21
March 2024
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No 596/2014. as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
LIVE COMPANY GROUP
PLC
("LVCG",
the "Company" or the "Group")
CHAIRMAN-LED REFINANCING BY
MEANS OF £1.77M OF CONVERTIBLE LOAN
CONVERSION OF
OUTSTANDING/ONGOING DIRECTOR REMUNERATION AND CERTAIN OTHER
CREDITORS
DISPOSAL OF MAJORITY INTEREST
IN STARTART
PLACING
ASSOCIATED RELATED PARTY TRANSACTIONS
TVR
PROPOSED GENERAL
MEETING
CORPORATE
UPDATE
Highlights:
·
£1.77m total convertible
loan provided to the Company from Chairman
·
Creditor settlements in
Shares
·
Disposal of majority
interest in StartArt
·
Placing to raise £352,000
(before expenses) together with additional £250,000 of convertible
loan from Chairman (included in the above total) to bring gross
amount raised to £602,000.
·
Existing businesses expected to be funded for this
year
·
As announced previously,
negotiations with two separate strategic investors with one
mutually agreed term sheet. Any investments from
these new strategic partners will be for further business
development and further details to be announced if and when these
progress.
Conversion of Chairman's debts and additional Chairman's
convertible loan
It was announced on 29 December
2023, that the Company's Chairman, Mr David Ciclitira, had agreed
to convert £350,000 of his outstanding debt to the Company into
ordinary shares of 1p each in the Company ("Shares") at an
issue price of 3p per Share ("Conversions Price"). Following the
year end David Ciclitira has also agreed to increase his commitment
to the company by entering into a convertible loan of £1,182,932.41
("Convertible Loan") and this loan now includes the conversion of
the £350,000 of his outstanding debt previously
announced.
The loan will be for a period of 24
months and reflects a back-to-back arrangement whereby Mr Ciclitira
has borrowed monies in his personal capacity and will incur monthly
interest from 1 July 2024, at the rate of 20% per annum until
repaid, which broadly equates to the interest paid by Mr Ciclitira
on his asset backed loan taken out to provide this funding to the
Company. The full amount of the facility has already been
applied to the clearance of existing creditors including costs
associated with the cancelled O2 London KPOP concert last September
and, in particular, £630,000 has been used to repay the loan
provider in relation to that event. The loan is convertible at Mr
Ciclitira's discretion into shares in LVCG at 3p per Share over 24
months and will be secured against the Company's assets, post Close
Brother's existing charge.
Mr Ciclitira has also agreed to an
additional convertible loan note relating to unpaid fees up until
end of February 2024. The amount is £336,649.80 and will also be
convertible at 3p per Share.
As noted below, in conjunction with
the Placing, Mr Ciclitira has provided an
additional £250,000 of working capital by adding to his convertible
loan - convertible at 6p - bringing the total to £1.77
million.
The issue of Shares on conversion of
the Convertible Loan to Mr Ciclitira will be limited to such amount
so as not to cross a Takeover Code Rule 9 threshold. (Conversion
will be subject to the authorities to be sought at the General
Meeting of the Company as referred to below.) The total number of
Shares that are issuable under the Convertible Loan are 50,652,740
Convertible Loan Shares"). The 3p
Conversion Price represents a premium of circa 50% to the closing
price per Ordinary Share of 2.05p on AIM on 3 July 2023 being
the last trading day before trading in the Company's share was
suspended on AIM and as noted above £250,000 of this is convertible
at 6p.
Additionally, on 20 February 2024, the LVCG remuneration committee awarded
the following options at £0.04 over a 4- year period to Mr
Ciclitira ("Chairman Options"):
David Ciclitira
|
5 000
000
|
£0,04
|
£200
000,00
|
Mr Ciclitira has also, in
conjunction with the recent audit, provided a letter of support for
£1,000,000 to support the cash flow of the business until 31
January 2025.
