IMJ.L Regulatory News (IMJ)

7 Sep 2009 14:23



imJack Plc

("imJack" or the "Company")

Consultancy Agreement

Issue of Ordinary Shares

imJack Plc (AIM: IMJ), the digital educational networking and media business, is pleased to announce that  further to the announcement made on 28 August 2009, the Company has today entered into a consultancy agreement (the "Consultancy Agreement") and share option agreements (the "Share Option  Agreements") with Tanya Byron, Anthony Lilley OBE and Samantha Richards (together "TAS"), which the Directors believe will allow the Company to significantly enhance the speed of the roll out of its imJack technology platform (the "Platform").

Professor Tanya Byron and Anthony Lilley OBE are extremely well regarded in both the education and media sectors, having provided strategic advisory services to both public and private sector organisations.

Under the terms of the Consultancy Agreement, TAS will undertake certain marketing and operational activities, the extent of which will be dependent upon the Company's available working capital. The Company is currently exploring a number of opportunities which would result in further working capital being generated and announcements will be made in respect of any developments in due course.

The operational and marketing activities mentioned above are intended to include, inter alia:

a PR campaign to raise the profile and awareness of the Platform through national media;

a major education sector marketing campaign, using specialist media, conferences and professional bodies;

increasing awareness of the Platform through public affairs and channels into the government Department for Children, Schools and Families, Ministers and Cabinet committees; and

further enhancing product development via contributions to safety and commercial policies, product design and industry partnerships.

The Directors anticipate that these activities will enable the Company to obtain scale more quickly, by increasing the speed at which the Platform can be rolled out into schools across the UK.

In consideration of the services to be provided under the terms of the Consultancy Agreement cash payments of £24,000 per month will be made to TAS. The Company has paid £24,000 to TAS as at the date of this announcement.

Under the terms of the Share Option Agreements, TAS have been granted with an initial option to subscribe for 1,800,000 ordinary shares of 1 pence each in the Company ("Ordinary Shares") (the "Initial Option"), at a subscription price of 7 pence per Ordinary Share. In addition, TAS has been granted an option to subscribe for a further 7,200,000 Ordinary Shares, at a subscription price of 7 pence per Ordinary Share, subject to satisfaction of the condition that the Platform has been installed in 4,000 schools by 30 November 2009 (the "Conditional Option"). Achievement of this condition would result in options over an aggregate of 9,000,000 Ordinary Shares being exercisable by TAS, equivalent to 7.5 per cent. of the issued ordinary share capital of the Company, as enlarged by the issue of the options.

In the event that the Platform has not been installed in 4,000 schools by 30 November 2009 but has been by 31 March 2010, then the Conditional Option granted to TAS shall instead be an option to subscribe for a further 4,800,000 Ordinary Shares at a subscription price of 7 pence per Ordinary Share. Achievement of this condition would result in options over an aggregate of 6,600,000 Ordinary Shares being exercisable by TAS, equivalent to 5.6 per cent. of the issued ordinary share capital of the Company, as enlarged by the exercise of the options.

The Initial Option shall be exercisable for a period of nine years from the date the Consultancy Agreement is signed.

Under the terms of the Share Option Agreements, the condition that the Platform be installed in 4,000 schools may be waived at the discretion of the Company, and the Board intends to waive the condition in the event that the Platform installation target has been substantially met and the Board considers it is likely to be met in due course. In addition, the target dates for satisfaction of the conditions contained in the Conditional Option, namely 30 November 2009 and 31 March 2010, may be altered to later dates in the event that the Platform is not ready to be installed in sufficient time.

The option holders have undertaken not to sell or otherwise dispose of any Ordinary Shares arising on the exercise of the Initial Option for a period of 12 months from the date of the exercise.

The Directors are confident that the terms of both the Consultancy Agreement and the Share Option Agreements will provide TAS with the necessary incentive to aggressively pursue the roll out of the Platform into both primary and secondary schools.

Working Capital

Pursuant to the Company's announcements on 19 May 2009 and 28 August 2009, and subject to market conditions and various assumptions, the Company's current business model assumes that sufficient revenue will be generated in the final quarter of 2009 and beyond, such that no further external funding will be required in addition to a loan facility, which will be provided by Jeffrey Morris, a substantial shareholder in the Company (the details of which were contained in the Company's RNS announcement made on 19 May 2009).  As is customary for a business in the early stages of development, it is difficult to predict the timing of revenues with accuracy and, in the event that revenues are materially delayed or are materially less than those anticipated by the Directors, further funding may be required to finance working capital. There can be no guarantee that such funding will be available.

Issue of Ordinary Shares

The Company also announces that it has today issued a total of 2,041,149 Ordinary Shares, partly in lieu of salary payments to Directors and partly in lieu of cash payments due to certain creditors.

Mr Michael Abrahams, Mr Len Sanderson and Mr Richard Addis, Directors of the Company, have been issued with 178,571, 237,748 and 81,973 Ordinary Shares respectively. The Ordinary Shares were issued in lieu of amounts falling due under their respective Directors service contracts as at 31 August 2009. Following the issue of Ordinary Shares their total shareholdings can be summarised as follows:

In addition certain creditors of the Company have been issued with 1,542,857 Ordinary Shares in lieu of a total cash payment of £113,000.

Following the issue of the Ordinary Shares, the Company will have 111,463,622 Ordinary Shares in issue. Application will be made for a total of 2,041,149 Ordinary Shares to be admitted to trading on AIM. Dealings in these shares are expected to commence on 11 September 2009.

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