BIDS.L Regulatory News (BIDS)

Fitbug Holdings Plc / Epic: FITB.L / Index: AIM / Sector: Leisure

19 October 2010

Fitbug Holdings Plc ('Fitbug' or 'the Company')

Placing to raise £600,000 and trading update

Fitbug Holdings Plc, the AIM traded provider of online personal health and well-being services, has conditionally raised £600,000 by way of a placing by Seymour Pierce Limited of 60,000,000 new ordinary shares of 1 pence each in the Company ('the Placing Shares'), with new and existing shareholders, at a price of 1 pence per Placing Share ('the Placing Price') ('the Placing'). The funds raised will be used for working capital purposes. 

Upon Admission, the Placing Shares will represent 61.2 per cent. of the Enlarged Share Capital. At the Placing Price, the Company will have a market capitalisation of approximately £0.979 million. The Placing Shares will rank pari passu with the existing Ordinary Shares, including the right to all dividends and other distributions, paid or made after the date of issue.

The Placing is subject to shareholder approval and a Circular detailing its terms has been sent to Shareholders. Additionally, a General Meeting will be held at the offices of Finers Stephens Innocent LLP at 180 Great Portland Street, London W1W 5QZ on 4 November 2010 at 10.00 a.m.

Fitbug Limited Chief Executive, Paul Landau said, "2010 has been an important year for Fitbug as we continue to develop our service offerings with the aim of growing our customer base and improving our visibility in what is a rapidly growing sector. 

"Significantly, over the last few months we have experienced positive indications that the corporate market is once again willing to invest in workplace health programmes after a challenging 2009 in this sector. We have been successful in launching employee wellness programmes for a number of blue-chip clients, regularly using corporate challenges, which see employees competing to win virtual walking competitions.

"We have worked hard to establish new strategic partnerships, such as our launch earlier in the year with the US health & wellness company, 'The Vitality Group', and have formed new relationships such as our recent alliance with SCIFIT. We are optimistic that this new opportunity will allow Fitbug to make a footprint in the rehabilitation market on an international scale.

"Through the remainder of 2010 and into next year, we hope to capitalise upon both existing partnerships, some of which have grown in size and offer considerable potential for growth, and also confirming new strategic relationships. We are in talks with a number of parties, several of which are currently at advanced stages of negotiation in the health insurance and health care sectors. 

"In addition to these strategic alliances, we continue to build our core client base in the corporate arena and also within the public health sector. The results which are being achieved from our weight management service should lead to further opportunities in the restructured NHS.

"This placing will provide us with the necessary funding to facilitate the successful implementation of our growth strategy, which we believe has the potential to create value for our shareholders in the near to medium term." 

For further information visit www.fitbugholdings.com or contact:

Full Details

1. Introduction

The Company is pleased to announce the conditional placing of 60,000,000 Placing Shares to raise gross funds of £600,000 (of which certain of the Directors, being Allan Fisher, David Turner, Paul Landau and Geoffrey Simmonds, together with Pantheon Leisure Plc, have agreed to subscribe £210,000 in aggregate in the Placing). At the Company's annual general meeting held on 28 June 2010 the directors of the Company were granted authority by the Company's shareholders to allot up to 36,293,500 new Ordinary Shares of 1 pence each for cash in accordance with the provisions of the Companies Act 2006. The Directors have examined a number of suitable fund-raising opportunities for the Company and believe that the Placing is the most suitable opportunity available to the Company and that the Placing is in the best interests of the Shareholders as a whole. The Directors do not therefore have sufficient authority to allot the Placing Shares and accordingly the Resolutions, to be proposed at the GM, will grant the Directors the relevant allotment authorities in accordance with the Act. The Placing is conditional on, inter alia, the passing of the Resolutions at the GM.

Accordingly, the Directors have convened the General Meeting at which Shareholders will consider, and if thought fit, approve the granting of share allotment authorities to allot the Placing Shares. The GM will be held at 10.00 a.m. on 4 November 2010.

2. The Placing

The Company is proposing to raise £600,000 (before expenses) pursuant to the Placing by the allotment and issue of 60,000,000 Placing Shares at the Placing Price per share. Allan Fisher, David Turner, Paul Landau, Geoffrey Simmonds and Pantheon Leisure Plc are subscribing in aggregate 21,000,000 of the Placing Shares.

