TIDMIMMO
RNS Number : 6582O
Immotion Group PLC
02 February 2023
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SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES,
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018), AS AMED. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT
OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT
CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
2 February 2023
Immotion Group plc
("Immotion", the "Company" or the "Group")
Proposed disposal of the Location Based Entertainment business,
completion of the sale of Uvisan Limited and Notice of General
Meeting
Immotion, the UK-based immersive entertainment group, is pleased
to announce it has entered into a conditional sale and purchase
agreement, for the sale of its Location Based Entertainment
business ("LBE") (collectively; Immotion Studios Limited ("ISL"),
Immotion VR Limited ("IVL") and C.2K Entertainment Inc. ("C.2K)),
to LBE BidCo, Inc. for an enterprise value of $25,211,739 on a cash
free/debt free basis (the "Proposed Transaction").
In addition, the Company is pleased to announce that it has
completed the disposal of Uvisan Limited ("Uvisan") for cash
consideration of GBP100,000.
Highlights
-- Sale of the LBE business agreed, subject to shareholder
approval, for an enterprise value of $25,211,739
-- Sale of Uvisan for a total cash consideration of GBP100,000.
-- Retention of the Home-Based Entertainment business conducted
by Let's Explore Media Limited ("HBE") following encouraging retail
and TV shopping demand.
-- Intended return of the majority of the LBE sale proceeds to
Shareholders ( up to circa GBP13.5m, equating to approximately 3p
per share), retaining circa GBP6.5m within the Company for future
opportunities.
-- Intention to build on the Board's expertise using HBE as an
initial platform to create a high growth trading group through
strategic acquisitions.
-- Proposed change of name to Let's Explore Group plc.
-- Following the completion of the disposals, Rod Findley will
remain with the LBE business and step down as a director of the
Company.
Further details of the Proposed Transaction are set out
below.
Whilst the Board believes that considerable growth opportunities
are available to the LBE business, it is of the view that as a
result of the current and continuing challenges presented by the
macroeconomic environment, not least the cost-of-living crisis and
inflationary pressures in the US and UK, the trading environment
could become much more challenging. In addition, to accelerate
growth of the LBE business further capital may be required. The
Board is doubtful that debt finance could be secured on acceptable
terms and it is unwilling to seek to raise further equity capital
at the Company's current valuation. Accordingly, and in order to
minimise risk for Shareholders and provide a significant liquidity
event in highly uncertain markets, the Board has decided to pursue
the Proposed Transaction.
Following completion of the Proposed Transaction, the Board
intends to return the majority of the cash to Immotion
Shareholders, retaining circa GBP6.5m within the Group, most of
which is intended to be used to fund acquisitions. The Group will
retain the Home Based Entertainment ("HBE") business, which it
intends to grow, whilst creating a dynamic trading group through
strategic acquisitions.
The Immotion Board will seek businesses which have proven
products and associated demand but lack capital to grow. The Board
believes that its experience in business acquisition and
development in general and its expertise in digital and media
marketing, as well as the Company's ability to provide cash
investment for growth should leave the Company well positioned to
pursue new opportunities. The Company has already identified one
possible target company which it intends to further explore
following completion of the Proposed Transaction.
The Board believes that the HBE business has clear potential and
since the Interim Results, HBE has developed, and honed its
business model to have a greater B2B focus. Over the last six
months it has undertaken a number of successful initiatives via its
distribution partner, Wicked Vision. These include a number of
trials with QVC, a major global shopping channel where circa GBP1m
of the Vodiac product, at retail value, were sold in a small number
of on-air TV demonstrations. It has also launched Let's Explore
Oceans and Vodiac into the retail sector, securing a number of
trial retailer partners, including Amazon, Selfridges, Hamleys,
Dixons, FAO Schwarz, and Fraser Group, to name but a few.
The Company will today post a Circular to Shareholders regarding
the Proposed Transaction, which sets out a Notice of General
Meeting, and a Form of Proxy for the proposed resolutions. These
documents will also be available on the Company's website.
