IMJ Imjack

 

TIDMIMJ 
 
RNS Number : 3096M 
imJack PLC 
20 May 2010 
 
 
                              imJack plc (AIM: IMJ) 
                                ("The Company") 
 
 
                                  Board Changes 
 
                            Publication of Circular 
 
          Proposed placing of Ordinary Shares to raise GBP1.0 million 
 
            Issue of Convertible Loan Stock to raise GBP0.2 million 
 
            Proposed acquisition of John Devonshire Connect Limited 
 
                   Proposed acquisition of Tellbrook Limited 
 
          Conversion of Directors' Loans to be capitalised into equity 
 
  Conversion of debts owed to certain creditors to be capitalised into equity 
 
Approval of waiver of obligations under Rule 9 of the City Code on Takeover and 
                                    Mergers 
 
                            Notice of General Meeting 
 
                          Change of Nominated Adviser 
 
 
 
imJack plc ("imJack" or the "Company"), the digital educational secure 
networking business is pleased to announce that, further to the announcement 
made by the Company on 11 January 2010 in respect of the suspension of trading 
in its ordinary shares (the "Ordinary Shares") on AIM as a result of the 
financial uncertainty of the Company, it proposes to raise GBP1.2 million in 
aggregate, by means of a proposed placing (the "Placing") of 66,666,667 new 
Ordinary Shares at a price of 1.5 pence per new Ordinary Share (the "Placing 
Price") and the issue of convertible loan stock (the "Convertible Loan Stock") 
to raise GBP0.2 million. 
 
The Company is also pleased to announce the appointment of Mr Jeffrey Morris as 
interim Chief Executive Officer, with immediate effect. Further details in 
respect of Mr Morris pursuant to the AIM Rules are set out below in addition to 
the announcement of further board changes. The directors expect to strengthen 
the board in the near future through the appointment of a non-executive director 
following completion of the proposals set out below. 
 
Furthermore, the Company has today entered into conditional agreements for the 
acquisition of John Devonshire Connect Ltd ("JD Connect") and Tellbrook Ltd 
("Tellbrook"), the conversion of certain loans into Ordinary Shares, the 
conversion of certain outstanding creditor balances into Ordinary Shares which 
together with the Placing and other arrangements as set out below will be 
collectively described as the Proposals. 
 
To summarise, the Proposals comprise the following: 
·    Placing of new Ordinary Shares to raise GBP1.0 million; 
·    The issue of the Convertible Loan Stock to raise GBP0.2 million; 
·    The acquisition of JD Connect, the exclusive reseller of the ImJack 
technology platform; 
·    The acquisition of Tellbrook which owns the core underlying Intellectual 
Property ("IP")  of the business; 
·    The conversion of GBP1,065,000 of loans from Jeffrey Morris and connected 
parties into equity through the issue of 71,000,000 shares; 
·    The conversion of GBP61,113 of loans from Michael Abrahams into equity 
through the issue of 4,074,176  shares; 
·    The conversion of GBP30,000 owed to certain creditors of the Company into 
equity through the issue of 2,000,000 Ordinary Shares; 
·    The creditors voluntary arrangement ("CVA") of ImJack Secure Communications 
Limited ("ImJack Secure"), a wholly owned subsidiary of the Group releasing 
GBP653,423 owed to creditors from the balance sheet of ImJack Secure. 
 
A circular containing details of the Proposals together with a notice of general 
meeting to be held on 7 June 2010 has today been sent to the shareholders of the 
Company ("Shareholders") and is now available on the Company's website. 
 
It is important for Shareholders to understand the serious financial condition 
of the Company, which is the reason for the suspension from trading on AIM of 
the existing Ordinary Shares.  Should the independent shareholders decide not to 
support the resolutions set out in the notice of general meeting in relation to 
the Proposals (the "Resolutions") then they should be under no illusion as to 
the financial consequences for the Company. Should the Proposals not proceed to 
completion in their entirety ("Completion") then the Directors will have no 
alternative but to place the Company into administration because at that stage 
the Company would be unable to meet its debts as they are due. 
 
Currently the Company does not own the core underlying IP used by the Company 
but owns a worldwide, perpetual license to use it for education and training 
proposals. This means that the Company does not own outright the single most 
important asset required for its business and if the Company were to go into 
administration the license would automatically terminate thus depriving the 
Company of this asset. The IP also has applications in business and areas other 
than education. The Directors therefore believe that it is in the interests of 
the Company's shareholders to own the IP. 
 
