Brave Bison Regulatory News (BBSN)

This announcement is for information purposes only and does not itself constitute an offer for sale or subscription of any ordinary shares or other securities in the capital of the Company. This announcement has been issued by and is the sole responsibility of the Company.

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Rightster Group PLC

("Rightster" or the "Group" or the "Company")

Further re: Proposed Placing

Rightster Group plc (LSE AIM: RSTR), the cloud-based global video distribution and monetisation network, today releases an update on its proposed placing announced on 30 April 2015.

· Placing of 27,868,896 new ordinary shares of 0.1 pence each (the "Placing Shares") at 18 pence per Placing Share to raise approximately £5 million before expenses (the "Placing")

· Loan Note Subscription for an aggregate amount of £383,598.72

· The Loan Notes will, when issued and subject to the satisfaction of certain conditions, be convertible into new ordinary shares at a price of 18 pence per new ordinary share

· Circular to be posted to shareholders today containing a notice of general meeting

· Admission to trading on AIM of the Placing Shares expected on 27 May 2015

For further information please contact:

Introduction

The Company announces that it proposes to raise approximately £5 million (before expenses) by means of a Placing, with existing investors, of 27,868,896 Placing Shares at a price of 18 pence per new Ordinary Share. The Issue Price represents a discount of approximately 2.7 per cent. to the Closing Price on 6 May 2015, being 18.5 pence per Ordinary Share.

The Placing is conditional, inter alia, on the passing of the Resolutions at the General Meeting.

In connection with the Placing the Loan Note Subscriber has conditionally agreed pursuant to the Loan Note Subscription Letter to subscribe for Loan Notes in the aggregate amount of approximately £384,000. The Loan Notes will, when issued and subject to the satisfaction of certain conditions, be convertible into new Ordinary Shares at the Issue Price. Further details of the Loan Note Instrument are set out in paragraph 5 below. In connection with, and to enable, the Loan Note Subscription it is proposed to amend the borrowing powers of the Company as currently set out in the Articles.

The Loan Note Subscription is conditional, inter alia, on (i) the Placing Agreement not having been terminated, (ii) Admission and (iii) the passing of the Resolutions at the General Meeting.

This letter explains why the Board believes that the Placing and the Loan Note Subscription are in the best interests of the Company and the Shareholders as a whole and unanimously recommends that you vote in favour of the Resolutions to be proposed at the General Meeting to be held at 10.00 a.m. on 26 May 2015 as the Directors intend to do in respect of their own holdings of Ordinary Shares.

WIM, Vesuvius, Plum Tree and IAML, significant shareholders who in aggregate have an interest in 149,085,242 Existing Ordinary Shares, representing approximately 76.66 per cent. of the existing ordinary share capital of the Company, have irrevocably undertaken to vote in favour of the Resolutions to be proposed at the General Meeting.

On 28 January 2015, the Company announced that Charlie Muirhead had stepped down as CEO but would continue to be a member of the Board. Charlie Muirhead ceased to be a Director of the Company with immediate effect on 6 May 2015.

Shareholders should be aware that, if the Resolutions are not approved at the General Meeting, the net proceeds of the Fundraising will not be received by the Company and therefore the Company would need to explore alternative financing arrangements to ensure it has sufficient working capital for at least the next 12 months.

Rightster

Rightster simplifies the distribution and monetisation of online video through its software powered solutions. The Company distributes content to enterprise and long tail clients. The Company brings together content owners, creators, brands and publishers and helps them build and engage audiences online with increased efficiency. As a Multi-Platform Network, Rightster enables clients to commercialise their content to audiences worldwide on some of the most popular online video platforms such as YouTube. With 13 offices in 11 countries, Rightster has local knowledge and global reach.

The US$230 billion TV advertising market faces challenges as audiences move to multiple online video platforms and devices. As a result, the online video market is growing rapidly and TV advertising budget is progressively shifting to online video. A recent report by ZenithOptimedia (Executive summary: Advertising Expenditure Forecasts March 2015) predicts global advertising expenditure will reach US$544 billion by the end of 2015. Within this global advertising expenditure, it estimates that online video is growing faster than any other digital category or sub-category, growing 34 per cent. to $10.9billion in 2014, and forecast to grow at an average of 29 per cent. a year to reach US$23.3billion in 2017.