Related Party Transaction
As Mr Ciclitira is a Director of the
Company and a substantial shareholder (together with his wife,
holding 20.92% of the current issued share capital), as defined
under AIM rules for Companies (the "AIM Rules") he is a related
party of the Company. Accordingly, the
issue of the Convertible Loan up to the
total aggregate amount of £1.77 million and the issue of the
Chairman Options, are classified as a
Related Party Transaction pursuant to Rule 13 of the AIM
Rules.
The Directors of the Company, other
than David Ciclitira, being:
Stephen Birrell, Ranjit
Murugason and Bryan Lawrie, consider, having consulted with the Company's Nominated Adviser,
Beaumont Cornish Limited, that the terms of the Convertible Loan
and the issue of the Convertible Loan Shares and the issue of the
Chairman Options are fair and reasonable insofar as the Company's
Shareholders are concerned. In forming
their view, the
independent Directors have taken into
account the Company's urgent need to reduce its debt and to provide
sufficient ongoing working capital to the Company to enable the
financial statements to be signed and trading on AIM to be
restored.
NED
Directors' Fees and Expenses
The Directors, (other than Mr
Ciclitira) being; Ranjit Murugason, Bryan Lawrie, Maria Serena Papi
(former Director) and Stephen Birrell, have elected to take their
outstanding fees, up until end of February 2024, totalling £
332,225.80 in Shares at an
issue price of 3p per Share ("Settlement Price"). ("NED Fee
Shares"). The issue of the 11,074,193 NED
Fee Shares will be subject to the authorities to be sought at the
General Meeting of the Company as referred to below.
The Settlement Price represents a premium of circa
50% to the closing price per Ordinary Share of 2.05p on AIM on 3
July 2023 being the last trading day before trading in the
Company's share was suspended on AIM.
The breakdown of amounts due to each
director and corresponding number of shares are detailed in the
below table.
Directors
|
Amount (£)
|
Issue
Price (p)
|
NED
Fee Shares
|
Ranjit Murugason
|
170,766
|
3
|
5,692,185
|
Bryan Lawrie
|
68,340
|
3
|
2,278,000
|
Stephen Birrell
|
28,439
|
3
|
947,971
|
Serenella Papi
(former Director)
|
64,681
|
3
|
2,156,037
|
Staff Options
On the 20 February 2024 the LVCG
remuneration committee awarded the following staff options at 4p
("Option Price") over a 4- year period:
|
No.
|
Exercise
price
|
Subscription amount
|
Sarah Ullman
|
900
000
|
£0.04
|
£36
000,00
|
Nicola Gross
|
200
000
|
£0.04
|
£8
000,00
|
Chris Botes
|
200
000
|
£0.04
|
£8
000,00
|
Luke Fowler
|
100
000
|
£0.04
|
£4
000,00
|
Dovydas Kaltanas
|
200
000
|
£0.04
|
£8
000,00
|
Gillian Anderson
|
100
000
|
£0.04
|
£4
000,00
|
Belinda Laubi
|
500
000
|
£0.04
|
£20
000,00
|
|
|
|
|
The Option Price represents a
premium of circa 100% to the closing price per Ordinary Share of
2.05p on AIM on 3 July 2023 being the last trading day before
trading in the Company's Shares was suspended on AIM.
Related Party Transaction
Ranjit Murugason, Bryan Lawrie
and Stephen Birrell are Directors of the Company and
accordingly are defined as Related Parties
under the AIM Rules. Accordingly, the fee
conversion, is classified as a Related Party Transaction pursuant
to Rule 13 of the AIM Rules.
The Directors of the Company, other
than Ranjit Murugason, Bryan Lawrie
and Stephen Birrell, being David
Ciclitira considers, having consulted with the Company's Nominated Adviser,
Beaumont Cornish Limited, that the issue of the NED Fee Shares is
fair and reasonable insofar as the Company's Shareholders are
concerned. In forming his view,
the independent Director
has taken into account the Company's urgent need
to reduce its debt and to provide sufficient ongoing working
capital to the Company.