Commenting, Martin Higginson, CEO of Immotion , said:
"As I'm sure shareholders will understand this transaction has
taken time to conclude, and as a consequence we have been unable to
update the market for a number of weeks. Given the current economic
climate we believe this is a good deal for all shareholders,
allowing us to not only return cash per share in excess of today's
share price, but to go forward with renewed energy, and cash in the
plc vehicle. Furthermore, with access to capital, this proposed
sale will allow the business we started, along with team we
created, to grow faster. The journey has had a few bumps along the
way, not least the Covid Pandemic.
"The hardest part of starting any business is the journey
through to profitability. We have, despite the challenges, achieved
this, and now hand over a profitable business for the next stage in
its journey. With access to capital, this proposed sale, will allow
the business we started, along with team we created, to grow
faster. It has been my pleasure to have worked with such a talented
team, and I wish them and the new owners well."
"I am genuinely excited about the next stage in the Company's
journey, we have, I believe, got the opportunity to build a highly
dynamic trading business, and with a few opportunities already on
the horizon, I am looking forward to what the future holds."
Enquiries:
For further information please visit www.immotion.co.uk , or contact:
Immotion Group plc Martin Higginson investors@immotion.co.uk
David Marks
Cenkos Securities Adrian Hadden Tel + 44 (0) 207 7397 8900
plc Camilla Hume
(Nomad and Sole Broker) Charlie Combe
Background to the Transaction
Immotion was formed in 2017 by Martin Higginson and David Marks
for the purpose of delivering immersive entertainment via virtual
reality technology and related content and was listed on the AIM
market on 12 July 2018.
The Company is formed of three divisions: Location Based
Entertainment, Home Based Entertainment and Uvisan with the latter
two divisions being formed at or around the time of the COVID-19
pandemic, when the LBE business was heavily impacted by COVID-19
restrictions. Having stated its intention to dispose of Uvisan and
seek investment for HBE, the Group's continuing operations for 2022
solely comprise the LBE business.
Whilst the Group has grown strongly since IPO, it was, like many
businesses in the leisure sector, negatively impacted by the
COVID-19 pandemic, and its growth and finances impacted severely .
Despite the LBE business growing strongly this has not been
reflected in the Company's share price.
LBE
The LBE business ended the year to 31 December 2022 slightly
ahead of the Board's expectations of 500 installed headsets at
512.
The first three zoo installations featuring the new 'Gorilla
Trek' offering were installed in Q3, with Dallas Zoo taking the
first new modular solution in the final quarter.
The Company has also signed a new 3-year framework agreement
(running through to 31 December 2025) with Merlin, covering the 26
Merlin sites at which the LBE business has already installed or
agreed to install a Virtual Reality (VR) attraction.
On the basis that LBE had remained the sole continuing operation
(excluding the performance of HBE and Uvisan), the Group would have
expected (subject to audit) to report revenue of circa GBP10.3m and
EBITDA of circa GBP1.4m (net of central costs) for the year to 31
December 2022.
Whilst the Board believes that considerable growth opportunities
are available to the LBE business, it is of the view that as a
result of the current and continuing challenges presented by the
macroeconomic environment, not least the cost-of-living crisis and
inflationary pressures in the USA and UK, the trading environment
could become far more challenging. In addition, to accelerate
growth of the LBE business further capital may be required. The
Board is doubtful that debt finance could be secured on acceptable
terms and it is unwilling to seek to raise further equity capital
at the Company's current valuation. Accordingly, and in order to
minimise risk for Shareholders and provide a significant liquidity
event in highly uncertain markets, the Board has decided to pursue
the Disposals.
The Disposals value the LBE business at $25,211,739
(approximately GBP20.5m) on an enterprise value basis, ignoring any
value attributed to the HBE business, or approximately 4.9p per
existing Ordinary Share in the Company.
HBE and Uvisan
In the Company's full year results to 31 December 2021, the
Group informed Shareholders that it intended to spin out the HBE
and Uvisan businesses. Accordingly, and for the purposes of the
Interim Results, Uvisan and HBE were treated as discontinued
operations.
At the time of the Interim Results, the Board updated
Shareholders that an in principle agreement (subject to contract)
had been reached to sell Uvisan for an estimated cash consideration
of GBP100k and that an in principle agreement had been reached for
a GBP250k injection of capital into the HBE business by a third
party in return for 51% ownership of that business).
