5th Feb 2008 11:54
Clarity Commerce Solutions PLC05 February 2008 CLARITY COMMERCE SOLUTIONS PLC 5 February 2008 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR INPART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA ORANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THERELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR ORPURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OFINFORMATION IN THE CIRCULAR TO SHAREHOLDERS EXPECTED TO BY PUBLISHED BY CLARITYCOMMERCE SOLUTIONS PLC TODAY IN CONNECTION WITH THE PROPOSED OPEN OFFER. CLARITY COMMERCE SOLUTIONS PLC ('CLARITY' OR THE 'COMPANY') Placing and Open Offer of up to 7,117,623 new Ordinary Shares at 25 pence per share and Notice of Extraordinary General Meeting The Company announces today that it proposes to raise up to £1,779,406 (beforeexpenses) by way of a Placing and partially underwritten Open Offer of up to7,117,623 new Ordinary Shares at 25 pence per shares, on the basis of 2 OfferShares for every 7 Existing Ordinary Shares. Highlights • Placing and Open Offer to raise up to £1,779,406 before expenses (£1,625,906 after expenses) • The Open Offer is to be made by way of a Circular to be sent to Qualifying Shareholders who will be given the opportunity to subscribe for Offer Shares pro rata to their existing shareholdings at a price of 25 pence per Offer Share on the following basis: 2 Offer Shares for every 7 Existing Ordinary Shares • The Open Offer is partially underwritten up to a maximum of £1.5 million by Southwind Limited • Net proceeds to be utilised to strengthen the Group's balance sheet and to satisfy the general working capital requirements of the Group • Irrevocable undertakings to vote in favour of the Resolutions have been received from the Directors and certain Shareholders, representing 43.3 per cent. of the Existing Ordinary Shares in issue • The Open Offer will be subject to the passing of the Resolutions to be considered at an Extraordinary General Meeting expected to be held on 28 February 2008 • Application will be made to the London Stock Exchange for the Offer Shares to be admitted to trading on AIM. Dealings are expected to commence in the Offer Shares on 29 February 2008 • The Circular to Shareholders setting out details of the Placing, Open Offer, the Resolutions and a Notice of the Extraordinary General Meeting, accompanied by the Form of Proxy and the Application Form, is expected to be posted to Shareholders today Ken Smith, Clarity's Group Managing Director, said: "Following our return to profitable trading, we are very pleased to be able tomove forward with a solid working capital position. The net proceeds of thePlacing and Open Offer, combined with the Group's improved trading andprospects, provide a firm foundation for the short to medium term future." For further information, please contact Ken Smith, Group Managing Director (Please call Jacquie Mitchell)Clarity Commerce Solutions plc 01932 778001 Fiona KindnessGrant Thornton UK LLP (Nominated Adviser) 020 7728 3414 Ian CallawaySVS Securities plc (Broker) 020 7638 5600 This summary should be read in conjunction with the detailed announcement whichfollows. Paragraph 12 of the full announcement contains the definitions of certain termsused in this summary and the full announcement. This announcement does notconstitute, or form part of, an offer to sell, or the solicitation of an offerto subscribe for or buy, any of the Offer Shares to be issued in connection withthe Placing and Open Offer. The Directors of Clarity have taken all reasonable care to ensure that theinformation contained in this announcement is, to the best of their knowledge,in accordance with the facts and contains no omission likely to affect theimport of such information. Grant Thornton UK LLP, which is authorised and regulated in the UK by theFinancial Services Authority, is acting as Nominated Adviser exclusively to theCompany and no one else in connection with the Open Offer and the admission ofthe Offer Shares to trading on AIM and will not be responsible to anyone otherthan the Company for providing the protection afforded to clients of GrantThornton UK LLP or for providing advice in relation to the Open Offer, theproposed admission to trading on AIM, or any other matters referred to in thisannouncement. The release, publication or distribution of this announcement into certainjurisdictions other than the UK may be restricted by law and therefore personsin such jurisdictions into which this announcement is released, published ordistributed should inform themselves about and observe any such restrictions.Any failure to comply with any such restrictions may constitute a violation ofthe securities laws or regulation of such jurisdictions. A circular to shareholders containing both the Notice of the ExtraordinaryGeneral Meeting and the details relating to the Placing and Open Offer (the'Circular') is expected to be despatched today. The Circular gives furtherdetails of the Placing and Open Offer and contains a Notice of an ExtraordinaryGeneral Meeting to approve certain resolutions necessary to implement thePlacing and Open Offer, expected to be held at 12 noon on 28 February 2008 at 33Hanworth Road, Sunbury on Thames, Middlesex