Creditors
The Company has been operating on
reduced overheads as it works on cash preservation and cost
reduction. It has also agreed with a series of creditors for
them to convert their debt into Shares at 3p per Share. The total
amount of debt that would be converted into equity in the Company
in full and final settlement has been fluid as agreements continue
to be negotiated and concluded.
Certain creditors have agreed to take, in Shares, their outstanding
fees totalling £1,252,839.66 at 3p per Share. A further £139,323 of
outstanding creditors is under discussion. The issue of up to
41,761,322 creditor conversion Shares ("Creditor Shares")
will be subject to resolutions sufficient to authorise the Shares
to be issued which will be proposed at a forthcoming General
Meeting - details of which are provided below.
The Company will also make use of
its EBT facility to satisfy certain creditors and outstanding
amounts owing to employees and contractors. It is expected that
28,669,333 Shares will be issued and sold via the EBT facility over
a 20 month period. All Share sales will be completed in an orderly
market fashion when there is sufficient market
liquidity.
StartArt
The Company has agreed with the
original vendors of StartArt to cancel the obligations to pay the
outstanding deferred consideration against the return of the 80.06%
acquisition of StartArt as announced on 8 July 2023. All
amounts owing to the vendors (being David Ciclitira and Ranjit
Murugason) being up to an aggregate of £500,000 in cash and
£519,800 equivalent in Ordinary Shares will henceforth be cancelled
with the Company retaining a 19.94% interest. ("StartArt
Disposal"). The Company believes in the Group's current financial
situation, that it is prudent to preserve future cash-burn and
avoid future financing costs by transferring the 80.06 % interest
back to the original principals in cancellation of the remaining
amounts owing under the original purchase agreement. The Company
retains its holding in StartArt of 19.94% but without any ongoing
financing obligations post 31 October 2023. The Company retained
all financial responsibilities up until 31 October 2023
As detailed in the Company's
recently released 2022 Final Accounts and 2023 Interim Accounts,
the carrying Value of StartArt has been written down to £738,000
from an Initial Value of £3.924 million. This is largely due to the
fact that some of the events planned for StartArt in 2023 did not
take place and the company had not met its performance targets.
Accordingly, the unaudited management accounts for the year ended
31 December 2023 show a turnover for StartArt of £386,000 and an
operating profit of £32,000.
In compensation for his role at
StartArt, Mr Murugason has been awarded 1,000,000 Shares at
3p per share. This amount is included in the total NED Directors'
compensation detailed above.
Related Party Transaction
David Ciclitira is a Director of the
Company and a substantial shareholder, is interested in
20.92 % of the Company's issued share
capital. Ranjit Murugason is also a Director of the Company.
Accordingly, they are defined as Related Parties under the AIM
Rules for Companies (the "AIM Rules"). Accordingly, the StartArt Disposal is classified as a Related
Party Transaction pursuant to Rule 13 of the AIM
Rules.
The Directors of the Company, other
than David Ciclitira and Ranjit Murugason
and, being Bryan Lawrie and Stephen Birrell consider,
having consulted with the Company's Nominated
Adviser, Beaumont Cornish Limited, that the terms of the StartArt
Disposal are fair and reasonable insofar as the Company's
Shareholders are concerned. In forming their view, the independent
Directors have taken into account both the
fact that the projected new sources
of income at the time of acquisition had not been realised
together with the Company's urgent need to reduce
its debt and to limit its funding exposure to non-performing parts
of the Group.
Corporate Governance
David Ciclitira occupies the dual
role of Executive Director and Chairman of the Board. Given the
Group's present position David Ciclitira's experience in event
marketing and promotion, and his familiarity with the Company's
projects, the Company believes that it is appropriate for this
situation to continue for the time being but intends to review this
and split the roles when it is practical to do so. The
Company is also committed to the appointment of a qualified Finance
Director. These changes will be reviewed by the Company before the
publication of the next audited accounts.