Following the publication of the Interim Results, the
negotiation concerning the Disposals has presented an opportunity
for the Company to realise meaningful cash proceeds, enabling the
Board to review its strategic options, particularly in respect of
HBE. Based on the levels of product sales, the Board has always
considered that HBE has significant potential and, since the
Interim Results, HBE has developed and honed its business model
further to have a greater B2B focus, undertaking a number of
successful trials via its distribution partner, Wicked Vision, with
QVC, a major global shopping channel. It has also seen success in
getting its products, namely Let's Explore Oceans and Vodiac
stocked by a number of premium retailers, including Amazon,
Selfridges, Hamleys, Dixons and Fraser Group.
HBE has two key products. "Let's Explore Oceans" is an
educational VR pack that includes a smartphone-powered VR headset,
holographic cube, and hardback book. Users have access to a number
of oceanographic VR experiences as well as a selection of augmented
reality experiences through the holographic cube.
The second product, Vodiac, is an affordable smartphone-powered
VR headset and companion app which provides the user with 75
different virtual reality experiences to try across seven channels:
Adrenaline, Explore, Wonders, Documentaries, Family, Relaxation and
Thrills.
HBE's simplified business model has allowed it to reduce direct
overheads and the board believes that the focus on B2B sales lowers
the risk profile of the business and gives confidence in making the
necessary stock investment to grow the business.
In the period following the Interim Results, QVC undertook a
small trial in the UK selling some 3,000 Vodiac units in a single
demonstration. The success of this led to a test in the USA, where
4,000 units were sold in a matter of hours, plus a 'Today's Special
Value' promotion on QVC UK, where 23,000 units, some GBP800k of
sales, were sold in a 24 hour period. Sales of the Let's Explore
Oceans packs have been buoyant through both Amazon, and direct to
consumers with this line selling out in Q4 2022.
Talks with our distribution partner are already underway about
significantly larger orders for 2023 and beyond. Accordingly, the
Board is of the view that following Completion and with the
necessary financial resources to invest in the business, HBE has
significant opportunities available to it and as such, conditional
upon Completion, it is in the best interests of Shareholders as a
whole to retain the HBE in its entirety.
It has therefore been decided, in consultation with the investor
(a company in which Martin Higginson, and his family have a
minority ownership interest), to alter the terms of the above
mentioned investment of capital to become a loan. The loan capital
has allowed the HBE business to purchase the Vodiac stock sold in
Q4 2022, in the process confirming to management that the HBE
business is worth retaining.
Related Party Transaction
Uvisan, which is considered de minimis and does not fit with the
company's future objectives, has now been sold for consideration of
GBP100,000 to a group of investors (including Uvisan management)
that includes family members of David Marks. The participation in
this transaction by David Marks' family is considered to result in
a related party transaction under AIM Rule 13 of the AIM Rules for
Companies due to David Marks being a director of the Company. The
Directors of the Company independent of Mr Marks consider, having
consulted with Cenkos Securities PLC, the Company's Nominated
Adviser, that the terms of the transaction are fair and reasonable
insofar as the Company's Shareholders are concerned.
Use of proceeds
Following Completion, the Group expects to have approximately
GBP20m of cash net of transaction-related fees and inclusive of the
Loan Notes which are payable on the 12-month anniversary of
Completion (subject to exchange rate fluctuations, completion and
other contractual adjustments).
Subject to the above and following consultation with certain of
its significant Shareholders, it is the Directors' intention to
return circa GBP13.5m of the net proceeds of the Disposals to
Shareholders (equating to approximately 3p per share), subject to
definitive legal and tax advice being sought, with the Board
intending to retain approximately GBP6.5m of cash within the
Company. Shareholders already consulted by the Board, are
supportive of the Company retaining a proportion of the funds
raised from the Proposed Transaction to invest in other
opportunities.
The Board believes that there are considerable opportunities to
use its skills to not only grow the HBE business, but to create a
high growth trading group through strategic acquisitions. It
believes the current landscape is 'capital constrained' and that
there are established trading businesses that have proven their
business model, but lack growth capital. The management's depth of
knowledge both in terms of digital and media marketing, along with
financial investment and restructuring, and the ability to perform
at speed, makes it well placed to deliver opportunities to deliver
enhanced shareholder value. One such acquisition has already been
identified which the Board will, once the Proposed Transaction is
complete, consider proceeding with.
