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RNS Number : 6779P
Mobilewave Group PLC
06 October 2011
MobileWave Group plc
("MobileWave" or the "Company")
Notice of General Meeting
Trading update
Proposed issue of New Ordinary Shares and amendments to Articles
of Association
Capital Reorganisation
The Company is pleased to announce that it has today posted a
circular to Shareholders, convening a General Meeting for 11.00am
on 21 October 2011 and informing Shareholders that the Company has
entered into an Investment Agreement with Dutchess Opportunity
Cayman Fund, Ltd, conditional on Shareholder approval, whereby the
Investor has agreed to subscribe for up to GBP4.0 million of New
Ordinary Shares in the Company over a period of three years. The
circular, which also contains a trading update and details of a
Capital Reorganisation is summarised below.
Introduction
In August 2010, the Company completed the acquisition and
reverse takeover of MobileWave Limited. Its core business comprises
a mobile marketing platform with an innovative suite of consumer
loyalty applications designed to deliver measurable, targeted
mobile marketing campaigns. Since acquiring the MobileWave
business, the Company has continued to invest in the development of
its product offering.
In May 2011 Shareholders approved a proposal to raise up to
GBP2.0 million in aggregate by way of an issue of Convertible
Preference Shares in order to finance the ongoing development of
the MobileWave business. To date the Company has raised $400,000
from investors in the Convertible Preference Shares and continues
to seek further investors for the Convertible Preference
Shares.
In addition to the initiative to raise funds from the issue of
the Convertible Preference Shares, the Company has entered into an
agreement with the Investor subject to Shareholders' approval,
whereby the Investor has committed to subscribe for up to GBP4.0
million of New Ordinary Shares over a period of thirty six (36)
months.
As the business continues to evolve, this additional investment
will provide assurances that the Company will have sufficient
working capital until such time as further Convertible Preference
Shares can be issued.
Investment Agreement
On 5 October 2011, the Company entered into the Investment
Agreement with the Investor, conditional on Shareholder approval,
whereby the Investor has agreed to subscribe for up to GBP4.0
million of New Ordinary Shares over a period of three years. The
material terms of the agreement are as follows:
-- The Company is entitled to serve notice on the Investor (the
"Put Notice") requiring it to subscribe for New Ordinary Shares
equal in value to the greater of (i) GBP25,000 and (ii) 400% of the
average daily volume ("ADV") of New Ordinary Shares multiplied by
the average of the three (3) daily closing bid prices for the New
Ordinary Shares immediately preceding the Put Notice. The ADV is
computed using the closing best prices on the three trading days
prior to the Put Notice.
-- The Company is also entitled, on one occasion only to serve
notice requiring the Investor to subscribe for New Ordinary Shares
up to a value of GBP250,000.
-- The subscription price at which the Investor will subscribe
for New Ordinary Shares will be 92% of the lowest daily volume
weighted average price of the New Ordinary Shares during the ten
(10) consecutive trading days immediately after service of the Put
Notice.
-- The Company will not be entitled to require the Investor to
subscribe for further New Ordinary Shares until each transaction
has been completed.
-- The Company is entitled to withdraw from a transaction if the
subscription price of the New Ordinary Shares as determined by
reference to the share price for the 10 days following service of
the Put Notice falls below a price to be set by the Company when it
serves the Put Notice.
-- The Company is required to pay a commitment fee to the
Investor of GBP80,000 to be satisfied by the issue of 5,720,000 New
Ordinary Shares payable at par.
-- The Company will, once shareholder approval of the Investment
Agreement has been obtained, issue warrants to the Investor,
entitling the Investor to subscribe for up to 2,515,723 New
Ordinary Shares equivalent to a value of GBP40,000 priced at a
premium of 20% to the mid-market price of Existing Ordinary Shares
on 03 October 2011.
-- In addition, the Company has agreed to pay the Investor's
legal costs limited to $15,000, of which $10,000 has already been
paid.
Capital Reorganisation
The nominal value of the Existing Ordinary Shares is 5 pence per
share. Pursuant to the Investment Agreement, it is possible that
the Company will allot and issue shares to the Investor at a price
below the nominal value of the Ordinary Share. Since it is not
possible for a company to allot new shares at less than their
nominal value as this is not permitted pursuant to the Act, the
Company needs to reduce the nominal value of its shares if it is to
have the ability to issue new ordinary shares. A resolution is
therefore being proposed at the General Meeting that each Existing
Ordinary Share will be subdivided into one New Ordinary Share of
0.1p per share and one Deferred C Share of 4.9p per share.
This sub-division will not affect the inherent value of your
Ordinary Shares as the number of issued Ordinary Shares in
existence both before and after the sub-division will remain the
same. Existing share certificates in respect of Ordinary Shares
will remain valid in respect of the newly denominated New Ordinary
Shares and replacement certificates will only be sent out for
trades or transfers effected on or after 24 October 2011.