TW16 5DA. This announcement is not for release, publication or distribution, directly orindirectly, in whole or in part, in or into the United States, Australia,Canada, Japan or South Africa and does not constitute, or form part of, an offeror the solicitation of an offer, or inducement, or invitation to subscribe for,buy, underwrite or otherwise acquire, any rights, shares or other securities,nor the solicitation of any vote or approval in any jurisdiction, nor shallthere be any sale, issue or transfer of shares in the Company in anyjurisdiction in contravention of applicable law. Any offer, invitation orinducement to acquire shares in the Company will be made solely by means of theProspectus, as updated by any supplementary prospectuses, and the ApplicationForm and any decision to keep, buy or sell shares in the Company should be madesolely on the basis of the information contained in such document(s). The Offer Shares have not been approved or disapproved by the US Securities andExchange Commission, any State securities commission in the United States or anyother US regulatory authority, nor have any of the foregoing authorities passedupon or endorsed the merits of the offering of the Offer Shares or the accuracyor adequacy of this announcement or the Circular. The securities referred toherein have not been and will not be registered under the US Securities Act andmay not be sold or offered in the United States unless registered under the USSecurities Act or any applicable exemption from such registration. No publicoffering of Offer Shares will be made in the United States, Australia, Canada,Japan or South Africa. This announcement includes statements that are, or may be, 'forward-lookingstatements'. These forward-looking statements can be identified by the use offorward-looking terminology, including the terms 'believes', 'estimates','plans', 'anticipates', 'targets', 'aims', 'continues', 'expects', 'intends','may', 'will', 'would' or 'should' or, in each case, their negative or othervariations or comparable terminology. These forward-looking statements includeall matters that are not historical facts. They appear in a number of placesthroughout this announcement and include statements regarding the Group'sintentions, beliefs or current expectations concerning, among other things, theGroup's results of operations, financial condition, liquidity, prospects, growthstrategies and the markets in which the Group operates. By their nature,forward-looking statements involve risk and uncertainty because they relate tofuture events and circumstances. A number of factors could cause actual resultsand developments to differ materially from those expressed or implied by theforward-looking statements, including, without limitation: market position ofthe Group, earnings, financial position, cash flows, return on capital,anticipated investments and capital expenditures, changing business or other market conditions and general economic conditions. These and other factors couldadversely affect the outcome and financial effects of the events describedherein and the Group. Forward-looking statements contained in this announcementbased on these trends or activities should not be taken as a representation thatsuch trends or activities will continue in the future. CLARITY COMMERCE SOLUTIONS PLC ('CLARITY' OR THE 'COMPANY') Placing and Open Offer of up to 7,117,623 new Ordinary Shares at 25 pence per share and Notice of Extraordinary General Meeting 1. Introduction The Company announces today that it proposes to raise up to £1,779,406 (beforeexpenses) by way of a Placing and partially underwritten Open Offer, thusallowing the Company's existing Shareholders the opportunity to participate inthe fundraising. The Open Offer has been partially underwritten by SouthwindLimited, an investment company wholly owned by a trust settled by Mr. ALRMorton, a shareholder in the Company, which has conditionally agreed tounderwrite up to £1.5 million of the Open Offer. The terms of the Placing, Open Offer and underwriting are described in acircular to Shareholders which is being despatched today. QualifyingShareholders may also subscribe for shares above their basic entitlement underthe Open Offer if they so wish, under an excess application facility. Furtherparticulars of the excess application facility are described in part II of thecircular. The net proceeds of the Placing and Open Offer are expected to be up to£1,625,906 (assuming full take up under the Placing and Open Offer) and willstrengthen the Company's balance sheet, enabling the Group to complete itscurrent business plan, and provide general working capital for the Group. ThePlacing and Open Offer are conditional, inter alia, upon Shareholders passingthe Resolutions set out in the Notice convening the Extraordinary GeneralMeeting, which is within the Circular being despatched today and upon Admission. 