As soon as practicable post Completion, a further circular will
be sent to Shareholders setting out the procedure and mechanism for
returning the majority of the cash proceeds to Shareholders and
requesting the necessary Shareholder authorities.
Summary of the SPA
The Company entered into a conditional sale and purchase
agreement with the Buyer on 1 February 2023.
Pursuant to the SPA, the Company is proposing to sell the
entirety of the common stock of C.2K and the entire issued share
capital of ISL and LEG is proposing to sell the entire issued share
capital of IVL, to the Buyer. The enterprise value payable for the
Disposals is $25,211,739, subject to customary final adjustments,
to be satisfied by the payment of $23,961,739 in cash and the issue
of the Loan Notes to the Company in respect of the common stock and
shares of C.2K and ISL, respectively and $1,250,000 paid to LEG in
respect of shares of IVL (subject to any final working capital,
cash and indebtedness adjustments). Of the $23,961,739 cash to be
received on Completion (subject to any final working capital, cash
and indebtedness adjustments), $5.5m is being paid to the Company
to repay the C.2K Inter-Company Balance. It is the Board's view is
that any final working capital, cash and indebtedness adjustments
will not be material in the context of the Proposed transaction as
a whole.
The principal terms of the SPA are as follows:
1. Conditions - Completion of the SPA is conditional, inter
alia, upon certain conditions ("Conditions"): (a) the passing of
Resolutions 1 and 2, at the General Meeting; (b) the Restructuring
having completed; (c) the title and capacity warranties having not
been breached and there being no material breach of the general and
tax warranties; (d) the Company and LEG having complied with
various ordinary course business undertakings during the period
between exchange and completion in respect of the LBE Companies (as
further described in 4 below); (e) there being no changes in law or
any litigation that would prevent the Disposals; and (f) there
being no event of material adverse effect.
2. Completion of the SPA - Completion must occur by the Long
Stop Date for the fulfilment of the Conditions or such other time
as may be agreed between the Company and the Buyer.
3. Automatic termination of SPA - The SPA automatically
terminates if any of the Conditions have not been satisfied or
waived by the Long Stop Date.
4. Termination by the Buyer - The Buyer may terminate the SPA at
any time prior to Completion if: (a) there is a material breach of
the SPA including the warranties; and (b) there has been a material
adverse effect.
5. Termination by the Sellers - The Sellers have the right to
terminate the SPA in the event that the Completion Payment is not
paid by the Buyer at Completion.
6. Buyer fees - The Company has agreed to pay the Buyer $200,000
(excluding any UK VAT that may be chargeable) in respect of its
incurred professional fees and expenses in certain circumstances
including a breach by the Company of any provisions of the SPA and
if any of the Conditions in the SPA (including Shareholders not
approving the resolutions required to effect the Disposals) have
not been satisfied or waived by the Buyer by the Long Stop Date
above (unless extended with the agreement between the Company and
the Buyer).
7. Sellers fees - The Buyer has agreed to pay the Sellers
$200,000 (excluding any UK VAT that may be chargeable) in respect
of its incurred professional fees and expenses if all the
Conditions are satisfied and the Buyer does not pay the Estimated
Completion Payment to the Sellers.
8. Pre-Completion undertakings - The SPA contains pre-Completion
undertakings relating to conducting the LBE business in the
ordinary course during the period between exchange and Completion
including that prior to Completion the Sellers shall procure that
the LBE Companies shall not: (a) acquire or dispose of any material
assets; (b) change their share capital; (c) amend their
constitutional documents (d) enter into any indebtedness or grant
any security interests; (e) declare any dividends or distributions;
(f) incur any material capital expenditure; (g) commence any
material litigation or dispute and (h) engage or dismiss any key
employees.
9. Consideration - The consideration for the Disposals (the
"Consideration") is $23,961,739 in cash and the issue of the Loan
Notes to the Company in respect of the common stock and shares of
C.2K and ISL, respectively and $1,250,000 paid to LEG in respect of
shares of IVL. Of the $23,916,739 cash to be received on Completion
(subject to any estimated working capital, estimated cash and
estimated indebtedness adjustments) $5.5m is being paid to C.2K to
repay the C.2K Inter-Company Balance.