The New Ordinary Shares will have the same rights and
restrictions as the Existing Ordinary Shares. The Deferred C Shares
will have the restricted rights set out in the appendix to this
circular, will not be admitted to trading on AIM, will have no
practical economic value, will not be listed, will be non-voting,
will carry no right to a dividend and will, following court
approval, be subject to eventual cancellation by the Company for a
nominal amount. For administrative purposes the Company may
register the Deferred C Shares in the name of a nominee for the
Shareholders.
General Meeting
In order to subdivide the Existing Ordinary Shares into New
Ordinary Shares and Deferred C Shares as explained above, to
authorise the Directors to allot and issue New Ordinary Shares in
accordance with the Investment Agreement and to issue the warrants
to the Investor as described in this circular, the Resolutions will
need to be passed at the General Meeting.
A notice convening the General Meeting to consider and, if
thought fit, pass the Resolutions is set out at the end of the
circular posted to Shareholders. A summary of the Resolutions is
set out below:
Resolution 1 seeks the authority of Shareholders to subdivide
each Ordinary Share as explained in this circular.
Resolution 2 seeks the authority of Shareholders for an increase
in the share capital of the Company.
Resolution 3 seeks the authority from Shareholders for Directors
to allot New Ordinary Shares in accordance with the Investment
Agreement.
Resolution 4 seeks the authority of Shareholders for certain
amendments to the articles of association of the Company.
Resolution 5 seeks the authority of Shareholders to dis-apply
statutory pre-emption rights in respect of the authority to allot
and issue New Ordinary Shares pursuant to and in accordance with
the Investment Agreement.
Trading update
MobileWave is a broad based global mobile technology solution
partner to companies and brands that enables them to have a
meaningful and real relationship with end users. MobileWave's long
term ambition is to become an integrator of business functions into
a mobile platform, thereby enhancing commercial effectiveness and
efficiency in order to generate maximum returns. The Company aims
to partner with enterprises to assist them develop their businesses
in dealing with what the Board perceives to be an increasing use
and reliance by consumers on mobile phones and social media.
MobileWave's goal is to be the leading B2B mobile relationship
management platform for maximizing enterprise effectiveness and
efficiency.
Since acquiring the MobileWave business the Directors have
carried out a full business review and have broadened the focus of
the development of the MobileWave business, focusing in particular
on organic growth of the Company's technology and on strategic
acquisitions. MobileWave intends to become a global organization,
with a focus on developing markets, where we aim to gain clear
market leadership. Our key initiatives include:
-- Partnerships
MobileWave intends to develop partnerships with leading
advertising agencies, telecom operators and customer relationship
management platforms to accelerate the integration of its own
platform with brands and retailers' existing loyalty systems.
-- Strategic Acquisitions
The Company will seek to acquire appropriate mobile platform,
services and technology companies complimentary to its existing
business and adding to its revenue. Discussions are in progress
with several companies in this regard.
-- White Labeling
MobileWave's offering will have a highly scalable interface and
can be 'skinned' with a brand or retailers look-and-feel and
rapidly rolled out as a customized solution to complement their
existing marketing, mobile and loyalty initiatives and/or to
mobilize their enterprise software.
Since 2010 MobileWave has engaged a Silicon Valley marketing
consultancy firm, Global Fluency, with the intention of expanding
into North America and making its platform and message more
relevant to enterprise marketers. As a consequence of the
relationship with Global Fluency, MobileWave has forged a strategic
alliance with the Chief Marketing Officer Council (CMO), a
non-profit network of approximately 6,000 marketing professionals
engaged in developing best practice in customer relationship
management, marketing automation and loyalty. MobileWave has
benefitted from this collaboration from introductions to CMO
councils member organisations as well as from the credibility of
being associated with this influential business network.
As part of the process of expanding its reach, MobileWave has
now moved its product development away from South Africa and has in
place a development agreement with Ariose Software in Delhi, India.
The Company's immediate focus is around the marketing function and
capability. The initial goal is and remains to gain critical mass
as MobileWave focuses on becoming a global provider of mobile
marketing and advertising solutions that enable brands, advertising
agencies, retailers and large enterprises to implement highly
targeted, interactive and measurable campaigns by communicating
with and engaging consumers via their mobile devices. The Company
believes that the integrated, user friendly platform, currently
being developed will be a leading solution for customers looking to
build deeper relationships with their consumers and/or end users.
It is expected that this platform will enable the Company's
customers to plan via insight-based profiling and segmentation,
execute, target, monitor and measure mobile marketing and
advertising campaigns in real time throughout the campaign
lifecycle to drive better results from customers, including
enhanced return on investment.
