REG - Blackbird PLC - Placing to raise £8 million

BlackbirdAnnouncement

08/12/2021 07:00

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RNS Number : 8955U  Blackbird PLC  08 December 2021

This announcement contains Inside Information for the purposes of Article 7 of
EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018). Upon the publication of this
announcement this Inside Information is now considered to be within the public
domain.

 

8 December 2021

Blackbird plc

(the "Company")

Placing to raise approximately £8.0 million before expenses to address new
market opportunities

 

Blackbird plc (AIM:BIRD, OTCQX: BBRDF), the technology licensor, developer and
seller of the market-leading cloud native video editing platform, Blackbird,
is pleased to announce a placing of 28,571,429 new ordinary shares of 0.8
pence each in the Company (the "Placing Shares") at a price of 28 pence per
share (the "Placing Price") to raise approximately £8.0 million before
expenses (the "Placing").  Allenby Capital Limited ("Allenby Capital") is
acting as sole broker in connection with the Placing.

The Placing has been conducted as a private placement under the Company's
existing allotment and pre-emption disapplication authorities and
participation has not been made available to members of the public.

Blackbird plc CEO, Ian McDonough, said:

"With our core business in rude health we are incredibly excited to announce a
placing to raise £8.0 million to enter new markets with our "Powered by
Blackbird" intellectual property.

"Recent contract wins for the Company include Univision, Eurovision Sport and
a further expansion with TownNews to 80 regional US stations. "Powered by
Blackbird" already has its first customer in our current sector focus of
professional Media and Entertainment. The Company has also recently been
awarded "Best Tech Company 2021" by the SportsPro OTT awards.

"While our reputation builds in the professional Media and Entertainment
vertical, our technology has advanced through API development and the first
"Powered by Blackbird" licence deal has shown our applicability to companies
across multiple video markets. The creator economy, enterprise video and
content distribution markets are of huge scale and have attractive growth
rates offering a massive opportunity built around our existing intellectual
property."

 

Transaction highlights

·    The Placing Shares have been placed with existing and new investors.

·    Certain members of the Company's board (the "Board") and associated
family members are subscribing for an aggregate of approximately £0.41
million in the Placing, of which £0.38 million will be subscribed by Ian
McDonough, Chief Executive Officer of the Company, and members of his family.

·    The Placing Shares will represent approximately 7.8 per cent. of the
issued share capital of the Company, as enlarged by the issue of the Placing
Shares.

·    The Company plans to develop its existing "Powered by Blackbird"
("PBB") intellectual property to take advantage of the opportunities within
the creator economy, enterprise video and content distribution markets (the
"New Markets").

·    The estimated net proceeds of the Placing, which will be £7.6
million, will be used by the Company to:

o  develop the Company's technology offering in the New Markets;

o  grow its software engineering, product and business development teams;

o  expand the Company's patent portfolio; and

o  conduct appropriate research, prototyping and market testing of new
technology developments.

 

Background to and reasons for the Placing

The Company is seeking funds to help utilise its PBB intellectual property and
develop further technology to take advantage of the opportunities within the
New Markets. These opportunities are evidenced by the creator economy, which
in May 2021 had an estimated size of $104.2 billion (source: Creator Earnings:
Benchmark Report 2021 - Influencer Marketing Hub). The Board believes that the
New Markets suffer from inefficient video creation, cumbersome video
distribution and low monetisation. These are all issues which the Board
believes, through further development of the PBB intellectual property, the
Company can solve. The Company's recent PBB licence deal is testament to the
capabilities of the technology.

 

Details of the Placing

A total of 28,571,429 Placing Shares are to be issued at a price of 28 pence
per Placing Share. The Placing has been conducted utilising the Company's
existing share authorities to issue shares for cash on a non-pre-emptive
basis. Allenby Capital acted as the Company's sole broker in connection with
the Placing. The Placing is conditional, inter alia, on admission of the
Placing Shares to trading on AIM ("Admission") becoming effective.

The Company has entered into a Placing Agreement with Allenby Capital under
which Allenby Capital has agreed to use its reasonable endeavours to procure
subscribers for the Placing Shares at the Placing Price. The Placing has not
been underwritten.

The Placing Agreement contains, inter alia, customary undertakings and
warranties given by the Company in favour of Allenby Capital as to the
accuracy of information contained in this document and other matters relating
to the Company. Allenby Capital may terminate the Placing Agreement in
specified circumstances prior to Admission, including, inter alia, for
material breach of the Placing Agreement or any other warranties contained in
it and in the event of certain force majeure events occurring.

The Placing Shares will represent approximately 7.8 per cent. of the Company's
enlarged share capital. The Placing Price represents a discount of
approximately 8.2 per cent. to the closing mid-market price on AIM of 30.5
pence per existing ordinary share of 0.8 pence each in the Company ("Ordinary
Shares") on 7 December 2021.

The Placing Shares will be credited as fully paid and will rank equally in all
respects with the Company's existing Ordinary Shares.

The Placing Shares have been placed with certain existing and new investors.
The Directors value the Company's retail shareholders, but due to the size of
the Placing, the small discount to the prevailing bid price of an Ordinary
Share and the cost of undertaking a retail offer, the Board determined that it
was not in the Company's interest to make the Placing available to all
existing shareholders. However, this will be kept under review should the
Company seek to raise further funds in the future.

It is expected that CREST accounts will be credited on the relevant day of
Admission and that share certificates (where applicable) will be dispatched
within 10 working days of Admission.

