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.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES"), CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

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

Proposed Placing and Notice of General Meeting

Rightster Group plc (LSE AIM: RSTR), a specialist in capturing and creating advertising spend using its expertise in online video content and audience management, today announces details of a proposed placing.

On 27 November 2015, Rightster's new board announced that it was concluding the strategic review process and focusing on seeking further investment in the Company. The board is now pleased to report details of a proposed placing of new ordinary shares in the Company.

· Placing of 200,000,000 new ordinary shares of 0.1 pence each (the "Placing Shares") at 5 pence per share

· Raises £10 million before expenses

· Supported by both existing and new institutional shareholders

· Strong participation by management (and relatives) in the Placing

· Requires approval of shareholders at a general meeting expected to be held on 6 January 2016

· Admission to trading on AIM expected on 7 January 2016

Ashley MacKenzie, CEO, commented:

"Richard and I joined the Board just a month ago and shared our vision for the business with existing and new institutional investors. They embraced the change and are now investing £10 million so Rightster can move into a more exciting and commercially efficient direction. I'm hugely excited to be leading the company in to the next stage of its growth"

For further information visit www.rightster.com or please contact:

Introduction

The Company announced today that it proposes to raise £10 million (before expenses) by means of a placing, with existing and new investors, of 200,000,000 Placing Shares at a price of 5 pence per new Ordinary Share. The Issue Price represents a discount of approximately 47.4 per cent. to the Closing Price on 17 December 2015, being 9.5 pence per Ordinary Share.

The Placing is conditional, inter alia, on the approval of shareholders at a general meeting expected to be convened for 6 January 2015.

The Company announced on 26 October 2015 that it intended to make certain changes to the Board of Directors of the Company. Supported by major shareholders, Rightster confirmed the appointment of a new management team on 17 November 2015, with immediate effect. Ashley MacKenzie, previously co-founder and CEO of Base79 Limited, was appointed Chief Executive Officer of the Company. Richard Mansell, previously co-founder and COO of Base79 Limited, was appointed Chief Operating Officer. Sir Robin Miller, formerly Chief Executive and Chairman of Emap plc, one of the UK's leading media groups, was appointed as non-executive Chairman. Mark Cranmer, a former global executive director of Dentsu Aegis, was appointed non-executive director. Patrick Walker, stepped down as CEO and continued as an employee of the Company for the limited purpose of ensuring a smooth handover to the new management team. Patrick Walker will formally cease to be an employee of the Company on 31 December 2015 and will continue to serve on the Board as a non-executive director. Mark Lieberman (non-executive chairman), Michael Broughton (non-executive director) and David Mathewson (non-executive director) all stepped down from the Board. Niall Dore (CFO) and John Barnett (non-executive director) remain on the Board. Following Admission the SIP Agreement will be terminated by mutual agreement of the parties to that agreement and in accordance with the terms of that agreement.

In light of the Board's evolving plans for the business, on 27 November 2015, the Company announced its decision to conclude the strategic review process and focus on seeking further investment in the Company.

Background to and reasons for the Placing and new Business Plan

With the skills and experience of the new board members, Rightster intends to transform the business from a third party technology provider to a business creating and capturing advertising spend using its expertise in online video content and audience management. The Directors believe that this will enable Rightster to become a leading social video manager and producer with significant global reach among Millennials (being persons born in the 1980s and 1990s) as well as the younger generations. To reach its objectives the management team will focus its efforts on following the path to profitability outlined below:

1. Rationalising the business to focus on enterprise-level customers

Rightster previously acquired 4 businesses in 18 months and the management team believes that the Company's resource allocation is not focused on the right revenue opportunities and that the Company needs to be rationalised and re-focused on enterprise partners. The business will be simplified including by winding down investment in non-core operations.

2. Investing in Owned & Operated Channels

To build defensible advantage and on-going equity value, the Company will invest in creating Owned and Operated Channels, targeting the Millennial generation and taking ownership of the audiences that these channels will develop. This will require the strengthening of the creative and production teams and investment in brand specialisations to strengthen the current commercial offering. The aim is to become a leading global player in video content marketing with particular emphasis on social talent.

3. Generating additional revenues

The ability of the Company to create bespoke content for its clients will be leveraged by improved sales efforts that will focus on content marketing using video and benefit from the new management and board expertise in the digital content and marketing ecosystem.