The Directors believe that the Company is well positioned to capitalise on the opportunities in the market. The Company is content, platform and device neutral and its technology, expertise and data-driven insights enable it to simplify the fragmented online video market for its stakeholders, including content owners, creators, brands and publishers. The benefits for content owners are maximised revenue, global reach and increased efficiency whilst creators are able to grow faster and earn more from new opportunities. Brands can find some of the most influential content creators such as Remi Gaillard -number 1 YouTuber in France by views- on the Rightster network and obtain TV scale and valuable insights whilst publishers can source video for their sites, grow their audiences and drive revenue. With a current network of 2,500+ content owners and 10,500+ publishers, the Directors believe that Rightster has the scale and expertise to enable 'Rightcasting' for all these stakeholders - distributing the right video to the right audience in the right place at the right time.

Rightster's business model is based around three core capabilities:

• Flexible monetisation models

Rightster supports a range of commercial models including revenue share, subscription, licensing and fee based services.

• Advanced managed services

Rightster has recently enhanced its brand offering and can also offer YouTube channel management expertise and social video management know-how.

• Software and data powered services

Rightster's platform can manage, distribute and protect complex international rights across multiple platforms and unify data from a wide range of sources to obtain valuable insights for both clients and the Company.

Following the recent acquisitions of Base79 Limited ("Base79") and Viral Management Limited ("VML"), Rightster is now one of the largest Multi-Channel Networks (MCN) outside of the USA. The Company is now winning lucrative deals including a 3.5 year deal with the Arts Council England, worth £1.8 million, to establish and manage their MCN for the arts, partnerships with Turkish Airlines that generated 10.7 million YouTube views, Microsoft Lumia for innovative global YouTube campaigns, Sony Music Entertainment, and more recently an extension of a global partnership with 20th Century Fox to include 10 additional international territories.

The integration of the acquired businesses is almost complete and the Directors have identified material cost synergies that should result in annualised cost savings of approximately £3 million per annum. The newly appointed management team anticipate net revenues for 2015 to grow 80 to 100 per cent. from 2014, with cash flow breakeven expected in 2016.

Trading Update

Rightster has released today its audited preliminary results for the 12 months ended 31 December 2014. Key highlights include:

• Total Transaction Value* has risen from £11.0 million in 2013 to £18.3 million in 2014

• Net Revenue has increased from £6.2 million in 2013** to £8.7 million in 2014

• Gross Profit has grown from £0.6 million in 2013 to £3.9 million in 2014

• Average monthly video views have risen to 1.2 billion in H2 2014 (369 per cent. growth from H2 2013)

• Content owners have increased from 850+ to 2,500+. Publishers have grown from 7,500+ to 10,500+

* Total Transaction Value shows the total amount of business facilitated through Rightster. It sums the total exchange of revenue between Rightster partners before distribution of revenue share.

** After adjusting for terminated contracts, net revenue in 2013 was £3.0m.

The Company also included a Q1 2015 update in its preliminary results announcement, showing that strong growth in its online video traffic continues, with average monthly video views for Q1 estimated at 1.6 billion. It has also surpassed 72 million subscribers and reached 124 million unique viewers across its YouTube network. Significant deals in Q1 included an extension of a global partnership with 20th Century Fox, with Rightster now fully managing Fox's branded content across 17 international territories,. In addition, Rightster has expanded its international reach through further deals with Amutus (the Japanese Gaming Company), Yahoo AUNZ, Bauer Media Australia and Coconuts Media (a Hong Kong and Singapore-based web production company).

The Placing

The Company has conditionally placed 27,868,896 new Ordinary Shares at 18 pence per share with existing investors to raise approximately £5 million before expenses, assuming the issue of all the Placing Shares. The Placing Shares will, when issued, rank in full for all dividends declared, made or paid after the date of their Admission and otherwise pari passu with the existing Ordinary Shares.

In addition, certain of the Directors and senior managers intend to subscribe an aggregate amount of £110,000 for new Ordinary Shares once the Company ceases to be in a close period for the purposes of the AIM Rules (expected to be on publication of the audited accounts of the Company for the year ended 31 December 2014) at a price to be agreed.

The Placing Agreement

In connection with the Placing, the Company and Cenkos have entered into the Placing Agreement pursuant to which and conditional upon, inter alia, Admission of the Placing Shares taking place on or before 27 May 2015 (or such later time and date as the Company and Cenkos may agree, being no later than 10 June 2015) Cenkos has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing is not underwritten.