10. Consideration Adjustment - The Consideration payable for the
sale of C.2K, ISL and IVL is subject to adjustment based on a debt
free/cash free calculation and normalised working capital which
will be based on a completion statement (the "Completion
Statement") produced and agreed after Completion between the
Company and the Buyer or determined by an independent third party
accountant in the event that the Company and the Buyer are unable
to agree the final Completion Statement. Following the calculation
of the final working capital, the final cash and final indebtedness
in the Completion Statement as described in 9, 10 and 11 below, if:
(a) the final consideration is more than the aggregate sum of the
amount of cash paid on Completion and the Loan Notes, the Company
will be entitled to an additional payment equal to such excess; and
(b) the final consideration is less than the aggregate of the sum
of the amount of cash paid on Completion and the Loan Notes, the
Company will have to pay to the Buyer an amount equal to the
shortfall.
11. Working capital adjustment - The Consideration is subject to
potential adjustment based on an estimated amount of working
capital at Completion. Following agreement or determination of the
Completion Statement, in the event that: (a) the final working
capital is greater than the estimated working capital, the amount
of the Consideration due to the Company will be increased; and (b)
the final working capital is less than the estimated working
capital, the amount of the Consideration due to the Company will be
reduced.
12. Cash adjustment - The cash is subject to an adjustment based
on an estimated amount of cash at Completion. Following agreement
or determination of the Completion Statement, in the event that:
(a) the final agreed cash is greater than the estimated cash, the
amount of the Consideration due to the Company will be increased;
and (b) the final agreed cash is less than the estimated cash, the
amount of the Consideration due to the Company will be reduced.
13. Indebtedness adjustment - The indebtedness is subject to
adjustment based on an estimated amount of indebtedness at
Completion. Following agreement or determination of the Completion
Statement, in the event that: (a) the final indebtedness is greater
than the estimated indebtedness, the amount of the Consideration
will be reduced; and (b) the final indebtedness is less than the
estimated indebtedness, the amount of the Consideration will be
increased.
14. Loan Notes repayment - The Loan Notes are due for repayment
on the 12-month anniversary of Completion.
15. Loan Note coupon - The Loan Notes attract an annual coupon
of 6%.
16. Guarantee - The LBE Companies will, by a separate deed,
guarantee the payment of the Loan Notes in the event of default by
the Buyer.
17. Warranties and Indemnities - Subject to the limitations in
paragraph 21 below, the SPA contains standard warranties and
limited indemnities typical for a transaction of this nature.
18. Set-off - The Buyer has the ability to set-off claims made
under the SPA primarily against the Loan Note but if the claims do
not relate to the warranty, tax, or indemnity claims then the
claims may be made against the Company and/or LEG, if they are
above the value of the Loan Note.
19. Tax Covenant - The SPA contains a tax covenant in a usual
form for transactions of this nature.
20. Limitations - The liability of the Sellers under the SPA for
warranty claims (including tax warranty claims), tax covenant
claims and indemnity claims is limited to $1.25m in aggregate. The
time period during which a claim must be made is within 12 months
of Completion. All other claims made under the SPA are limited to
the consideration actually received for the Disposals by the
Company and LEG.
21. Post-Completion restrictions - For a period of 3 years after
Completion, the Sellers cannot:
a. be concerned or interested in a business which competes with the LBE Companies;
b. do anything to harm the goodwill of any of the LBE Companies
which may lead to a customer to stop dealing with any LBE
Company;
c. in competition with the LBE Companies, obtain orders from a customer of the LBE Companies;
d. seek to disrupt or interfere with the supplies to any of the
LBE Companies from a supplier to them who was so in the period of
12 months prior to Completion;
e. use the Immotion name or any other intellectual property
transferred to the Buyer other than certain VR experiences which
will be licensed to HBE for use in the Let's Explore Oceans and
Vodiac products; and
f. solicit senior employees with a view to them being employed
by a third party or to terminate their employment with any of the
LBE Companies;.
subject to certain agreed carve outs.
22. Transitional services agreement - At Completion the Company
and the LBE Companies will enter into a transitional services
agreement whereby the Company will provide certain services to the
Buyer and the LBE Companies for a period of 9 months after
Completion including: (a) accounting and finance support; and (b)
transition and handover support.
