TIDMKIN
RNS Number : 2661Q
Kin Group PLC
05 June 2018
RNS ANNOUNCEMENT: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
Embargoed - 07.00am
5 June 2018
Kin Group Plc ("Kin" or "the Company")
Subscription for Secured Convertible Loan Notes in bidstack
Limited ("bidstack")
The Directors of Kin are pleased to announce that the Company
has agreed to invest GBP400,000 in bidstack, a software company
that has developed technology to place digital advertising directly
into virtual billboards in computer games.
Kin and bidstack are working towards a reverse takeover ("RTO")
of bidstack by the Company which the board of Kin anticipate should
be completed by 31 August 2018. Under the RTO Kin intends to
acquire the entire issued share capital of bidstack in
consideration of the issue of new ordinary shares in Kin and
expects to raise further working capital for the enlarged group by
way of a placing of new ordinary shares to institutional and other
investors as part of the transaction.
bidstack highlights:
-- software places digital advertisements into computer games in
real time and in a highly automated manner;
-- advertisements appear native to the game, that is they appear
where you would expect to see them in comparable real world
environments;
-- technology allows targeted advertising;
-- technology links directly into programmatic advertising agencies; and
-- intends to launch with Football Manager 2018 this month, in time for the FIFA World Cup.
Information about bidstack
bidstack is a software company that has developed technology to
place programmatic advertising campaigns directly into video games.
Advertisements can appear in real time and are native to the game,
appearing where players would expect to see such advertising in
comparable real world environments. This could be advertising
hoardings in a virtual stadium, billboards next to a virtual race
track or other natural settings.
In addition, bidstack's technology allows targeted advertising
so that, for instance, two gamers playing the same game at the same
time could experience different advertisements based on criteria
determined by brand campaigns. bidstack's technology links directly
into programmatic advertising agencies under negotiated contracts.
Such agencies buy digital advertising space automatically using
computer data to decide which ads to buy and how much to pay for
them, often in real time, and now control billions of dollars of
advertising spend.
bidstack currently has exclusive rights to place direct digital
advertising into six games: these include Football Manager 2018,
Cricket Captain, and Sociable Soccer. The company is also in
discussions with other titles and publishers to secure exclusive
rights to place virtual advertising into their games.
Football Manager is a football management simulation game
developed by Sports Interactive and published by Sega. It is one of
the most successful games franchises in UK games history having
sold over 1m copies of each of its five most recent annual versions
including Football Manager 2017. Football Manager 2018 was
published in November 2017 and topped the PC software charts for
Christmas of that year. bidstack is the sole digital dynamic
advertising agency platform for Football Manager 2018, Football
Manager 2019 and Football Manager 2020.
bidstack expects to launch in Football Manager 2018 this month.
It is in discussions with a number of advertising agencies and
well-known brands, a number of whom have committed to place
advertising with bidstack. bidstack intends to expand its portfolio
of computer games.
Based at Here East in London's Olympic Park, bidstack currently
has nine employees.
James Draper, 36, is bidstack's founder and Chief Executive. He
initiated the company's move into the gaming space in 2017,
securing the three year contract with SEGA's Football Manager
title. Prior to bidstack, James has spent many years working within
marketing and advertising with a range of clients in the sports and
b2b space.
Francesco Petruzzelli, 28, is bidstack's Chief Technology
Officer. He created bidstack's core artificial intelligence engine
and heads its development studio. Prior to bidstack, Francesco
founded Whaleslide, a privacy conscious search engine allowing
users to control all aspects of their online lives from one
webpage.
Simon Mitchell, 40, Chief Commercial Officer, has been a
significant investor in bidstack. Prior to bidstack, amongst other
roles, Simon was a founder of Atia Communications which designed,
delivered and supported Microsoft Unified Communications solutions.
Atia was acquired by MeetingZone in 2013.
bidstack was incorporated in October 2015 and, according to its
unaudited results, in the 14 month period from 1 November 2016 to
31 December 2017 it had a turnover of approximately GBP10,000 and
generated a loss for the financial period of approximately
GBP434,000. bidstack's net asset value at 31 December 2017 was
approximately (GBP4,473).
bidstack currently has 14,933,729 A Ordinary Shares and 170,688
B Investment Shares in issue. The B Investment Shares have no right
to vote but otherwise rank pari passu with the A Ordinary
Shares.