In addition the Directors believe that the Proposals will greatly improve the 
prospects of the enlarged group following completion ("Enlarged Group") and will 
provide the following key strengths: 
 
·    increased confidence in the Company from the Specialist Schools and 
Academies Trust ("SSAT")  (see current trading and prospects below); 
·    provide the necessary working capital to achieve the Company's targeted 
sales to the schools; 
·    by acquiring JD Connect the Company will bring in-house the reseller rights 
in respect of the ImJack technology platform; 
·    create further opportunities for the Company 
 
Subject to the completion of the Proposals and the passing of the Resolutions, 
it is intended that application will be made to the London Stock Exchange to 
admit the new Ordinary Shares (the "New Ordinary Shares") to trading on AIM 
("Admission") and that trading in the Company's securities on AIM will be 
restored following this, subject to publication of the Company's audited 
accounts for the year ended 30 September 2009. Admission is expected to be on 8 
June 2010. 
 
 
 
THE PLACING AND USE OF PROCEEDS 
 
The Placing of 66,666,667 New Ordinary Shares at a placing price of 1.5 pence 
per Ordinary Share together with the issue of 4,666,667 New Ordinary Shares 
which have been pre-paid to the Company, are to be effected on behalf of the 
Company by Daniel Stewart. The net proceeds from the Placing will be used to 
provide working capital to assist organic growth, to pay creditors under the 
CVA, and to repay short term loans made to the company by Jeffrey Morris and 
connected parties for the purposes of funding the working capital needs of the 
Company in the weeks leading up to Admission.   The amount of short term loans 
that are expected to be repaid by Jeffrey Morris and connected parties from the 
Placing proceeds are expected to be in the region of GBP50,000 (the "Outstanding 
Loans") depending on the exact working capital needs of the Company between the 
date of this announcement and receipt of the Placing proceeds. 
 
Following repayment of the Outstanding Loans and the loan conversions set out 
below, the Company does not expect to have any significant debt other than the 
Convertible Loan Stock as set out below. 
 
BACKGROUND INFORMATION ON THE JD CONNECT ACQUISITION 
 
On 24th September 2008, the Company entered into a three year agreement with JD 
Connect under which JD Connect agreed to act as exclusive reseller of the ImJack 
technology platform in the UK and certain other regions, the effective result of 
which was that the revenue, net of costs, would be split on an agreed basis 
between JD Connect and the Company. 
 
On 5th June 2009 the Company entered into a call option agreement under which 
the Company was granted the option to purchase the shares in JD Connect at any 
time within 9 months to be satisfied by the issue of 10,000,000 Ordinary Shares 
and certain additional payments in cash or further Ordinary Shares if the 
Company achieved certain challenging targets. 
 
The Company proposes to purchase the entire issued share capital of JD Connect 
in consideration for the issue of 10,000,000 Ordinary Shares. To date, ImJack's 
platform has been donated to schools free of charge under the pilot PEER 
programme through JD Connect therefore, historically, JD Connect has had no 
material trading activity other than costs associated with sales people and it 
has no material assets and liabilities. 
 
BACKGROUND INFORMATION ON THE TELLBROOK ACQUISITION 
 
Tellbrook is a company which owns the Intellectual Property for which ImJack 
currently has an exclusive, perpetual worldwide royalty free license. On the 
terms of the licence agreement Tellbrook granted the Company an exclusive, 
perpetual, worldwide, royalty-free licence with regard to the development and 
use of ImJack collaborative communication software. The exclusive licence 
relates only to use of the software within the education and training sectors 
and the British Olympics Association website.  Incorporated into the licence is 
a right granted to Tellbrook to develop modifications to the software. 
Simultaneously with the entry of the Company into the exclusive licence the 
trade mark IMJACK was assigned by Tellbrook to the Company. 
 
The Company proposes to purchase Tellbrook in consideration for the issue of 
33,333,333 Ordinary Shares in order to bring the ownership of the Intellectual 
Property into the Enlarged Group. Tellbrook has no material assets and 
liabilities other than the IP. 
 
The Tellbrook acquisition constitutes a Related Party Transaction as defined by 
the AIM Rules for Companies.  The Independent Director considers, having 
consulted with the Company's nominated adviser, Daniel Stewart, that the terms 
of the Tellbrook Acquisition are fair and reasonable so far as the Shareholders 
are concerned. 
 
DIRECTORS' LOANS AND DIRECTORS DEALING 
 
Jeffrey Morris, Interim Chief Executive Officer of the Company, and connected 

Imjack (LSE:IMJ)
Historical Stock Chart
From May 2024 to Jun 2024

Imjack (LSE:IMJ)
Historical Stock Chart
From Jun 2023 to Jun 2024