The Placing Shares being placed pursuant to the Placing will represent 61.2 per cent. of the Enlarged Share Capital. On Admission, at the Placing Price, the Company will have a market capitalisation of approximately £0.979 million. The Placing Shares will rank pari passu with the existing Ordinary Shares including the right to all dividends and other distributions, paid or made after the date of issue.

The Board intends to use the proceeds of the Placing to:

(a) provide working capital for the Group;

(b) meet the costs of the Placing.

Under AIM Rule 13 the participation in the Placing by Allan Fisher, David Turner, Paul Landau and Geoffrey Simmonds (together with their connected persons) (who are subscribing 5,000,000 Placing Shares, 6,000,000 Placing Shares, 5,000,000 Placing Shares and 2,000,000 Placing Shares respectively) are related party transactions for the purposes of the AIM Rules. Andrew Brummer, considers, having consulted with Seymour Pierce, that the terms of that transaction (being those Directors' participations in the Placing) are fair and reasonable insofar as the Shareholders are concerned.

Under AIM Rule 13 the participation in the Placing by Pantheon Leisure Plc (which is subscribing 3,000,000 Placing Shares) (as it is a substantial shareholder within the meaning of the AIM Rules) is also a related party transaction. Allan Fisher, David Turner, Paul Landau and Andrew Brummer consider, having consulted with Seymour Pierce, that the terms of that transaction (being the participation of Pantheon Leisure Plc in the Placing) are fair and reasonable insofar as the Shareholders are concerned.

3. Irrevocable undertakings

The Company has received an irrevocable undertaking to vote in favour of the Resolutions from Pantheon Leisure Plc, which has a beneficial interest in 3,254,000 Ordinary Shares representing approximately 8.57 per cent. of the Issued Share Capital.

Allan Fisher, David Turner, Paul Landau and Geoffrey Simmonds (which excludes for these purposes the holding of Pantheon Leisure Plc) have also undertaken to vote in favour of the Resolutions in respect of their aggregate beneficial holdings of 8,912,227 Ordinary Shares representing approximately 23.46 per cent. of the Issued Share Capital.

In aggregate, irrevocable undertakings to vote in favour of the Resolutions have been received by the Company in respect of 12,166,227 Ordinary Shares representing approximately 32.03 per cent. of the Issued Share Capital.

4. Directors' interests

As at 15 October 2010 (the latest practicable business day prior to the date of this document), and immediately following the Placing and Admission, insofar as known to the Company, the interests of the Directors and their immediate families and those of any connected person (within the meaning of the Act), the existence of which is known to, or could with reasonable diligence be ascertained by, that Director whether or not held through another party, in the share capital of the Company are as follows:

Note (1): The interest of Geoffrey Simmonds in the above table includes the holding of 3,254,000 Ordinary Shares held by Pantheon Leisure Plc (a company connected with Geoffrey Simmonds in accordance with the Act) and also the holding of Pantheon Leisure Plc following its subscription of 3,000, 000 Placing Shares.

5. Current Trading and Profit Forecast

For the year ending 31 December 2010, the Company anticipates revenue of £1.3 million resulting in a gross profit of approximately £0.8 million and an operating loss for the year of approximately £0.6 million. The Group projects revenue for 2011 to increase to approximately £3 million which includes revenue from existing accounts, some of which have grown significantly in size and offer significant potential for growth, and from new relationships including several which are currently at advanced stages of negotiation in the health insurance and health care sectors. This projected revenue will bring the Group into profitability at the operating level in 2011. Whilst the Board is confident that from the current pipeline of potential new business this revenue figure can be secured, there can be no guarantee that the Company will be successful in achieving the projections. Furthermore, the forecast for the outcome to 31 December 2010 and to 31 December 2011 (and the underlying assumptions on which they are based) relate to the future and may therefore be affected by unforeseen events and therefore they may not be achieved and any differences may be material.

6. The General Meeting

The General Meeting of the Company is to be held at the offices of Finers Stephens Innocent LLP at 180 Great Portland Street, London W1W 5QZ on 4 November 2010 at 10.00 a.m.

7. Admission

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Placing Shares will commence on 5 November 2010.

**ENDS**