The Placing Agreement contains customary warranties and an indemnity from the Company in favour of Cenkos together with provisions which enable Cenkos to terminate the Placing Agreement in certain circumstances prior to Admission (as applicable), including where any warranties are found to be untrue, inaccurate or misleading in any material respect or in the event of a material adverse change in the financial position or prospects of the Group in the context of the Placing or Admission.

Under the Placing Agreement the Company has agreed to pay Cenkos a fee which will be settled in full in new Ordinary Shares issued at the Issue Price. The Company has also agreed to pay all other costs, charges and expenses incidental to the Placing and Admission.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Assuming that the Resolutions are passed, it is expected that Admission will become effective and dealings in the Placing Shares will commence at 8.00 a.m. on 27 May 2015.

Loan Note Instrument

In connection with the Placing and Loan Note Subscription, the Company has executed the Loan Note Instrument for the creation of unsecured Loan Notes of the Company in the aggregate principal amount of £383,598.72. Currently, no Loan Notes have been issued.

Conditional upon, inter alia, (i) the Placing Agreement not having been terminated, (ii) Admission and (iii) the passing of the Resolutions at the General Meeting, the Loan Note Subscriber has agreed to subscribe for Loan Notes pursuant to the terms of the Loan Note Instrument and the Loan Note Subscription Letter. Completion of the Loan Note Subscription is expected to take place in early August 2015.

Pursuant to the terms of the Loan Note Instrument the Loan Notes are redeemable on the Loan Note Maturity Date and in other limited circumstances. In addition, the Loan Notes are convertible into new Ordinary Shares at the Issue Price subject to the prior satisfaction of certain conditions including, but not limited to, (i) the conversion occurring no earlier than fifteen days after issue of the Loan Notes; and (ii) the conversion not resulting in the Loan Note Subscriber (or any person acting in concert with the Loan Note Subscriber) having an obligation to make an offer for the Company under rule 9 of the Takeover Code (or any such obligation being 'whitewashed').

Interest accrues on the principal amount of the Loan Notes outstanding at a rate of 5 per cent. per annum and will be payable in cash. Interest does not convert into new Ordinary Shares, but is repaid when the principal amount of Loan Notes to which it relates is either repaid or converted into new Ordinary Shares. The Loan Notes are not transferable except with the consent of the Company and those persons holding not less than 66.66 per cent. of the Loan Notes outstanding from time to time. To enable the Loan Notes to be issued and to provide for future flexibility it is proposed to amend the borrowing powers of the Company as set out in the Articles. Currently, the Company's borrowing limit is two times its adjusted capital and reserves. As the Company has significant intangible assets on its balance sheet its adjusted capital and reserves are currently a negative number. Consequently, it is proposed to amend the Articles to change the Company's borrowing limit to the greater of (i) £30 million and (ii) two times the Company's adjusted capital and reserves. Resolution number 3 in the Notice of General Meeting will be proposed as a special resolution at the General Meeting for this purpose.

Related Party Transaction and Relationship Agreement

As part of the Placing, it is proposed that Vesuvius, IAML and WIM will subscribe, at the Issue Price, for 5,555,556 Placing Shares, 10,878,769 Placing Shares and 5,555,556 Placing Shares respectively. The proposed allotment and issue of the above Placing Shares to Vesuvius, IAML and WIM will constitute a "Related Party Transaction" for the purpose of AIM Rule 13 as a result of Vesuvius, IAML and WIM being "substantial shareholders" as defined in the AIM Rules. As at the date of this announcement, Vesuvius holds 25.95 per cent., IAML holds 28.13 per cent and WIM holds 19.72 per cent. of the Existing Ordinary Shares. The Directors consider, having consulted with Cenkos, that the terms of the Related Party Transaction are fair and reasonable insofar as the Company's shareholders are concerned.

As at the date of this announcement, Vesuvius holds 25.95 per cent. of the Existing Ordinary Shares and is a party to the Relationship Agreement which regulates aspects of the relationship between the Company and Vesuvius. Currently, the only operative provision of the Relationship Agreement is the right of Vesuvius to nominate a director to be appointed to the Board, which right continues for so long as Vesuvius (together with its associates) have an interest in 10 per cent. or more of the issued share capital of the Company. The current nominated director is John Anthony Barnett. Certain other provisions of the Relationship Agreement which previously regulated aspects of the relationship between Vesuvius and the Company ceased to have effect when Vesuvius' shareholding (together with that of its associates) in the capital of the Company ceased to represent 30 per cent. or more of all voting rights in the Company. In certain circumstances, in the event that the voting rights attaching to Vesuvius' shareholding (together with that of its associates) in the capital of the Company will represent at least 30 per cent. of all voting rights in the Company at any time on or before 28 July 2015, the lapsed provisions of the Relationship Agreement will, once again, apply to Vesuvius.