Proposed transaction
The Convertible Loan Notes are intended to convert into A
Ordinary Shares of 0.001 pence each in the capital of bidstack
Limited at a conversion price of 30 pence per share on the
occurrence of a RTO of bidstack by Kin.
The RTO remains subject to contract, additional fundraising and
satisfactory completion of the necessary due diligence and, at this
stage, there is no guarantee that the RTO will complete. In the
event that the RTO should not take place, the Convertible Loan
Notes are redeemable by bidstack at any time after 30 September
2018, or by Kin in the event of a material breach of the terms of
the Convertible Loan Notes or the occurrence of certain events of
default and, in any event, on 5 June 2019.The Convertible Loan
Notes carry no right to interest except following the occurrence of
certain events of default when interest at a rate of 12% (gross)
per annum will become payable on the Convertible Loan Notes in
arrears from the date of issue of the Convertible Loan Notes until
the date of repayment of all principal and interest.
The Convertible Loan Notes are secured by a debenture containing
fixed and floating charges over its business and assets granted by
bidstack in favour of Kin.
Background to Kin
As previously announced, Kin Group Plc became a "Rule 15 cash
shell" under Rule 15 of the AIM Rules with effect from 30 August
2017.
The current Board was appointed on 15 November 2017, on
completion of a placing to raise GBP1m before expenses and a
company voluntary arrangement. Since then, the Company has had
discussions with several businesses interested in obtaining a
listing through a RTO into the Company.
The London Stock Exchange suspended trading in the Company's
ordinary shares on AIM pursuant to Rule 15 of the AIM Rules at 7.30
am on 1 March 2018 as the Company had not completed a RTO by 28
February 2018.
As previously announced, in the event that no reverse takeover
is completed by 31 August 2018, being the date six months after
trading in the Company's shares was suspended, the London Stock
Exchange will cancel the admission of Kin's ordinary shares to
trading on AIM with effect from 7.30am on Monday 3 September
2018.
Related Party Transaction
The Company intends to appoint Kepstorn Solicitors Limited
("Kepstorn") to advise it on the RTO and related matters for a
proposed fee of GBP60,000 (excluding VAT) payable in cash. Donald
Stewart, Chairman of Kin, is a consultant to Kepstorn and as such
Kepstorn is to be treated as a 'related party' in accordance with
the AIM Rules for Companies and this engagement is a related party
transaction pursuant to Rule 13 of the AIM Rules. The Independent
Directors (being Lindsay Mair and John Taylor), having consulted
with SPARK Advisory Partners Limited, consider the terms of the
Kepstorn's engagement to be fair and reasonable insofar as Kin's
shareholders are concerned.
Donald Stewart, Chairman of Kin said: "We are very pleased and
excited to be working with bidstack towards a RTO which we believe
will be transformational for Kin's shareholders. bidstack is a
dynamic, young business in a sector that we believe is capable of
significant short and medium term growth. We believe that bidstack
is currently the only media owner in the native in-game,
programmatic digital advertising arena. Leveraging bidstack's
technology we believe we can provide additional sources of revenue
for games producers and publishers which will become increasingly
valuable in an environment in which digital games are subject to
significant sales price pressure."
James Draper, Chief Executive of bidstack said: "This is an
exciting moment for me and the team. We are looking forward to the
completion of the RTO so that we can drive the business forwards to
the next stage of our growth. By obtaining a quotation on the AIM
market we believe the RTO will be a great result for our current
shareholders, who have supported us over the last three years and
will provide us with a firm foundation for continued growth and
winning more commercial contracts with the leading publishers and
advertising agencies. We are excited to be kicking off our platform
just in time for the FIFA World Cup and looking forward to the
prospect of delivering on our ambitious business plans."
Further announcements will be made as appropriate.
Ends
For further information please contact:
Donald Stewart Kin Group Plc 07786 575 372
SPARK Advisory Partners
Limited (nominated
Mark Brady/Neil Baldwin adviser) 020 3368 3551
Eran Zucker/Fungai Peterhouse Corporate
Ndoro Finance Limited 020 7469 0930
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END
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