Information on the Buyer
LBE BidCo, Inc. was incorporated by William Luby and James
Collis for the purposes of making the acquisition. Ed Wise, former
CEO of Omnicom Health Group, is also a part of the Investor
group.
Mr. Luby and Mr. Collis have worked together for over 30 years
in the private equity business with experience completing in excess
of 100 acquisitions between them with a focus on the lower
middle-market space. They have significant experience in investing
in, and working with, companies in the media, entertainment and
events sectors.
AIM Rule 15
In accordance with AIM Rule 15, the Disposals constitute a
fundamental change of business of the Company. Accordingly,
Shareholders are asked to vote in favour of the Disposals in
Resolution 1. On Completion, the Company will consist of the
trading business, activities and assets of the HBE business
together with the cash proceeds from the Disposals.
Proposed Board Changes
It is intended that Rodney Findley will remain with the LBE
business and therefore conditional on Completion, he will resign as
director of the Company. The Board further intends that Dan
Wortley, current Group Head of Finance will join the Board at the
same time, subject to the necessary NOMAD due diligence process.
David Marks will take on the role of Group Development Director
which will allow Martin and David to focus on developing the HBE
business and pursuing new growth opportunities for the Group.
Change of Name
As part of the Disposals, it has been agreed that the Immotion
name be retained by the LBE business. Accordingly, the Board of
Directors proposes to change the Group's name from Immotion Group
PLC to Let's Explore Group PLC.
A special resolution will therefore be proposed at the General
Meeting to approve the change of name of the Company to Let's
Explore Group PLC conditional on Completion. The name will be
changed as soon as possible after Completion once the relevant
paperwork has been processed by Companies House.
If the Resolution 2 is passed at the General Meeting, the
Company's website and AIM ticker will be updated accordingly. The
Company will update the market in due course of the new
details.
Current Trading and Outlook
Whilst the Company has seen solid growth in the LBE business,
the Directors believe that the Proposed Transaction demonstrates
that its value is not reflected in the current share price, and
they believe that the market is undervaluing the value of this
business.
Whilst the Company is performing in-line with expectations, the
Board believes that the Disposals represent a good price for the
business in its current form and against the current market
backdrop environment and enables the Board to provide Shareholders
with a return of capital per share that is in excess of the current
share price, as well as the opportunity to participate in further
growth opportunities.
Meanwhile, as noted above, the HBE business has enjoyed success
with both its "Let's Explore Oceans" and Vodiac products. As set
out above, both products sold out in Q4 2022. Notwithstanding the
current good trading the HBE business is experiencing, the revenue
for the year ended 31 December 2022 are expected to be below the
revenue for the year to 31 December 2021, this is as a direct
result of the board not investing in further stock throughout 2022.
As stated in previous announcements the decision was taken in early
2022 to utilise cash for the expansion of the core LBE business.
The introduction of the GBP250,000 loan allowed the Company to
purchase limited stock and successfully explore new B2B
opportunities. This has given the Board confidence, following the
sale of the LBE business, to further invest in this business.
The Board believes that given the current economic headwinds,
there is, through strategic acquisitions along with growth in the
HBE, an opportunity to deliver significant shareholder value. With
the cash at its disposal, the Company believes it can deliver solid
growth and an enhanced shareholder position.
Irrevocable undertakings
The Company has received a number of irrevocable undertakings,
representing 130,673,719 shares, or 31.4% of the issued share
capital to vote in favour of the resolutions.
General Meeting
For the reasons explained in this announcement, the Completion
is conditional upon, inter alia, the approval by the Shareholders
of Resolutions 1 and 2 to be proposed at the General Meeting of the
Company.
A notice convening the General Meeting to be held at 10.00 a.m.
on 21 February 2023 is set out at Part 2 of the Circular, at which
the following Resolutions will be proposed:
Resolution 1 - this is an ordinary resolution that the Proposal
Sales on the terms of the SPA be approved. If it is not passed,
Completion under the SPA will not occur.
Resolution 2 - this is a special resolution which changes the
current name of the Company to avoid confusion with ISL and IVL, as
required under the terms of the SPA. If it is not passed,
Completion under the SPA will not occur.
Copies of documents
A copy of the Circular and the Form of Proxy are and will be
available free of charge for inspection on Immotion's website at
www.immotion.co.uk .
