Last checked at 24 Dec 2009 13:14
Bright Things Plc
Acquisition, Placing and Appointment of Directors
Bright Things plc ("Bright Things" or "Company") is pleased to announce it has conditionally agreed to acquire the entire issued share capital of Get On With It Limited ("GOWIT") ("the Acquisition"), raise £500,000 of new working capital for the Company ("the Subscription") and appoint a new non-executive director.
Background to the Acquisition
In November 2007, the Company acquired CommonWorld Limited ("CommonWorld") which owns the intellectual property underpinning the Company's SocialGO networking product. At that time, CommonWorld entered into a services agreement with GOWIT pursuant to which GOWIT agreed to provide development and support services to Bright Things in relation to SocialGO. Under the terms of the Services Agreement, the Company has been paying a monthly fee to GOWIT for its services, including the employment costs of GOWIT employees. The services agreement further provides that GOWIT is entitled to a royalty of 7.5 per cent. on all net sales of SocialGO in excess of £2 million.
Terms of the Acquisition
The consideration for GOWIT is being satisfied by the issue of 34,999,999 new ordinary shares of 1 penny each ("Ordinary Shares") which have an aggregate value of £402,500 at the closing mid market price on 23 December 2009 of 1.15 pence ("Consideration Shares") and the grant of 41,625,000 warrants to subscribe for Ordinary Shares, exercisable at a price of 1.25 pence per share ("Vendor Warrants").
11,666,667 of the Consideration Shares will be allotted and issued to the Vendors on completion ("Initial Consideration Shares"). The balance 23,333,332 Consideration Shares will be allotted and issued in four equal tranches on the first four anniversaries of completion ("Deferred Consideration Shares"). In certain circumstances, the Company will be able to reduce the amount of Deferred Consideration Shares to be allotted and issued to satisfy any claim under the warranties, indemnities or tax covenant contained within the acquisition agreement.
11,666,667 of the Vendor Warrants will be granted and vest immediately upon completion and are exercisable at any time during the 5-year period immediately following their grant ("Initial Warrants"). The balance 29,958,333 Vendor Warrants, which are otherwise granted on the same terms as the Initial Warrants, will not vest or become exercisable until the first anniversary of completion ("Deferred Warrants").
In the event of a change of control of the Company or a voluntary winding-up, allotment and issue of the Deferred Consideration Shares, and vesting of the Deferred Warrants, will be accelerated.
The Acquisition is conditional, inter alia, on the passing of the resolutions ("Resolutions") to be proposed at a general meeting of the Company to be held on 11 January 2010 ("the General Meeting") and admission of the Initial Consideration Shares to trading on AIM, which is expected to occur on 12 January 2010.
Details of the Subscription
Bentworth Holdings Limited, which trades as Veddis Ventures ("Veddis Ventures") has conditionally agreed to subscribe for 40,000,000 new Ordinary Shares at a price of 1.25 pence per share ("the Subscription Shares"). The Subscription is conditional, inter alia, on the passing of the Resolutions and admission of the Subscription Shares to trading on AIM. The net proceeds of the Subscription will provide additional working capital for the Company as it moves forward with its sales and marketing initiatives, particularly in the United States, where the product has now been launched.
The terms of the Subscription Agreement provide that, for so long as it holds not less than 4 per cent. of the issued share capital of the Company from time to time, Veddis Ventures shall be entitled to appoint a non-executive director to the board of Bright Things, provided such person is first approved by the Board and the Company's nominated adviser. It is proposed that the first non-executive director to be appointed by Bentworth shall be Mr Vikrant Bhargava.
The Company has also agreed to grant to Veddis Ventures options to subscribe for up to 15,000,000 new Ordinary Shares, vesting as to 250,000 shares per month from admission of the Subscription Shares to trading on AIM, exercisable at a price of 1.25 pence per new Ordinary Share which shall become exercisable in respect of 3,000,000 Ordinary Shares per year on the first to fifth anniversaries of grant, and 2,890,873 warrants to subscribe for Ordinary Shares which are to be granted on the same terms as the Deferred Warrants described above.
New Board members and Director Resignation
It is proposed that on completion of the Acquisition, Stephen Hardman and Alexander Halliday, who are directors of GOWIT, will join the Board as joint Managing Directors of the Company.
Stephen Hardman, aged 41, is currently a director of GOWIT and Adinway Property Management Limited. Mr Hardman was previously a director within the last five years of CommonWorld, Seckloe 377 Limited and Seckloe 383 Limited. Mr Hardman resigned as a director of Motor Sport Developments Limited on 9 October 2003 and that company entered into a company voluntary arrangement with creditors on 24 November 2003 which was completed on 8 January 2007. In addition Mr Hardman was a director of MSD Special Vehicle Engineering Limited which was dissolved on 10 March 2007.
Alexander Myles Molyneux Halliday, aged 24, is currently a director of GOWIT and Complete Creative Communications Limited. Mr Halliday was previously a director within the last five years of CommonWorld and was also a director of Creative Communication Limited which was dissolved on 4 March 2009.
As described above, subject to completion of the Subscription, Vikrant Bhargava has agreed to join the Board as a non-executive director.
Mr Bhargava, aged 39, was a co-founder and the Group Marketing Director of PartyGaming Plc, a company listed on the London Stock Exchange. He spearheaded PartyPoker's growth from a start-up site in 2001 to the world's largest poker room with revenues of circa US$ 1 billion in 2006.
Mr Bhargava stepped down from his role at PartyGaming in 2006 and has since been involved with a number of projects as well as seeking interesting opportunities mainly in the media, e-commerce and real estate sectors. He is also focused on building LetzDream, a non-profit, self-sustaining platform to help organisations engaged in social projects scale up by providing access to human and financial capital.
Mr Bhargava is an alumnus of the Indian Institute of Technology, Delhi (1994) and the Indian Institute of Management, Calcutta (1996).
Mr Bhargava is currently a director of Muzicall Limited and within the previous five years was a director of Bentworth Holdings Limited and PartyGaming Plc.
There is no other information that requires disclosure in accordance with paragraph (g) of Schedule 2 of the AIM Rules for Companies
Upon joining the Board, Mr Hardman and Mr Halliday will be granted a total of 13,309,211 EMI Share Options, split as to 6,263,158 options to Mr Hardman and 7,046,053 options to Mr Halliday. In addition, it is proposed that certain other employees of GOWIT, including Mr Ross Crawford, one of the Vendors, will receive a total of 5,065,789 EMI Share Options. The EMI Share Options are exercisable at a price of 4 pence per new Ordinary Share and will vest as to one third on the second anniversary of grant, one third on the third anniversary of grant and one third on the fourth anniversary of grant.
Finally, upon Mr Bhargava joining the Board, Matthew Tims will step down as non-executive director.
Further Information
Bright Things PLC 0845 299 7289
Dominic Wheatley, CEO
Edward Levey, Finance Director
Astaire Securities Plc 020 7448 4400
William Vandyk
www.brightthings.com
www.SocialGO.com