The $230 billion global TV advertising market faces challenges as audiences move increasingly to multiple online video platforms through new devices. As advertising spend relentlessly follows the changing trends in media consumption, growth in the online video advertising market is strong and the budget for TV advertising is progressively shifting. A recent report by ZenithOptimedia predicts global advertising expenditure will reach $545 billion by the end of 2015. Within this global advertising expenditure, it is estimated that online video is growing faster than any other digital category or sub-category, growing 34 per cent. to $10.9 billion in 2014, and forecast to grow at an average of 29 per cent. a year to reach an estimated $23.3billion in 2017. However, online advertisers are challenged in improving ROI as ad-blockers are becoming a more prevalent technology among consumers and standard display and pre-roll advertisements are failing to engage consumers. Rightster's re-positioning is in line with these trends as content marketing enables advertisers to mitigate ad blockers and banner noise by embedding their messages within the content being created.

The Directors believe that the Company is well positioned to capitalise on the opportunities in the market as many of the key components required to deliver on the vision are already in place. Brands can find some of the most influential content creators such as Remi Gaillard - one of the largest YouTubers in France by views - on the Rightster network, reach TV scale online audiences and benefit from the Company's social platform expertise and its previous significant investment in its own technology platform. The added content creation and advertising creative capabilities will strengthen Rightster's offering and provide additional credentials to the business.

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

• Content and audience creation

Rightster already manages large volumes of content and their attendant audiences. The Company aims to invest in more Owned & Operated Channels creating unique environments and audiences through which advertisers can communicate their messages.

• 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.

• Advanced managed services

Rightster offers a number of professional services enabled by its technology platform across multiple territories helping enterprise clients maximise their audiences and revenues from their content investments.

• Flexible monetisation models

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

The Directors of the Company are planning to put in place a new option pool of up to 12.5 per cent. of the Company's total issued share capital post completion of the Placing. Share options issued under the scheme will be subject to vesting arrangements as determined by the remuneration committee of the Board. The Company has the existing shareholder authorities necessary to grant options under the new option pool.

The executive directors will receive options equivalent to post Placing issued share capital as follows: (i) Ashley MacKenzie 3%; (ii) Richard Mansell 2%; and (iii) Niall Dore 1.25%, all exercisable at the Placing Price. The remaining options in the scheme will be available for issue, exercisable at the market price at the date of issue, to attract new members of staff and for the incentivisation of existing Company employees over the 10 year period of the scheme's life.

Use of proceeds

The Placing is expected to raise gross proceeds of £10 million. The net proceeds of the Placing will allow the Company to invest in Owned and Operated Channels, enable the business to be restructured and provide working capital to fund the continued operations of and improvements in the business.

The Board currently expects to use £5.5m of the funds raised to invest in Owned and Operated Channels and to provide working capital, £2.0m in restructuring costs and the remainder will be used to fund an employee benefit trust and provide for professional fees and contingencies.

The Placing

The Company has conditionally placed 200,000,000 new Ordinary Shares at 5 pence per share with existing and new investors to raise £10 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.

Certain of the Directors and their family members have committed to subscribe an aggregate amount of approximately £0.8 million for new Ordinary Shares in the Placing at the Issue Price.

The Placing Agreement

In connection with the Placing, the Company and Westhouse have entered into the Placing Agreement pursuant to which Westhouse has agreed to use its reasonable endeavours to procure subscribers at the Issue Price. The Placing is not underwritten.

The Placing is conditional upon, inter alia, the passing of the Resolutions at the General Meeting without amendment, the Company having complied with each of its obligations under the Placing Agreement and Admission of the Placing Shares taking place on or before 7 January 2016 (or such later time and date as the Company and Westhouse may agree, being no later than 29 January 2016).

The Placing Agreement contains customary warranties and an indemnity from the Company in favour of Westhouse together with provisions which enable Westhouse 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 or in the event of a material adverse change in the financial position or prospects of the Group.

In consideration of Westhouse's services under the Placing Agreement the Company has agreed to pay Westhouse a fee to be paid upon Admission. 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 7 January 2016.

