price compares to the 10-day volume weighted
average price per share of 0.94 pence for the period ended on 8
August 2023 (being the Last Practicable Date prior to the
announcement of the Subscription). Subject to shareholder approval,
the Company will issue 750,000,000 New Ordinary Shares
("Subscription Shares") pursuant to the Subscription which will
rank pari passu with the New Ordinary Shares arising on the Share
Capital Reorganisation as described above. Application will be made
for admission of the Subscription Shares and the New Ordinary
Shares resulting from the Share Capital Reorganisation to trading
on AIM subject to the passing of the Resolutions.
Current trading and use of proceeds
On 31 March 2023, the Company announced its half year results
for the six-month period ended 31 December 2022. These results
reported revenue of GBP4.1 million, an adjusted operating loss of
GBP0.8 million and a period-end cash of GBP1.7m, supplemented by a
post period-end placing and subscription, raising GBP2.0 million
before expenses.
Following the divestment of 72.5% of Athlos, the closure of the
Esports Solutions Division and associated significant cost
reductions across the business, the Directors believe that the
business has now stabilised. As at 4 August 2023, the Company's
cash amounted to approximately GBP205,000.
Given the restructuring as described above, the Company will be
reviewing in accordance with normal year-end procedures, the
carrying cost of goodwill in its next audited Accounts to 30 June
2023 and it is likely that a substantial part of the goodwill
(which stood at GBP4.7m as per the last published balance sheet as
at 31 December 2022) will be written off, which would also be
reflected as a charge to the Income Statement.
The net proceeds from the Subscription are intended to fund the
immediate day-to-day working capital needs of the Company's media
business and the ongoing cost of its AIM listing. The Directors are
targeting cash break-even and attracting a monthly audience of 10m+
monthly active users over the next six months. Gfinity has invested
extensively in its tech content platform and, more recently in the
deployment of artificial intelligence ("AI"). Combined with more
effective use of "ad-tech" to boost CPM rates and direct
advertising, the Board believes it can create a market leader in
the gaming digital media space.
If the Resolutions are not passed at the General Meeting, the
Subscription will not proceed in the form currently envisaged, with
the result that the anticipated net proceeds of the Subscription
will not become available. The Directors would as a result need to
consider urgently alternative sources of funding to meet its
immediate working capital needs, including a trade sale of its
operating subsidiary. There is no assurance that any such
alternative funding arrangements could be put in place in the
timescale required, which would have a materially adverse effect on
the Company.
Share Capital Reorganisation
A company is not permitted under the Companies Act 2006 to issue
shares with an issue price which is below their nominal value. The
Company's Existing Ordinary Shares have a nominal value of 0.1
pence at present and to enable the Company to issue shares pursuant
to the Subscription at 0.06 pence per share, the Company is
proposing to undertake the Share Capital Reorganisation, pursuant
to which each Existing Ordinary Share currently in issue will be
subdivided into one New Ordinary Share of 0.01 pence each and one
Deferred Share of 0.09 pence each.
Immediately following the Share Capital Reorganisation, the
number of New Ordinary Shares in issue will be the same as the
number of Existing Ordinary Shares currently in issue, in each case
excluding the Subscription Shares, which as at the date of this
announcement is 2,649,029,913. Accordingly, immediately following
the Share Capital Reorganisation and before completion of the
Admission of the Subscription Shares, 2,649,029,913 New Ordinary
Shares and 2,649,029,913 Deferred Shares will be in issue.
Application will be made for Admission to trading on AIM for the
New Ordinary Shares arising on the Share Capital Reorganisation,
which on Admission will have the same rights as those currently
attaching to the Existing Ordinary Shares under the Articles,
including the rights relating to voting and entitlement to
dividends. New share certificates for New Ordinary Shares will not
be issued and the existing certificates are expected to remain
valid.