Recommendation
The Board considers the Proposed Transaction to be in the best
interests of the Company and its Shareholders as a whole.
Accordingly, the Board recommends that you vote in favour of the
Resolutions, as those Directors who hold Shares intend to do in
respect of their own beneficial Shareholdings.
Forward-Looking Statements
This announcement contains statements about Immotion Group plc
that are or may be deemed to be "forward-looking statements".
All statements, other than statements of historical facts,
included in this announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", or words or terms of similar substance or
the negative thereof, are forward-looking statements.
Forward-looking statements include, without limitation, statements
relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and
future prospects and (ii) business and management strategies and
the expansion and growth of the operations of Immotion Group
plc.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors (including, without
limitation, the form, and timing, of the global recovery following
the COVID-19 pandemic) which may cause the actual results,
performance or achievements of any such person, or industry
results, to be materially different from any results, performance
or achievements expressed or implied by such forward-looking
statements. These forward-looking statements are based on numerous
assumptions regarding the present and future business strategies of
such persons and the environment in which each will operate in the
future. Investors should not place undue reliance on such
forward-looking statements and, save as is required by law or
regulation (including to meet the requirements of the AIM Rules,
the Code, the Prospectus Rules and/or the FSMA), Immotion Group plc
does not undertake any obligation to update publicly or revise any
forward-looking statements (including to reflect any change in
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to Immotion Group plc or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. All forward-looking statements contained in this
announcement are based on information available to the Directors of
Immotion Group plc at the date of this announcement, unless some
other time is specified in relation to them, and the posting or
receipt of this announcement shall not give rise to any implication
that there has been no change in the facts set forth herein since
such date.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"AIM" AIM, a market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange
from time to time
"B2B" Business to business
"Board" or "Directors" the directors of the Company whose names are set out on page 9 of the
Circular
"Broker" Cenkos
"Business Day" any day on which banks are usually open in England and Wales for the
transaction of sterling
business, other than a Saturday, Sunday or public holiday
"Buyer" LBE BidCo, Inc. a company registered in the State of Delaware with
number 7143309 and whose
principal place of business is at 27(th) Floor, 40 Fulton Street, New
York, New York 10038,
United States of America
"C.2K" C.2K Entertainment, Inc., a corporation registered under the laws of
the State of California
and whose principal place of business is at 1067 Gayley Avenue, Los
Angeles, CA 90024, United
States of America
"C.2K Inter-Company Balance" the sum of $5.5m owed by C.2K to the Company as at 1 February 2023.
"Cenkos" Cenkos Securities plc, nominated advisor and broker to the Company
"certificated" or "in certificated form" a share or other security not held in uncertificated form (that is,
not in CREST)
"Change of Name" the proposed change of name of the Company to Let's Explore Group plc
"Code" the City Code on Takeovers and Mergers
"Company" or "Immotion Group" Immotion Group plc, a company incorporated in England and Wales with
registered number 10964782
"Completion" completion of the SPA in accordance with its terms
"Completion Date" the date of Completion
"Conditions" conditions of the SPA in accordance with its terms
"COVID-19" SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2),
coronavirus disease or COVID-19,
including any evolutions or mutations of the COVID-19 disease or any
further epidemics or
pandemics arising therefrom
"CREST" a relevant system (as defined in the CREST Regulations) in respect of
which Euroclear is the
Operator (as defined in the CREST Regulations)
"CREST Regulations" the Uncertified Securities Regulations 2001 (SI 2001/3755) as amended
from time to time
"Directors" the directors of the Company whose names appear on page [10] of
the Circular and "Director" shall mean any one of them
"Disposals" the disposals of the entire issued share capitals of ISL and IVL and
the disposal of the entirety
of the common stock of C.2K to the Buyer pursuant to the terms of the
SPA
"Estimated Completion Payment" the amount of $23,961,739
"Euroclear" Euroclear UK & Ireland Limited, the operator of CREST