Related Party Transactions, Relationship Agreement and Directors' Participations

As part of the Placing, it is proposed that James Russell DeLeon, IAML and WIM will subscribe, at the Issue Price, for 30,000,000 Placing Shares, 45,300,000 Placing Shares and 69,300,000 Placing Shares respectively. The proposed allotment and issue of the above Placing Shares to James Russell DeLeon, IAML and WIM will constitute a related party transaction for the purpose of AIM Rule 13 as a result of each of Vesuvius (in which James Russell DeLeon is beneficially interested), IAML and WIM being substantial shareholders as defined in the AIM Rules. As at the date of this announcement, Vesuvius holds 15.2 per cent., IAML holds 17.8 per cent. and WIM holds 11.9 per cent. of the Existing Ordinary Shares. As the Directors are either participating in the placing, as set out further below or, in the case of Jack Barnett, act as a nominee director appointed by Vesuvius, there are no independent Directors for the purpose of AIM Rule 13. In relation to the participation in the Placing by each of James Russell DeLeon, IAML and WIM, Westhouse Securities Limited, as the Company's Nominated Adviser, considers that the terms of the participations are fair and reasonable insofar as the Company's shareholders are concerned.

As at the date of this announcement, Vesuvius holds 15.2 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. 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.

As part of the Placing, the following Directors will subscribe, at the Issue Price, for 6,050,000 Placing Shares in aggregate, as detailed below:

RISK FACTORS

The risks described below are not the only ones faced by the Group. In addition, further risks which are not presently known or are currently deemed to be less material, may also impair the Group's business, financial condition, or results of its operations and its prospects would suffer accordingly.

The Group cannot be certain that it will achieve profitability

Any adverse events relating to the Group's business, or a significant delay in the introduction of anticipated new revenue streams, or a shortfall in such revenue streams in relation to the Group's expectations, would have an immediate adverse effect on the Group's business, operating results and financial condition. There can be no assurance that the Group will be able to introduce identified cost savings or become profitable in any future period. The Group is subject to the risks inherent in the operation of a small and evolving business. It may not be able successfully to address these risks.

The Group's competitors may take actions which adversely affect revenues, profits or the Group's financial condition

The Group operates within competitive markets. The Board believes that it has adopted a competitive business strategy. However, the Group's business, results, operations and financial condition could be materially adversely affected by the actions of its competitors. The Group's competitors could bring superior scale, better known brands, deeper experience or more compelling products to bear against the Group's existing and potential business. Intense competition could increase pricing pressure in the market manifested, for example, through declining revenue shares, or increased reliance on the payment of advances ahead of commercial deals. If the Group is not able to compete successfully against existing or future competitors, its competitive position, business, financial condition and results of operations may be adversely affected.

Technological innovation is progressing quickly and the Group may fail to keep pace or make the wrong choices

Customer preferences across the breadth of the Group's platform and commercial offerings are subject to fast and relatively unpredictable change, as advances in technology progress. Recent changes have included proliferation of device types, operating systems, video formats and delivery methods and further changes are difficult to predict. If the Group fails to adapt sufficiently quickly to any changes, there is a risk that revenue will be lost and ultimately that its proposition will become less competitive in the market. Technology may progress to the point that in-house bespoke solutions become so efficient to build and adapt that the Group's proposition may become obsolete, which would materially adversely affect the Group's business, financial condition and/or operating results.

Failure to retain key executives, officers, managers and technical personnel could adversely affect the Group's operating and financial performance

Retaining and motivating technical and managerial personnel is a critical component of the future success of the Group's business. The departure of any of the Group's relatively small number of executive officers or other key employees could have a negative impact on its operations. In the event that future departures of employees occur, the Group's ability to execute its business strategy successfully, or to continue to provide services to its customers and users or attract new customers and users, could be adversely affected. The performance of the Group depends, to a significant extent, upon the abilities and continued efforts of its senior management. The loss of the services of any of the key management personnel or the failure to retain key employees could adversely affect the Group's ability to maintain and/or improve its operating and financial performance.

INDICATIVE TIMETABLE

Notes:

(1) References to times in this announcement are to London time (unless otherwise stated).

(2) The dates and timing of the events in the above timetable and in the rest of this announcement are indicative only and may be subject to change.

(3) If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement through an RIS.

PLACING STATISTICS

Notes:

(1) Closing Price on AIM on 17 December 2015, being the last practicable Business Day prior to the date of this announcement.

(2) As at 17 December 2015, being the last practicable Business Day prior to the date of this announcement.

(3) Being the percentage discount which the Issue Price represents to the Closing Price on AIM on 17 December 2015.

(4) Assuming the issue of all the Placing Shares.

DEFINITIONS

The following definitions and terms apply throughout this announcement, the Document and in the Form of Proxy unless otherwise stated or the context requires otherwise:

The Document is expected to be sent to Shareholders shortly and will also be available on the Company's website: http://rightster.com/about/investors