24 Nov 2009 07:00
imJack Plc
("imJack" or the "Company")
Trading Update
and Working Capital Requirement
imJack plc (AIM: IMJ), the digital networking and media business, is today providing an update on the Company's business model, new marketing brand and working capital position.
Market Opportunity
The use of social networks, such as Facebook, by school children is high and continues to rise. The majority of social networks used by children are not secure and therefore not suitable for use in an educational environment. In light of this broader market opportunity, the Company has worked closely with schools and the SSAT over the past year and as a result has developed a recognised and accredited secure social network platform for schools, previously referred to as the imJack technology platform.
The Company's newly appointed editorial, technological and creative team has recently rebranded this educational platform "Kwercus".
New Business Model
The change in the Company's business strategy, which was first announced on 28 August 2009 has now been completed. This is a shift from supplying the software free of charge and seeking to generate revenue from advertising sales. The revised business strategy seeks to charge for the Company's technology platform and generate recurring revenues.
Four key streams of recurring revenues have been identified:
Base platform subscription revenues.
The sale of additional applications available as enhancements to the base platform, such as parental engagement tools and content bundles.
Advertising, sponsorship and e-commerce revenues.
Consultancy and support services.
This model is being developed to be scalable both on a national level and globally. The Company's initial focus will be on the generation of subscription revenues through the roll out of the Kwercus platform into a significant number of primary and secondary schools. A strategic marketing campaign is already underway and more events are planned to gain revenues from schools signing up to the Kwercus platform.
Trading Update
Further to the announcement made on 7 September 2009, in respect of the consultancy agreement with Professor Tanya Byron, Anthony Lilley and Samantha Richards (together "TAS") (the "Consultancy Agreement") and the subsequent announcement on 7 October 2009 in respect of the appointment of Anthony Lilley as Acting Chief Executive of the Company a number of key operational and marketing activities have now been initiated and are summarised below:
A national, "Kwercus" branded survey into the use of social networking by parents and children was completed in November 2009.
Under the leadership of Professor Byron and other prominent educationalists, the Company has sought to create a national public debate on the potential of secure social networking in schools.
The rebranding of the product and launching of www.kwercus.com, which marked the beginning of the Company's national marketing and sales campaign took place earlier this month.
The formal nationwide launch of Kwercus has been planned for January 2010
In addition, the Company is pleased to announce that it is in advanced discussions with a major national organisation for the national roll out of the Kwercus product, albeit the nature of the contract, if ultimately received, is yet to be finalised.
Anthony Lilley, Acting Chief Executive of imJack plc, said: "We have identified a national need for Kwercus in schools to provide safety and security, as well as significant educational advantages, to children using the internet. The Board of imJack is convinced that the market opportunity for Kwercus is immense, not only in the UK but globally."
Under the terms of the Consultancy agreement a bonus payment would fall due to TAS if the imJack platform had been installed in 4,000 schools by 30 November 2009. This bonus was based primarily on the possibility of the potential swine flu pandemic requiring the immediate installation of a universal communication platform in all schools. As a result of the fact this did not occur, this initial target will not be met.
Working Capital
The Company announced on 7 September 2009 that it was "exploring a number of opportunities which would result in further working capital being generated". In the meantime a loan facility has been provided by Jeffrey Morris, a substantial shareholder in the Company the details of which were contained in the Company's RNS announcement dated 19 May 2009 (the "Loan Facility"). The Company has, to date, drawn down £350,000 under the Loan Facility and served notice on Mr Morris of its intention to draw down the balance of £150,000 by 31 December 2009. As the Company has not generated sufficient revenue, it is reliant in the short term on Mr Morris' ability to provide funds under the Loan Facility on a timely basis.
Following the review outlined above, in addition to the funds to be provided under the Loan Facility, the Directors believe that the Company now requires further funds to provide working capital to implement the revised business model, to launch the Kwercus brand and to strengthen the balance sheet. Accordingly, the Directors intend to raise further funds by the end of January 2010.
Should the Company be unsuccessful in raising these funds, this will have a material adverse effect on the Company's financial position and operations. In the absence of a successful fundraise, the Company will seek to explore alternative strategies for raising funds. In the event that such activities are not successful the Company will not be able to continue trading in its current form. There can be no guarantee that such funding will be available.
Further announcements will be made in due course.
For further information, please contact:
| imJack Plc Anthony Lilley, Acting CEO | Tel: 01653 618016 www.imjack.com |
| Strand Hanson Limited (Nomad) James Harris / Paul Cocker | Tel: 020 7409 3494 |
| Daniel Stewart & Company Plc (Broker) Martin Lampshire / Stewart Dickson | Tel: 020 7776 6550 |
| Rawlings Financial PR Limited Catriona Valentine | Tel: 01653 618016 |
IMJ.L (IMJ)