The Company has appointed a
non-Board FD Mr Russell Levinson, FCMA, who brings a wealth of
experience with a range of companies. Mr Levinson
is a chartered Management Accountant (FCMA) and MBA holder and has
worked as FD and CFO across a number of different types of
industries including retail, life sciences, music, infrastructure
and business services, pending as referred to above the
appointment of a permanent Board-level Finance Director.
Placing
To provide immediate additional
funding for ongoing
working capital for the Group, the Company
has raised £352,000 (before expenses) by way of a placing and
Company subscription of 35,200,000 new Shares ("Placing Shares") at
a placing price of 1p per share (the "Placing Price") (the
"Placing"). The Placing Price represents a discount of circa 50% to
the closing price per Ordinary Share of 2.05p on AIM on 3
July 2023 being the last trading day before trading in the
Company's share was suspended on AIM. The original intention as
referred to in previous announcements was to have raised £500,000
and therefore Mr Ciclitira has provided an additional £200,000
(consisting of a prepayment of £148,000) which is part of an
additional £250,000 convertible loan (of which Mr Ciclitira had
previously prepaid £102,000) - convertible in this case at 6p per
Share. The additional £52,000 is an advance payment for additional
subscriber funds (5,200,000 new Shares) which have yet to be
received by the Company. Payment for these additional Shares are
due to be received imminently and will be returned to Mr Ciclitira
once received. The Placing and the additional convertible
loan have therefore in aggregate raised £602,000 (gross) of working
capital for the Group.
The Company has entered into a
placing agreement dated 19 March 2024 (the "Placing Agreement")
with a placing agent, to which they, as agents for the Company,
have procured places for the Placing Shares at the Placing Price.
The obligations of the placing agent under the Placing Agreement
are conditional, inter
alia, upon the admission of the Placing Shares to trading on
AIM ("Placing Share Admission") having occurred by 8.00 a.m. on 20
March (or such later time and/or date as may be agreed, being no
later than 8.00 a.m. on 21 March), and there being no material
breach of the warranties given to prior to admission of the Placing
Shares. Following Placing Share Admission, such Placing Shares will
rank pari passu with the existing Ordinary Shares. The issue of the
Placing Shares is not conditional on the authorities to be sought
at the forthcoming General Meeting as referred to below.
Based upon the transactions set out
in this announcement and the Group's current financial projections
including income from BrickLive and at least one KPOP event in
2024, the Company is not anticipating the need for additional
funding this year for its existing businesses.
AIM
Application, General Meeting and Total Voting
Rights
The issue of up to 50,652,740
Convertible Loan Shares at 3p and 4,166,667 Convertible Loan Shares
at 6p, the 11,074,193 NED Fee Shares and up to 41,761,322
Creditor Shares amounting in aggregate to 107,654,922 new Shares
will be subject to the passing of Resolutions sufficient to
authorise the new Shares to be issued which will be proposed at a
forthcoming General Meeting.
The Convertible Loan Shares, the NED
Shares, the Creditor Shares and Placing Shares amounting in
aggregate to up to 107,654,922 new Shares ("New Shares") will, when
issued, be credited as fully paid and will rank pari passu in all respects with the
existing Shares, including the right to receive all dividends or
other distributions made, paid or declared in respect of such
shares after the date of issue.
Save for the Placing Shares, the
issuance of the New Shares is conditional upon, inter
alia, the passing of Resolutions to be put to Shareholders of the
Company at the General Meeting proposed to be held on 16 April 2024 ("GM") to provide
authority to the Directors to issue and allot the required shares
on a non-pre-emptive basis. A circular containing a notice of
the GM will be posted to shareholders
shortly.
Application will be made for
35,200,000 Placing Shares to be admitted to trading on AIM and it
is expected that the admission in respect of 35,200,000
Shares on AIM will take place on or around 21 March 2024.
("Placing Admission").
Restoration of trading of the
Company's Shares on AIM is expected to occur on 21 March 2024 at
7:30am prior to Placing Admission.