Use of proceeds

The Placing will raise a gross amount of approximately £5 million and the Loan Note Subscription will raise a gross amount of £383,598.72. The net proceeds of the Fundraising are expected to provide the Company with working capital to fund the continued operations and improvements of the business as well as to accelerate its growth.

Acquisition updates and further issue of Ordinary Shares

Base79 Earn-out

Base79 was acquired by the Company in August 2014 for a total consideration of up to £51 million. The maximum purchase price of £51 million included a deferred element of up to a maximum of £25 million (the "Base79 Earn-out"). Subject to the satisfaction of certain earn-out conditions during the period which ended on 30 April 2015, the Base79 Earn-out is payable in Q3 2015. The current forecast range for the Base79 Earn-out is approximately £22 million to £24 million.

Subject only to the Company exercising its right to pay all or part of the Base79 Earn-out in cash, the Base79 Earn-out will be satisfied by the issue to the Base79 vendors of new Ordinary Shares. Such new Ordinary Shares will be issued at a price per Ordinary Share equal to the average closing mid-price for Ordinary Shares (as shown in the Daily Official List of the London Stock Exchange) for the five trading days prior to the date of payment of the Base79 Earn-out. If settlement in full of a Base79 vendor's share of the Base79 Earn-out in new Ordinary Shares would result in the issue to such vendor (together with its concert parties) of new Ordinary Shares representing more than 29.99 per cent. of the issued share capital of the Company ("the Ownership Threshold") the Company can only issue an aggregate number of new Ordinary Shares to such vendor (and its concert parties) equal to the Ownership Threshold. In such circumstances, and subject to the Company exercising its right to pay all or part of the relevant earn-out amount in cash, the balance of a vendor's share of the Base79 Earn-out will be satisfied by the Company issuing to the relevant vendor unsecured loan notes. Such unsecured loan notes would accrue interest at a rate of 10 per cent. per annum payable monthly with a maturity date of 5 years from the date of issue (subject to the right of the Company to repay earlier without penalty).

Viral Management Limited Deferred Consideration

VML was acquired by the Company in July 2014, for a total consideration of up to £4,049,750 payable in a mixture of cash and new Ordinary Shares. The maximum purchase price included an amount of up to £1,699,875 in deferred consideration ("VML Deferred Consideration"). The VML Deferred Consideration is payable following the first anniversary of completion of the acquisition of VML subject to certain milestones relating to the business of VML and the Company being achieved during the 12 months commencing on the first day of the calendar month immediately following completion of the acquisition. The VML Deferred Consideration will be satisfied by the payment of cash and new Ordinary Shares issued at the average Closing Price for the 20 Business Days preceding the date of payment of the VML Deferred Consideration. The Company will pay not less than 50 per cent. of the VML Deferred Consideration in cash (with the remainder in new Ordinary Shares) but can elect to pay up to 88.672 per cent. of the VML Deferred Consideration in cash (with the remainder in new Ordinary Shares).

Effect of the Placing, Loan Note Subscription and Admission

On Admission, the Enlarged Share Capital is expected to be 222,349,499 Ordinary Shares. On this basis, the Placing Shares will together represent approximately 12.5 per cent. of the Enlarged Share Capital.

In addition, the Loan Notes in the aggregate principal amount of £383,598.72 will, subject to the satisfaction of certain conditions, be convertible at the Issue Price into the Loan Note Shares. Assuming full conversion, the Loan Note Shares will represent approximately 0.95 per cent. of the Enlarged Share Capital. [1]

[1] Note: The calculation of the number of Loan Note Shares to be issued pursuant to the Loan Note Instrument is based on the conversion of all principal Loan Notes (excluding interest) at the Issue Price.

Irrevocable Undertakings

The Company has received irrevocable undertakings to vote, or to procure votes of Existing Ordinary Shares held, in favour of the Resolutions from the following Shareholders representing, in aggregate, 76.66 per cent. of the Existing Ordinary Shares:

Definitions contained herein shall have the same meaning as those defined in the Circular sent to Shareholders on 7 May 2015, which can be found on the Company's website at www.rightster.com