Holders of warrants over Existing Ordinary Shares will maintain
the same rights as currently accruing to them, subject to
adjustment of their subscription rights in respect of the New
Ordinary Shares, on the terms of the Existing Warrant Instrument,
to reflect the Share Capital Reorganisation. As such, upon
completion of the Share Capital Reorganisation, each Existing
Warrant will entitle its holder to subscribe for one New Ordinary
Share and one Deferred Share, subject to the terms and conditions
set out in the Existing Warrant Instrument.
The Deferred Shares will have no substantive rights attached to
them and, accordingly, will not carry the right to vote or to
participate in any distribution of surplus assets. They will not be
admitted to trading on AIM and will effectively carry no value.
The holders of the Deferred Shares will be deemed to have given
an irrevocable authority to the Company at any time to: (i) appoint
any person, for and on behalf of such holder, to, among other
things, transfer some or all of the Deferred Shares (at nil
consideration) to such person(s) as the Company may determine; and
(ii) purchase or cancel such Deferred Shares. In addition, the
Company may purchase all of the Deferred Shares, at a price not
exceeding GBP1 in aggregate.
As part of this process, the Articles will need to be amended to
set out the rights and restrictions attaching to the Deferred
Shares and the existing share authorities will need to be replaced.
A special resolution in the Notice of General Meeting will propose
the necessary amendments to the Articles and will set out the
rights attaching to the Deferred Shares, details of which will be
set out in the Notice of General Meeting.
General Meeting
A circular, containing further details of the Subscription and
the Share Capital Reorganisation and notice of the General Meeting
to, inter alia, approve the Resolutions required to implement the
Subscription and the Share Capital Reorganisation, is expected to
be published and despatched to Shareholders shortly and a further
announcement will be made in due course (the "Circular"). Following
its publication, the Circular will be available on the Group's
website.
Proposed Board changes
As previously announced on 6 June 2023, the Company announced
that it had sold 72.5% of Athlos to Tourbillon Group UK Limited and
the closure of its Esports division, as the market for esports
remained soft and the Directors saw limited profitable growth
opportunities. This restructuring has allowed the Company to focus
on its digital media business, Gfinity Digital Media, which has a
significant position in the Gamer website industry. Accordingly,
the Company is proposing certain Board changes to support its new
strategy.
David Halley will be joining the Company as Chief Executive
Officer on completion of the customary regulatory checks under the
AIM Rules. David has over 25 years' experience spanning banking,
hedge funds and insurance, incorporating risk management and
trading roles. He founded and served as the CIO of Capstone
Financial (HK) Ltd, founded a crypto related insurance broker and
has previously been a member of the investment management team for
Man-Vector Limited, a commodity trading advisor (CTA) hedge fund
that was part of the Man Group. David Halley served as the Risk
Manager for the fund. David is currently a director of Tourbillon
Group UK Limited which, as announced in June this year, acquired
72.5 per cent. of the Company's gaming subsidiary, Athlos. On
appointment to the Board, David Halley will not receive any direct
monetary remuneration in place of which the Company intends to make
a significant award of share options to him to subscribe for New
Ordinary Shares at the Issue Price.
Jonathan Hall ceases to be a director with immediate effect and
the Board would like to thank Jonathan for his significant
contribution to the Company since it was first admitted to AIM, and
to wish him well for the future. In the interim he will continue in
his role as Company Secretary until a new appointment is made .
Following the appointment of David Halley, Neville Upton will
revert to his previous role of non-executive Chairman.
Change of Adviser
The Company has today appointed Beaumont Cornish Limited ("BCL")
as the Company's Nominated Adviser and Broker with immediate
effect.
Directors' and Proposed Director's Participation and Related
Party Subscription
The directors are not participating in the Subscription. David
Halley, a proposed director, has participated in the Subscription
by subscribing for 66,666,667 New Ordinary Shares, representing
1.96% in the Company's Enlarged Share Capital on Admission.
Robert Keith is subscribing for 333,333,333 Subscription Shares
pursuant to the Subscription. Robert Keith is currently interested
in 12.02% of the Company's Ordinary Shares held by him directly and
indirectly.