2. Details of the Placing and the Open Offer Qualifying Shareholders are invited to apply for Offer Shares under the OpenOffer at a price of 25 pence per Offer Share, payable in full on application andfree of all expenses, pro rata to their existing shareholdings on the basis of: 2 Offer Shares for every 7 Existing Ordinary Shares held at the Open Offer Record Date and so on in proportion for any other numberof Existing Ordinary Shares then held. Entitlements of Qualifying Shareholderswill be rounded down to the nearest whole number of Offer Shares. Fractionalentitlements which would have otherwise arisen will not be issued. The Open Offer is subject to the satisfaction, amongst other matters, of thefollowing conditions on or before 29 February 2008, (or such later date beingnot later than 31 March 2008, as the Company may decide): (i) the passing without amendment of the Resolutions; (ii) the Placing provisions in the Engagement Letter and the UnderwritingAgreement being unconditional in all respects and not having been terminated inaccordance with their terms; and (iii) Admission becoming effective by 8.00 am on 29 February 2008, (or suchlater time or date not being later than 8.00 am on 31 March 2008 as the Companymay decide). The Offer Shares will, when issued and fully paid, rank pari passu in allrespects with the Existing Ordinary Shares, including the right to receive alldividends and other distributions declared, made or paid after the date ofAdmission. Certain Shareholders and Directors have given irrevocable undertakings to takeup in full their respective entitlements under the Open Offer, amounting to273,265 Offer Shares, in aggregate. In addition, Ken Smith has agreed tosubscribe for up to 150,000 new Ordinary Shares, concurrently with the Placingand conditional upon Admission. The Open Offer has been structured so as to allow Qualifying Shareholders tosubscribe for Ordinary Shares at the Open Offer price pro rata to their existingholdings. Qualifying Shareholders may, in addition, make applications in excessof their pro rata initial entitlement. Once subscriptions under the Open Offerentitlements have been satisfied, the Company shall, in its absolute discretion,determine whether to meet any excess applications in full or in part. To theextent that Offer Shares are not subscribed by existing Shareholders, Open Offerentitlements will lapse. The Company's broker, SVS has, pursuant to the Engagement Letter, undertaken touse its reasonable endeavours to place any Offer Shares not subscribed for byQualifying Shareholders with certain other investors. Overseas Shareholders Certain overseas Shareholders may not be permitted to subscribe for Offer Sharespursuant to the Open Offer and should refer to paragraph 6 of the circular. Settlement and dealings Application will be made to the London Stock Exchange for the Offer Shares to beadmitted to trading on AIM. It is expected that such Admission will becomeeffective and that dealings will commence on 29 February 2008. Furtherinformation in respect of settlement and dealings in the Offer Shares is set outin paragraph 7 of Part II of the Circular. The Offer Shares will, when issued, rank pari passu in all respects with theExisting Ordinary Shares, including the right to receive dividends and otherdistributions declared following Admission. 3. Underwriting Agreement The Open Offer has been partially underwritten up to a maximum of £1.5 millionby Southwind, an investment company wholly owned by a trust settled by Mr. ALRMorton, a shareholder in the Company. The obligation on Southwind to subscribefor Offer Shares under the Underwriting is limited to those Offer Shares thatare not placed in the Placing or otherwise subscribed for by existingShareholders. Pursuant to the Underwriting Agreement, the Company has agreed to pay Southwinda cash fee of £45,000 which is equal to 3 per cent. of the total underwritingcommitment of £1.5 million which is payable no later than 5 business daysfollowing Admission. In the event that Admission does not occur no fees will bepayable. 4. Use of proceeds The net proceeds of the Placing and Open Offer are expected to be up to£1,625,906 (assuming full take up under the Placing and Open Offer). Theproceeds will be used to strengthen the Group's balance sheet and to satisfy thegeneral working capital requirements of the Group. As Shareholders may be aware, the Company announced its interim statement forthe six months to 30 September 2007 on 31 December 2007. Over that six monthperiod, the Company reported a loss after tax of £1.5 million and acorresponding net decrease in cash and cash equivalents of almost £1 million.The Group returned to profitable trading in the four month period from Septemberto December 2007 and cost control and reduction is a key focus for newdivisional heads who are accountable for their respective division'sprofitability. Nevertheless, losses in the first half of the financial year haveput significant pressure on the Group's working capital and whilst the recentsale of the Company's Gravesend freehold property was helpful, furthercash-raising initiatives are urgently required. On 30 January 2008 Southwind Limited entered into a loan agreement to provide acash injection to the Company by way of a £600,000 loan (less associated costs)in order to allow the Company to meet its short term obligations. Furtherdetails of the loan are set out in paragraph 3.2 of Part IV of the Circular. Itis intended that the loan will be repaid out of the proceeds of the Placing andOpen Offer. The Board believes that it is necessary to strengthen the balance sheet andprovide further working capital to allow the Company to continue to tradesolvently and to this end believes that the Placing and Open Offer is the mostequitable method to allow as many Shareholders to participate in the Company'sfuture as possible. 