Conditional on the passing of the
Resolutions at the GM, application will be made for the
Convertible Loan Shares at both 3p and 6p, the NED Fee Shares and
the Creditor Shares to be admitted to trading on AIM and it is
expected that their admission to AIM will take place on a date to
be notified in April 2024 for all but the Convertible Loan shares
which as detailed above will be converted over a two-year
period.
Following the admission of the
initial tranche of 35,200,000 Placing Shares, the enlarged issued
share capital of the Company will comprise 295,123,920 ordinary
shares of 1p each ("Shares"). Each Share has one voting
right. No Shares are held in treasury. The above figure
may, following Placing Admission, be used by LVCG shareholders as
the denominator for the calculation 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.
A Circular including the Notice of
Meeting for the GM will be posted shortly ("Circular").
Following the General Meeting and
taking into account the potential Convertible Loan Shares,
the NED Fee Shares, the Creditor Shares and all other
existing Shares, the potential maximum total number of Shares in
issue will be 402,778,842 .
Existing Warrants
The Company is pleased to confirm
that it is proposing that all existing warrants will be extended
until 30 June 2026 and repriced at an exercise price of 3p.
Existing warrant holders have been contacted to approve this
extension, however any warrant holders who would like to approve
this extension who have not been contacted should get in touch with
the Company as soon as possible.
Corporate Update
As indicated in the last Interim
Statement, the revenue in the first half included exceptional items
which have not been replicated in the second half which was also
significantly affected by the cancelled O2 KPOP event and the
associated sunk costs in the Autumn, and therefore overall
the Group is likely to be substantially loss-making for the year to
December 2023.
Regarding the current year, as
announced on 29 December 2023, the Company continues to operate as
per the usual course of business with 15 Bricklive Tours already
booked for 2024. BrickLive is therefore anticipated to be the main
source of revenue in the current year supplemented by a planned
single KPOP event later on. The StartArt division (now 19.94% owned
by the Group) is currently in preparations for a potential South
African Eye art exhibition and StART London which will take place
in a new location - KX - the old Camden Town Hall. Live Company Sports and Entertainment is actively working
towards the potential hosting of a Cape Town e-prix in
2025.
As announced on 1 March 2024, the
Company has also been in negotiations with
two separate strategic investors. Whilst both negotiations are
ongoing, one of these has already resulted in a mutually agreed
term sheet and should these negotiations be progressed, a further
announcement will be made. Any investments from these new
strategic partners will be for further business
development.
Enquiries:
Live Company Group Plc
David Ciclitira, Executive
Chairman
Sarah Dees, Chief Operating
Officer
|
Tel: 020
7225 2000
|
|
|
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish/Rosalind Hill
Abrahams
|
Tel: 020
7628 3396
|
|
|
|
|
CMC
Markets UK Plc (Broker)
Thomas Smith
|
Tel: 020
7392 1436
|
About Live Company Group
Live Company Group Plc ("LVCG", the
"Company" or the "Group") is a live events, entertainment and
sports events Company, that has been trading on AIM since
2017.
The Group is divided into four
divisions:
·
BRICKLIVE - consisting of a network of
partner-driven fan-based and touring shows using BRICKLIVE created
content worldwide. The Company owns the rights to BRICKLIVE - an
interactive experience built around the creative ethos of the
world's most popular construction toy bricks. The Group is an
independent producer of BRICKLIVE and is not associated with the
LEGO Group.
·
LVCG owns the brand KPOP Lux and is the Executive
Producer of KPOP Lux.
·
LVCG owns 19.94 % of StART Art Global (SAG) - SAG
owns StART Art Fair in London which has been staged over the last
10 years at the Saatchi Gallery.
·
Live Company Sports and Entertainment (LCSE) -
LCSE owns LCSE Pty in South Africa.
LVCG is a founder shareholder in
E-Movement - the promoter of the Formula E Race in Cape Town. As
part of this relationship E-Movement has retained LCSE (through
E-Movement holdings) as its implementation partner. E-Movement
Holdings a 100% subsidiary of Live Company Group has the right to
sell sponsorship for the Formula E race in Cape Town.