The subscription by Robert Keith for the Subscription Shares is
therefore a related party transaction pursuant to rule 13 of the
AIM Rules for Companies. Accordingly, the Directors consider,
having consulted with the Company's nominated adviser, Beaumont
Cornish, that the subscription for the Subscription Shares by
Robert Keith which is on the same terms and conditions as for the
other subscribers, is fair and reasonable insofar as Gfinity's
Shareholders are concerned.
Other Information
Further information is available from the Company's website
which details the company's project portfolio as well as a copy of
this announcement: www.gfinityplc.com
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 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
The person who arranged for the release of this announcement on
behalf of the Company was Neville Upton, Executive Chairman and
Director.
Enquiries:
Gfinity Plc Neville Upton, ir@gfinity.net
Executive Chairman
Beaumont Cornish Limited Roland Cornish +44 (0)207 628 3369
Nominated Adviser Michael Cornish www.beaumontcornish.co.uk
and Broker
Important Notice
Beaumont Cornish Limited (" Beaumont Cornish "), which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting as nominated adviser to the Company in
connection with the proposed admission of the Subscription Shares
and the New Ordinary Shares arising from the Share Capital
Reorganisation to trading on AIM and the proposals described in
this document. It will not regard any other person as its client
and will not be responsible to anyone else for providing the
protections afforded to the clients of Beaumont Cornish or for
providing advice in relation to such proposals. Beaumont Cornish
has not authorised the contents of, or any part of, this document
and no liability whatsoever is accepted by Beaumont Cornish for the
accuracy of any information or opinions contained in this document
or for the omission of any information. Beaumont Cornish as
nominated adviser to the Company owes certain responsibilities to
the London Stock Exchange which are not owed to the Company, the
Directors, Shareholders or any other person.
The New Ordinary Shares referred to in this document have not
been and will not be registered under the US Securities Act of
1933, as amended (the "Securities Act") and may not be offered or
sold in the United States except pursuant to an exemption from, or
in a transaction not subject to, the requirements of the Securities
Act. There will be no public offer of the New Ordinary Shares in
the United States, the United Kingdom or elsewhere. The New
Ordinary Shares are being offered and sold outside the United
States in reliance on Regulation S under the Securities Act. The
New Ordinary Shares have not been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission
or other regulatory authority, nor have the foregoing authorities
passed upon or endorsed the merits of this offering. Any
representation to the contrary is a criminal offence in the United
States and any re-offer or resale of any of the New Ordinary Shares
in the United States or to a US Person may constitute a violation
of US law or regulation.
The distribution of this document and the offering or sale of
the New Ordinary Shares in certain jurisdictions may be restricted
by law. No action has been taken by the Company or Beaumont Cornish
that would permit an offering of the New Ordinary Shares or
possession or distribution of this document or any other offering
or publicity material relating to the New Ordinary Shares in any
jurisdiction where action for that purpose is required. Persons
into whose possession this document comes are required by the
Company and Beaumont Cornish to inform themselves about and to
observe any such restrictions.
This document is directed only at members of the Company falling
within the meaning of Article 43(2)(a) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(all such persons together being referred to as "Relevant
Persons"). This document must not be acted on or relied on by
persons who are not Relevant Persons. This document does not
constitute an offer of securities and accordingly is not a
prospectus, neither does it constitute an admission document drawn
up in accordance with the AIM Rules.
FORWARD LOOKING STATEMENTS
This document includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, or any statements preceded by,
followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or "similar" expressions or negatives thereof.
Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this document. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based unless it is required to do so
by applicable law or the AIM Rules.