 

Admission to trading and total voting rights

Application has been made to the London Stock Exchange plc for the Placing
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective and that dealings in the Placing Shares on AIM will commence
at 8:00 a.m. on or around 13 December 2021.

On Admission, the Company's issued ordinary share capital will consist of
367,565,521 Ordinary Shares, with one vote per share. The Company does not
hold any Ordinary Shares in treasury. Therefore, on Admission, the total
number of Ordinary Shares and voting rights in the Company will be
367,565,521. With effect from Admission, this figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

 

Related Party Transaction

Premier Miton Group plc ("Premier Miton"), which currently owns 60,670,559
Ordinary Shares representing 17.9 per cent. of the Company's issued share
capital at the date of this announcement, has agreed to subscribe for
3,428,571 Placing Shares as part of the Placing. As a substantial shareholder
of the Company, Premier Miton is to be treated as a 'related party' in
accordance with the AIM Rules for Companies (the "AIM Rules") and its
participation is a related party transaction pursuant to Rule 13 of the AIM
Rules. The Directors of the Company, having consulted with Allenby Capital,
consider the terms of Premier Miton's participation in the Placing to be fair
and reasonable insofar as shareholders are concerned.

 

Directors' Participation

Some of the Directors of the Company have agreed to subscribe for 465,714
Placing Shares. In addition, members of Ian McDonough's family have agreed to
subscribe for 1,000,000 Placing Shares. Set out below are details of the
Directors and related family interests in the share capital of the Company as
at the date of this announcement and following Admission:

 

                   At the date of this announcement                                         Following Admission
                   No. of existing Ordinary Shares  Percentage of existing Ordinary Shares  No. of Ordinary Shares  Percentage of enlarged share capital

 McDonough family  26,179,016                       7.74%                                   27,536,159              7.49%
 Stephen White     363,164                          0.11%                                   416,735                 0.11%
 Stephen Streater  62,660,000                       18.48%                                  62,660,000              17.05%
 Andrew Bentley    295,154                          0.09%                                   350,154                 0.10%
 David Main        1,162,143                        0.34%                                   1,162,143               0.32%
 Dawn Airey        71,429                           0.02%                                   71,429                  0.02%
 John Honeycutt    50,460                           0.01%                                   50,460                  0.01%

 

 

Enquiries:

 Blackbird plc
 Ian McDonough, Chief Executive Officer
 Steve White, Chief Operating and Finance Officer

 Tel: +44 (0)20 8879 7245

 Allenby Capital Limited (Nominated Adviser and Broker)

 Nick Naylor/Piers Shimwell (Corporate Finance)

 Amrit Nahal (Sales and Corporate Broking)

 Tel: +44 (0)20 3328 5656

 

About Blackbird plc

Blackbird plc operates in the fast-growing SaaS and cloud video market. It has
created Blackbird®, a market-leading suite of cloud native computing
applications for video, all underpinned by its lightning-fast codec. Blackbird
plc's patented technology allows for frame accurate navigation, playback,
viewing and editing in the cloud. Blackbird® enables multiple applications,
which are used by rights holders, broadcasters, sports and news video
specialists, esports, live events and content owners, post-production houses,
other mass market digital video channels and corporations.

Since it is cloud native, Blackbird® removes the need for costly, high end
workstations and can be used from almost anywhere on almost any device. It
also allows full visibility on multi-location digital content, improves time
to market for live content such as video clips and highlights for digital
distribution, and ultimately results in much more effective monetisation.

Blackbird plc is a licensor of its core video technology under its "Powered by
Blackbird" licensing model, enabling video companies to accelerate their path
to true cloud business models. Licensees benefit from power and carbon
reductions, cost and time savings, less hardware and bandwidth requirements
and easy scalability.

www.blackbird.vide (http://www.blackbird.video/) o

www.linkedin.com/company/blackbird-cloud
(http://www.linkedin.com/company/blackbird-cloud)

www.twitter.com/blackbirdcloud (http://www.twitter.com/blackbirdcloud)

www.facebook.com/blackbirdplc (http://www.facebook.com/blackbirdplc)

www.youtube.com/c/Blackbirdcloud (https://www.youtube.com/c/Blackbirdcloud)

 

Notice to Distributors

 

Solely for the purposes of the product governance requirement contained in
Chapter 3 of the FCA Product Intervention and Product Governance Sourcebook
(together, the "UK Product Governance Requirements"), and disclaiming all and
any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the UK Product Governance Requirements)
may otherwise have with respect thereto, the Placing Shares have been subject
to a product approval process, which has determined that the Placing Shares
are: (i) compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and eligible
counterparties, as defined under the FCA Handbook Conduct of Business
Sourcebook, and (ii) eligible for distribution through all permitted
distribution channels (the "Target Market Assessment").

 

Notwithstanding the Target Market Assessment, distributors should note that:
the price of the Placing Shares may decline and investors could lose all or
part of their investment; the Placing Shares offer no guaranteed income and no
capital protection; and an investment in the Placing Shares is compatible only
with investors who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses that may
result therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling restrictions in
relation to the Placing Shares. Furthermore, it is noted that, notwithstanding
the Target Market Assessment, Allenby Capital Limited will only procure
investors who meet the criteria of professional clients and eligible
counterparties. For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness for the
purposes of the FCA Handbook Conduct of Business Sourcebook COBS 9A and 10A
respectively; or (b) a recommendation to any investor or group of investors to
invest in, or purchase, or take any other action whatsoever with respect to
the Placing Shares.

 

Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.

 

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