High profile tier 1 customers will be targeted within sectors
which will act as reputation builders critical to establish the
Company's credentials as a serious, trusted player in the mobile
marketing and relationship management space. Current industry focus
areas are pharma/health, financial services, retail, FMCG, sport
and entertainment and mass transit.
People
At the beginning of June, the Company recruited Kurt Pakendorf
as Group CEO and a board member of MobileWave Group Plc. Kurt is a
highly experience technology executive who has held significant
leadership positions in technology companies based in Europe and
the USA. Prior to this Kurt was an attorney practising corporate
law in South Africa, the United Kingdom, and Belgium and with the
United Nations in Kosovo.
A new Chief Technology Officer and Chief Revenue Officer are
expected to be appointed shortly.
Litigation update
As shareholders are aware, the Company has been pursuing Mr
Devinder Raj Narang in respect of the deferred cash payment of US
$1.5 million which was due on 31 December 2009, together with
accrued interest following the disposal of the Freeplay business on
4 August 2008.
The Company obtained judgment against Mr Narang in the UK which
it is seeking to enforce in India. The next hearing date for the
matter in India is scheduled on 15 November 2011. In addition to
pursuing Mr Narang through the Indian courts, the Company is also
seeking to enforce the judgement granted against Mr Narang in the
UK. Consequently a dual track is being pursued. The Company has
terminated the mediation efforts that were being undertaken by a
third party, known to both Mr Narang and the Board.
Recommendation
The Directors believe that the Proposals are in the best
interests of the Company. Accordingly, the Directors unanimously
recommend that you vote in favour of the Resolutions to be proposed
at the General Meeting as they intend to do so in respect of their
own aggregate holdings of 19,385,589 Ordinary Shares in which they
are interested, representing approximately 24.5 per cent. of the
existing issued ordinary share capital of the Company.
For further information, please contact:
MobileWave Group plc
Rory Stear, Chairman rstear@mobilewave.com
Kurt Pakendorf, Chief Executive Officer
Charles Stanley Securities 020 7149 6000
Nominated Adviser & Broker
Dugald J. Carlean / Carl Holmes
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time and date for receipt 11.00 a.m. on 19
of Forms of Proxy October 2011
General Meeting 11.00 a.m. on 21
October 2011
DEFINITIONS
The following definitions apply throughout the announcement
unless the context requires otherwise:
"Act" the Companies Acts 1985
and 1989, as amended or
replaced by the Companies
Act 2006 ("2006 Act") where
the context requires
"AIM" AIM, a market operated by
the London Stock Exchange
"AIM Rules" the rules governing the
admission to, and operation
of AIM contained in the
document entitled the "AIM
Rules" published by the
London Stock Exchange
Capital Reorganisation the splitting of the 110,819,638
issued and unissued Existing
Ordinary Shares with a nominal
value of 5 pence into 110,819,638
issued and unissued New
Ordinary Shares with a nominal
value of 0.1 pence each
and 110,819,639 Deferred
C Shares with a nominal
value of 4.9 pence each
"Capita Registrars" a trading name of Capita
Registrars Limited
"Company" or "MobileWave" MobileWave Group plc and
or "Group" its subsidiaries as the
context requires
"Convertible Preference the convertible redeemable
Shares" preference shares of 1p
each in the capital of the
Company
"Deferred C Shares" the deferred C shares of
4.9 pence each resulting
from the Capital Reorganisation
of the Ordinary Shares as
set out in the circular
"Directors" or the directors of MobileWave,
the "Board" whose names appear on page
4 of this document
"Existing Ordinary ordinary shares of 5 pence
Shares" each in the share capital
of the Company
"Form of Proxy" the form of proxy enclosed
with this document for use
at the General Meeting
"GM" or "General the General Meeting of the
Meeting" Company convened for 11.00
a.m. on 21 October 2011
by the Notice of GM and
any adjournment thereof
"Investment Agreement" the agreement dated 5 October
2011 between the Company
and the Investor concerning
the proposed investment
by the Investor in New Ordinary
Shares as described in the
circular
"Investor" Dutchess Opportunity Cayman
Fund Ltd
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" ordinary shares of 0.1 pence
each in the capital of the
Company resulting from the
Capital Reorganisation of
the Existing Ordinary Shares
as set out in the circular.
"Notice of General the notice of GM set out
Meeting" at the end of the circular
"Proposals" the proposed Capital Reorganisation,
the issue of New Ordinary
Shares and the amendments
to the Company's articles
of association
"Prospectus Rules" the prospectus rules made
by the Financial Services
Authority pursuant to section
73A of the Financial Services
and Markets Act 2000, as
amended
"Resolutions" the resolutions set out
in the Notice of GM
"Shareholders" holders of Ordinary Shares
"United States" the United States of America,
or "US" its territories and possession,
any state of the United
States and the District
of Columbia
This information is provided by RNS
The company news service from the London Stock Exchange
END
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