Tavistock Regulatory News (TAVI)

30 Nov 2007 07:00

Bright Things plc30 November 2007 Bright Things plc29 November 2007 Bright Things plc ('Bright Things' or the 'Company') Acquisition, Placing and Notice of General Meeting The Directors of the Company are pleased to announce the that the Company hastoday entered into an acquisition agreement relating to the proposed acquisitionof the entire issued share capital of Commonworld Ltd (the 'Acquisition' or'Commonworld') and that it has raised £955,000 (before expenses) through theconditional placing of 23,875,000 new Ordinary Shares at 4 pence per share (the'Placing'). As announced in the results for the period ending 31 March 2007 and subsequentlyin the interims, the Board has been reviewing a number of new initiatives andopportunities with a view to growing the business and, in doing so, create valuefor Shareholders. Work continues on the Company's current business and the TigerWoods PGA Tour 07 game has been launched on schedule with over 30,000 unitsordered. In addition, the Company continues to explore new opportunities for theASIC chip. Notwithstanding the Board's belief in the potential of the currentbusiness, it now believes that in order to grow the Company a new productinitiative is required to complement and add to the existing products. To proceed with the Acquisition and Placing the Company needs to effect acapital reorganisation, involving the sub-division of each of the OrdinaryShares into one new Ordinary Share and one Deferred Share. The Company will today send a circular to shareholders to convene a GeneralMeeting for the purpose of passing the certain resolutions to permit theAcquisition and Placing to proceed and to effect the Capital Reorganisation. 1. Description of the Business of Commonworld Commonworld was established in November 2006 in order to develop a socialnetworking platform to allow the creation of web based communities. The firstsuch product, "Social Network Maker", is under development and designed toprovide a secure, dedicated social network for groups and organisations. Whilst "Social Network Maker" will be akin to social network sites on theInternet such as Facebook, MySpace or Bebo it is distinct by virtue of itenabling organisations and groups to create and maintain closed user socialnetworks. Upon completion of the development of the product the Directors areintending initially to sell "Social Network Maker" as a boxed CD ROM throughretail outlets, and online, for a fixed price. The price paid by the user willinclude the hosting of the user's social network for an initial 12 month period.Thereafter it is intended that users would pay a monthly subscription tocontinue to use the product and for the Company to host the user's socialnetwork, according to the number of members in the network. "Social Network Maker" is designed to be highly customisable in both design andlayout to suit the specific requirements of the user. The Directors considerthere are numerous types of groups for whom "Social Network Maker" could becomean indispensable tool, be it for schools, companies, local sports leagues orsimply extended family networks. Commonworld, by virtue of its recent incorporation, has yet to publish anyfinancial results but has carried out limited transactions to date and its onlyasset on completion of the Acquisition will be the Intellectual Property behindthe social network platform. Immediately following the Acquisition, Get on WithIt Limited ('GOWIT'), a company controlled by the vendors of Commonworld will becontracted to complete the development of the Social Network Maker product. 2. Details of the Acquisition Under the terms of the Acquisition Agreement the Company has agreed to acquirethe entire issued share capital of Commonworld for the issue upon completion ofthe Acquisition of the 7,500,000 Ordinary Shares in the Company. Subject to thedevelopment and testing of the Social Network Maker product being completed bynot later than 31 July 2008, the Company has agreed to issue to the vendors ofCommonworld a further 3,091,250 new Ordinary Shares. In addition, if the netproceeds of sales of the Social Network Maker product in the period of two yearsfollowing the commercial launch exceed £2,000,000, the Company has agreed toissue to the vendors of Commonworld a further 3,091,250 new Ordinary Shares. Themaximum aggregate number of new Ordinary Shares that may be issued pursuant tothe Acquisition Agreement is 13,682,500 new Ordinary Shares. Assuming no furtherissue of new Ordinary Shares is made by the Company following completion