"Financial Conduct Authority" or "FCA" the Financial Conduct Authority (and its predecessor, the Financial
Services Authority) in
its capacity as the competent authority for the purposes of Part VI of
FSMA
"Form of Proxy" the enclosed form of proxy for use by Shareholders in connection with
the General Meeting
"FSMA" the Financial Services and Markets Act 2000 (as amended)
"General Meeting" the general meeting of the Company to be held at 10.00 a.m. on 21
February 2023 (or any reconvened
meeting following any adjournment of the general meeting) at St. James
Room 1, 116 Pall Mall,
St. James's, London, SW1Y 5ED, notice of which is set out at the end
of the Circular
"Group" or "Group Company" the Company and/or any or all of its existing subsidiaries and
subsidiary undertakings
"HBE" the Group's home-based entertainment business conducted through LEM
"IPO" the admission of the entire issued share capital of the Company to
trading on AIM on 12 July
2018
"ISL" Immotion Studios Limited, a private limited company registered under
the laws of England and
Wales with company number 03958635, and whose registered office is at
Kingswood House South
Road, Kingswood, Bristol, England, BS15 8JF
"IVL" Immotion VR Limited, a private limited company registered under the
laws of England and Wales
with company number 10697809, and whose registered office is at
Kingswood House South Road,
Kingswood, Bristol, England, BS15 8JF
"Interim Results" the unaudited interim consolidated financial statements of the Group
for the six months period
ended 30 June 2022
"LEG" Let's Explore Group Limited, a private limited company registered
under the laws of England
and Wales with company number 11054174, and whose registered office is
at Kingswood House
South Road, Kingswood, Bristol, England, BS15 8JF, formerly known as
Immotion Limited
"LEM" Let's Explore Media Limited a private limited company incorporated in
England and Wales with
registered number 12798774 whose registered office is at Kingswood
House South Road, Kingswood,
Bristol, England, BS15 8JF
"LBE" the Group's location-based entertainment business (conducted through
ISL, IVL and C.2K)
"LBE Companies" ISL, IVL and C.2K
"Loan Notes" the $1,250,000 unsecured six percent (6%) fixed rated guaranteed loan
notes issued by the
Buyer pursuant to the SPA
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 5.00 p.m. on 6 March 2023
"Market Abuse Regulation" the Market Abuse Regulation (2014/596/EU) (incorporating the technical
standards, delegated
regulations and guidance notes, published by the European Commission,
London Stock Exchange,
the FCA and the European Securities and Markets Authority) as retained
in the UK pursuant
to section 3 of the European Union (Withdrawal) Act 2018
"Notice" or "Notice of General Meeting" the notice of the General Meeting set out at the end of the Circular
"Ordinary Shares" ordinary shares of 0.040108663 penny each in the share capital of the
Company
"Proposals" the Proposed Transaction and the subsequent plans as set out in the
Circular
"Proposed Transaction" the proposed Disposals
"Registrar " Neville Registrars Limited, registrars to the Company
"Regulatory Information Service" one of the regulatory information services authorised by the FCA
acting in its capacity as
the UK listing authority to receive, process and disseminate
regulatory information
"Resolutions" the resolutions to be proposed at the General Meeting, as set out in
the Notice of General
Meeting
"Restructuring" the restructuring of the Group prior to Completion
"Sellers" the Company and LEG
"Share Option Scheme the Company's share option scheme adopted by Shareholders on 9 July
2018
"Shareholders" holders of Ordinary Shares
"SPA" the conditional sale and purchase agreement for the disposals of the
entire issued share capitals
of ISL and IVL and the disposal of the entirety of the common stock of
C.2K to the Buyer dated
1 February 2023
"Uncertificated" or "In Uncertificated Form" recorded on the register of members of the Company as being held in
uncertificated form in
CREST and title to which, by virtue of the CREST Regulations, may be
transferred by means
of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority" the FCA acting in its capacity as the competent authority for the
purposes of Part VI of FSMA
"USA" the United States of America
"Uvisan" Uvisan Limited a private limited company incorporated in England and
Wales with registered
number 13625972 whose registered office is at Kingswood House South
Road, Kingswood, Bristol,
England, BS15 8JF
"VR" Virtual reality
"GBP", "pounds sterling", "penny" or "pence" UK pounds sterling, the lawful currency of the United Kingdom
"$" or "dollars" USA dollars, the lawful currency of the USA
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END
DISEANAFEDSDEFA
(END) Dow Jones Newswires
February 02, 2023 02:02 ET (07:02 GMT)
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