APPIX 1
SUBSCRIPTION STATISTICS
Issue Price 0.06 pence
Number of Existing Ordinary Shares prior to Admission
of any of the Subscription Shares 2,649,029,913
Total number of Subscription Shares issued by the
Company pursuant to the Subscription 750,000,000
Gross proceeds of the Subscription GBP450,000
Enlarged Share Capital following completion of
the Subscription and Admission 3,399,029,913
Percentage of the Enlarged Share Capital comprised 22.1 per cent.
by the Subscription Shares
Number of Existing Warrants 1,373,053,334
ISIN GB00BT9QD572
SEDOL BT9QD57
APPIX 2
DEFINITIONS
"Act " the Companies Act 2006 (as amended);
"Admission" the admission of the Subscription Shares
and the New Ordinary Shares arising from
the Share Capital Reorganisation to trading
on AIM becoming effective in accordance
with the AIM Rules;
"AIM Rules" the AIM Rules for Companies, as published
and amended from time to time by the London
Stock Exchange;
"Articles" the articles of association of the Company
at the date of this announcement;
"Board" or "Directors" the directors of the Company as at the date
of this announcement;
" Beaumont Cornish Beaumont Cornish Limited, the Company's
" nominated adviser and broker pursuant to
the AIM Rules;
"Business Day" any day (other than a Saturday or Sunday)
upon which commercial banks are open for
business in London, UK;
"Company ", "Group" Gfinity plc;
or "Gfinity"
"CREST" the relevant system for the paperless settlement
of trades and the holding of uncertificated
securities operated by Euroclear in accordance
with the CREST Regulations;
"CREST member" a person who has been admitted by Euroclear
as a system-member (as defined in the CREST
Regulations);
"Deferred Shares" the deferred shares of 0.09 pence each in
the capital of the Company to be created
as part of the Share Capital Reorganisation;
"Enlarged Share the New Ordinary Shares in issue on Admission,
Capital " including the Subscription Shares;
"Euroclear" Euroclear UK & International Limited, the
operator of CREST;
"Existing Ordinary the 2,649,029,913 existing ordinary shares
Shares" of 0.1p each in the capital of the Company
as at the date of this announcement;
"Existing Warrants" the warrants over 1,373,053,334 Ordinary
Shares pursuant to the Existing Warrant
Instrument, granting warrant holders the
right to subscribe for Ordinary Shares in
the Company;
"Existing Warrant the warrant instrument entered into by the
Instrument" Company, dated 6 March 2023;
"FCA" the Financial Conduct Authority;
"FSMA" the Financial Services and Markets Act 2000
(as amended);
"General Meeting the general meeting of Shareholders to be
" or "GM" held notice of which will be set out in
a circular;
"ISIN" International Securities Identification
Number;
"Issue Price" 0.06 pence per New Ordinary Share;
"Last Practicable 8 August 2023;
Date"
"Link" or "Link a trading name of Link Asset Services Limited,
Group" registrar to the Company;
"London Stock Exchange" London Stock Exchange plc;
"New Ordinary Shares" the ordinary shares of 0.01 pence each in
the capital of the Company in issue following
completion of the Share Capital Reorganisation;
"Notice of General the notice of General Meeting to set out
Meeting " in the Circular;
"Ordinary Shares" the ordinary shares of 0.1p each in the
capital of the Company, prior to the Share
Capital Reorganisation;
"Registrars" Link Group;
"Resolutions" the resolutions to be set out in the Notice
of General Meeting to be proposed at the
General Meeting;
"Restricted Jurisdiction" each and any of the United States of America,
Australia, Canada, Japan, New Zealand, Russia,
and the Republic of South Africa and any
other jurisdiction where extension or availability
of the Subscription would breach any applicable
law or regulations;
"Share Capital Reorganisation" the sub-division of each Existing Ordinary
Share into one New Ordinary Share and one
Deferred Share to be effected by the passing
of the Resolutions;
"Shareholder(s) holder(s) of Existing Ordinary Shares;
"
"sterling", "pounds the lawful currency of the United Kingdom
sterling", and "GBP",
"pence" or "p"
"Subscribers" the persons who have conditionally agreed
to subscribe for the Subscription Shares;
"Subscription" the subscription for the Subscription Shares
at the Issue Price as described in this
announcement;
"Subscription Shares" the 750,000,000 New Ordinary Shares to be
subscribed for by persons who have entered
or intend to enter into subscription letters
with the Company; and
"US Securities Act" the United States Securities Act of 1933
(as amended).
ENDS
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END
MSCGCGDILXGDGXC
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August 09, 2023 05:54 ET (09:54 GMT)
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