of theAcquisition and Placing, other than the issue of all the new Ordinary Sharespursuant to the Acquisition Agreement, the Consideration Shares would representapproximately 20.1% of the enlarged issued share ordinary share capital of theCompany. The Acquisition represents a substantial transaction under the AIMRules. Based on the mid-market price of an Ordinary Share at the close of business on28 November 2007 (the latest practicable date prior to the printing of thisdocument) of 5.88p, and on the basis of the issue of all of the ConsiderationShares to which the vendors of Commonworld may become entitled, the Acquisitionvalues Commonworld Ltd at £804,531. The Initial Consideration Shares will represent approximately 12.1 per cent. ofthe issued ordinary share capital of the Company immediately followingcompletion of the Acquisition and Placing. The Acquisition Agreement is conditional, inter alia, on completion of thePlacing and Admission. GOWIT has been granted a licence of the IP by Commonworld under which GOWIT isgranted rights that will permit it to support and host seven websites developedfor third parties using the IP. The licence also permits GOWIT to use andlicence the IP to develop, support and host further bespoke websites forclients, with the prior written consent of Commonworld, in respect of whichCommonworld will be entitled to a 15% royalty. Under the services agreement pursuant to which GOWIT has agreed to develop"Social Network Maker", Commonworld has agreed to pay GOWIT a royalty of 7.5% onall sales of "Social Network Maker" in excess of £2 million, in addition to thefees and expenses payable to GOWIT for the provision of services. 3. Details of the Placing The Company has conditionally raised £955,000 (before expenses) by the issue ofthe 23,750,000 new Ordinary Shares at 4p. The Placing Shares will, when issued and fully paid, rank pari passu in allrespects with the new Ordinary Shares in issue following the CapitalReorganisation. Application will be made for the Placing and Considerationshares to be admitted to AIM and are expected to be admitted to trading on AIMon 27 December 2007. 4. Directors Dealing Dominic Wheatley, chief executive of the Company and Ian Livingstone, Chairmanof the Company are subscribing for respectively 2,500,000 and 1,250,000 PlacingShares pursuant to the Placing, representing respectively approximately 10.5 percent. and 5.2 per cent. of the Placing Shares. Immediately following the issueof the Initial Consideration Shares and the Placing Shares and Admission,Dominic Wheatley will be interested in 8,205,102 new Ordinary Shares,representing approximately 13.63 per cent. of the issued ordinary share capitalof the Company and I will be interested in 1,305,556 new Ordinary Shares,representing approximately 2.11 per cent. of the issued ordinary share capitalof the Company. Taken in aggregate the Directors' subscription would represent a related partytransaction under the AIM Rules. Edward Levey and Matthew Tims, as independentdirectors in respect of this transaction, consider, having consulted with theCompany's nominated adviser, that the terms of the transaction are fair andreasonable as far as the shareholders are concerned. 5. The Capital Reorganisation The Placing Price of 4 pence is below the nominal value of an Ordinary Sharebeing 10 pence. Ordinary Shares may not be issued below their nominal value.Accordingly, at the General Meeting it is proposed to sub-divide each issuedOrdinary Share of 10 pence into one new Ordinary Share of 1 penny and oneDeferred Share of 9 pence. The rights attaching to the Deferred Shares will beminimal so that the equity value of the Company will effectively be attributedentirely to the new Ordinary Shares. It is also proposed to sub-divide each ofthe unissued Ordinary Shares into 10 new Ordinary Shares of 1 penny. In duecourse it is intended that the Deferred Shares will be cancelled as part of acapital reconstruction. 6. The General Meeting The General Meeting has been convened for 10:30am on the 24th December 2007 atthe offices of Faegre & Benson LLP, 7 Pilgrim Street, London EC4V 6LB. The circular, containing full details of the resolutions, is available on theCompany's website: www.brightthings.com For further information please contact: Bright Things PLC 0870 351 7770Dominic Wheatley, CEOEdward Levey, Finance Director HB CorporateLuke Cairns/ Rory Creedon Tel: +44 (0) 207 510 8600 Brunswick GroupGiles Croot / Mark Antelme, Tel: +44 (0) 207 404 5959 This information is provided by RNS The company news service from the London Stock Exchange