IMPORTANT
NOTICES
Neither this Announcement, nor any
copy of it, may be taken or transmitted, published or distributed,
directly or indirectly, in or into the United States, Australia,
Canada, Japan, New Zealand, the Republic of Ireland or the Republic
of South Africa or to any persons in any of those jurisdictions or
any other jurisdiction where to do so would constitute a violation
of the relevant securities laws of such jurisdiction. This
Announcement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an
offer to buy, acquire or subscribe for any shares in the capital of
the Company in the United States, Australia, Canada, Japan, New
Zealand, the Republic of Ireland or the Republic of South Africa or
any other state or jurisdiction in which such offer or solicitation
is not authorised or to any person to whom it is unlawful to make
such offer or solicitation. Any failure to comply with these
restrictions may constitute a violation of securities laws of such
jurisdictions. The securities referred to in this Announcement
have not been, and will not be, registered under the US Securities
Act of 1933, as amended (the "US Securities Act"), or with any
securities regulatory authority of any state or jurisdiction of the
United States, or under any securities laws of any state or other
jurisdiction of the United States and may not be offered, sold,
resold, pledged, transferred or delivered, directly or indirectly,
in or into the United States except pursuant to an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act and, in each
case, in compliance with the securities laws of any state or other
jurisdiction of the United States.
Beaumont Cornish Limited ("Beaumont
Cornish") is the Company's Nominated Adviser and is authorised and
regulated by the FCA. Beaumont Cornish's responsibilities as the
Company's Nominated Adviser, including a responsibility to advise
and guide the Company on its responsibilities under the AIM Rules
for Companies and AIM Rules for Nominated Advisers, are owed solely
to the London Stock Exchange. Beaumont Cornish is not acting for
and will not be responsible to any other persons for providing
protections afforded to customers of Beaumont Cornish nor for
advising them in relation to the proposed arrangements described in
this announcement or any matter referred to in it.
Cautionary statements
This Announcement may contain, and
the Company may make verbal statements containing "forward-looking
statements" with respect to certain of the Company's plans and its
current goals and expectations relating to its future financial
condition, performance, strategic initiatives, objectives and
results. Forward-looking statements sometimes use words such as
"aim", "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "seek", "may", "could", "outlook" or
other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances which are beyond the
control of the Company. As a result, the actual future financial
condition, performance and results of the Company may differ
materially from the plans, goals and expectations set forth in any
forward-looking statements. Any forward-looking statements made in
this Announcement by or on behalf of the Company speak only as of
the date they are made. The information contained in this
Announcement is subject to change without notice and except as
required by applicable law or regulation (including to meet the
requirements of the AIM Rules, MAR, the Prospectus Regulation Rules
and/or FSMA), the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this Announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based. Statements contained in this
Announcement regarding past trends or activities should not be
taken as representation that such trends or activities will
continue in the future. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
Announcement.
No statement in this Announcement is
intended to be a profit forecast and no statement in this
Announcement should be interpreted to mean that earnings per share
of the Company for the current or future years would necessarily
match or exceed the historical published earnings per share of the
Company. Any indication in this Announcement of the price at which
ordinary shares have been bought or sold in the past cannot be
relied upon as a guide to future performance.
This Announcement does not identify
or suggest, or purport to identify or suggest, the risks (direct or
indirect) that may be associated with an investment in the
Placing Shares. Any
investment decisions to buy Placing
Shares in the Placing must be made solely on the
basis of publicly available information, which has not been
independently verified by the Sole Bookrunner.
The Placing Shares to be issued
pursuant to the Capital Raise will not be admitted to trading on
any stock exchange other than AIM.
Neither the content of the Company's
website (or any other website) nor the content of any website
accessible from hyperlinks on the Company's website (or any other
website) is incorporated into or forms part of this
Announcement.