24 Dec 2008 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION IS UNLAWFUL.
24 December 2008 Amteus plc ("Amteus" or the "Company")
Trading update, placing to raise ‚£750,000 and royalty agreement with related party
Trading Update
Further to the trading update released on 19 September 2008, the Board of Amteus is pleased to announce the successful launch and roll-out to schools of the Company's imJack Web 2.0 product.
The imJack product, which is a web-based, secure solution for communication and collaboration in education, allowing learners, parents and teachers to interact and communicate in an enclosed and private environment, has been actively marketed and sold to schools across the UK in November and December.
During this time, 176 schools, representing 168,000 users, have signed up to use the imJack communications system and over 100,000 teachers have also committed to use the product, making a total of 268,000 users. This compares to the initial target previously announced of 1,000 schools and 1 million users within the first 12 months.
Amteus is continuing discussions with a number of potential corporate sponsors, who recognise the growth potential of imJack and the inherent value of highly targeted marketing campaigns to its quantifiable user base. The Directors of Amteus are confident that the rapid growth of the product's active user base will encourage sponsors to commit to campaigns in the first quarter of 2009.
The Company is also at an advanced stage of discussions with a national not for profit organsiation with a view to it adopting the imJack platform as the basis for a multi user public facing website. If these discussions are successful, it is likely to lead to a fully sponsored rollout of the proposed website with the support of a global corporation.
The Placing
Amteus also announces that it has conditionally raised ‚£750,000, before expenses, from the placing of 7,500,000 ordinary shares in the capital of the Company ("Ordinary Shares") at 10p (the "Placing Price") per share (the "Placing Shares") with institutional and other investors (the "Placing"). The Placing is conditional on admission of the new Ordinary Shares to trading on AIM ("Admission").
The cost of developing and bringing the Company's products to market, combined with the fact that the Company has not yet achieved sufficient levels of sales to achieve profits and cash breakeven, has resulted in continuing losses. The proceeds of the Placing, which amount to approximately ‚£725,000 after expenses, will allow the Company to satisfy certain trade creditors and provide additional working capital for at least the next four months, by which time the Board will have greater visibility of product sales and other potential revenues.
In the event that the expected level of sales, which includes advertising and sponsorship revenues, is not reached in the next four months, the Company will be required to raise additional funds. Should Amteus be unsuccessful in raising these further funds or should the Placing be unsuccessful, this is likely to have a material adverse effect on the Company's financial position and operations and it would be obliged to seek alternative financing solutions, including an early sale of the business.
Directors' participation in the Placing
Pursuant to the terms of a placing letter dated 17 December 2008 between the Company and Jeffrey Morris, Executive Deputy Chairman, he and his wife, Debra Morris, have conditionally agreed to subscribe for 2,900,000 Ordinary Shares in the Placing, which will represent 4.71 per cent. of the enlarged issued share capital of the Company (the "Enlarged Issued Share Capital").
In addition, pursuant to the terms of a placing letter dated 17 December 2008 between the Company and Michael Abrahams, Non-executive Chairman, he has conditionally agreed to subscribe for 1,000,000 Ordinary Shares in the Placing, which will represent 1.62 per cent. of the Enlarged Issued Share Capital.
Immediately following Admission, Jeffrey Morris and Michael Abrahams will hold 27,179,337 Ordinary Shares and 1,133,021 Ordinary Shares, which will represent 44.36 per cent. and 1.85 per cent. of the Enlarged Issued Share Capital, respectively.
Following the proposed Placing, the Company will have 61,263,323 ordinary voting shares in issue. It is intended that application will be made for the Placing Shares to be admitted to trading on AIM. Dealings are expected to commence on 5 January 2009.
Mr Abrahams and Mr Morris, as directors of the Company, are related parties for the purposes of the Placing. The independent directors of Amteus, having consulted with John East & Partners Limited ("JEP"), the Company's Nominated Adviser, consider the terms of the Placing to be fair and reasonable insofar as the Company's shareholders are concerned. In advising the independent directors, JEP has taken into account the commercial judgement of the independent directors.
Royalty agreement with related party
Amteus announces that it has entered into a royalty agreement (the "Agreement") with The Media Buzz Limited ("Mediabuzz"). Under the Agreement, Amteus will pay a royalty to Mediabuzz for each sale of its secure communication product, the imJack Web 2.0 product. Mediabuzz has funded a large proportion of the imJack Web 2.0 development costs, which have been in excess of ‚£500,000 to date. The Company has therefore entered into the Agreement for the rights for the web 2.0 technology for the Education sector.
Under the Agreement, Amteus will pay Mediabuzz royalties amounting to 10 per cent. of revenues.
Jeffrey Morris, the Executive Deputy Chairman of Amteus, and his wife, who together, prior to the Placing, hold 45.16 per cent. of the issued share capital of Amteus, together own the entire issued share capital of The Media Buzz Holdings Limited ("Mediabuzz Holdings"), the parent company of Mediabuzz. Michael Abrahams, the Chairman of Amteus, is also a director of Mediabuzz Holdings.
Under the AIM Rules, the Agreement is with a related party. The independent directors of Amteus, having consulted with JEP, the Company's Nominated Adviser, consider the terms of the Agreement to be fair and reasonable insofar as the Company's shareholders are concerned. In advising the independent directors, JEP has taken into account the commercial judgement of the independent directors.
Enquiries:Amteus plc Today only: 01653 618 016 Michael Abrahams (Chairman) Tel: 020 7628 2200 John East & Partners Limited Tel: 01653 618 016 John East/Simon Clements Rawlings Financial PR Limited Catriona Valentine
This announcement is for information purposes only and does not constitute an offer or invitation to acquire or dispose of any securities or investment advice in any jurisdiction.
John East & Partners Limited, which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to customers of John East & Partners Limited or for providing advice in relation to the Placing or any transaction or any other matters referred to herein.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
The information contained in this announcement is not for release, publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or the Republic of South Africa or in any jurisdiction in which such publication or distribution is unlawful. The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended, or under the laws of any state of the United States. This announcement does not constitute an offer to sell or issue, or the solicitation of an offer to buy or subscribe for, securities in the United States, Australia, Canada, Japan or the Republic of South Africa or in any jurisdiction in which such offer or solicitation is unlawful and should not be relied upon in connection with any decision to acquire Placing Shares or other securities in the capital of the Company. There will be no public offer of Placing Shares in the United Kingdom or elsewhere.
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