5. Current trading and future prospects As noted above, the Company announced its interim results for the six months to30 September 2007 on 31 December 2007. The Board is encouraged by the Group'sreturn to profitable trading and plans to build on this performance across theremainder of the second half of the financial year, and beyond. Revenues have shown a strong improvement in recent months and the Board isconfident of continued progress which will continue to reduce cumulative currentyear losses. The Board believes that, in combination with the Placing and OpenOffer, which will enhance the Group's working capital position, there is a firmfoundation for the short to medium term future. 6. Extraordinary General Meeting Set out at the end of the Circular is a Notice convening the ExtraordinaryGeneral Meeting to be held at 33 Hanworth Road, Sunbury on Thames, MiddlesexTW16 5DA on 28 February 2008 at 12 noon at which the Resolutions describedbelow, which are inter-conditional, will be proposed as ordinary resolutions forthe purposes of implementing the Placing and Open Offer as the Company currentlydoes not have sufficient headroom to issue and allot all the Offer Shares. (a) to increase the authorised share capital of the Company from £7,500,000 to£8,200,000 by the creation of 2,800,000 new Ordinary Shares; and (b) to authorise the Directors pursuant to section 80 of the 1985 Act to allotrelevant securities up to a maximum aggregate nominal amount of £1,972,079.50. 7. Irrevocable undertakings The Company has received irrevocable undertakings to vote in favour of theResolutions to be proposed at the Extraordinary General Meeting from each of theShareholder Directors and certain other Shareholders holding in aggregate,10,796,730 Existing Ordinary Shares representing approximately 43.3 per cent. ofthe Company's existing issued ordinary share capital. 8. Recommendation The Directors consider the Proposals to be in the best interests of the Companyand its Shareholders as a whole and accordingly unanimously recommendShareholders to vote in favour of the Resolutions to be proposed at theExtraordinary General Meeting as those Directors holding Existing OrdinaryShares have irrevocably undertaken to do so in respect of their beneficialholdings amounting, in aggregate, to 1,300,111 Existing Ordinary Shares,representing approximately 5.22 per cent. of the existing issued share capitalof the Company. 9. Availability of Circular The Circular setting out details of the Placing and Open Offer, the Resolutionsand a Notice of the Extraordinary General Meeting, accompanied by the Form of Proxyand the Application Form, is expected to be posted to Qualifying Shareholderstoday. Copies of the Circular will be available for a period of 12 months from the dateof the Circular on the Company's website (www.claritycommerce.com) free ofcharge in accordance with the requirements of Rule 26 of the AIM Rules. 10. Expected Timetable of Principal Events Open Offer Record Date Close of business on Monday 4 February 2008Dispatch of this document Tuesday 5 February 2008Open Offer Entitlements credited to CREST stock accounts of Wednesday 6 February 2008Qualifying CREST ShareholdersRecommended latest time for requesting withdrawal of Open 4:30pm on Wednesday 20 February 2008Offer Entitlements from CREST Latest time for depositing Open Offer Entitlements into 3:00pm on Friday 22 February 2008CREST Latest time for splitting Application Forms (to satisfy bona 3:00pm on Monday 25 February 2008fide market claims only) Latest time and date for receipt Form of Proxy for the 12 noon on Tuesday 26 February 2008Extraordinary General MeetingLatest time and date for receipt of completed Application 11:00am on Wednesday 27 February 2008Forms and payment in full under the Open Offer or settlementof relevant CREST instruction (as appropriate)Extraordinary General Meeting 12 noon on Thursday 28 February 2008Admission effective and dealings commence on AIM Friday 29 February 2008 CREST accounts credited Friday 29 February 2008Share certificates dispatched by Friday 7 March 2008 The dates set out in the timetable of principal events above and mentionedthroughout this announcement may be adjusted by the Company, in which event thedetails will be notified to the London Stock Exchange and, where appropriate, toShareholders. 11. Placing and Open Offer Statistics Offer Price 25p Number of Ordinary Shares in issue at the date of this document 24,911,682 Number of Offer Shares to be offered for subscription by the Company 7,117,623 Estimated net proceeds of the Placing and Open Offer * £1,625,906 Percentage of the Enlarged Issued Share Capital represented by the Open Offer Shares * 22.2% Number of Ordinary Shares in issue at Admission * 32,029,305 Market capitalisation of the Company on Admission at the Offer Price* £8.0 million * assuming maximum take up under the Placing and Open Offer 12. Definitions "1985 Act" the Companies Act 1985 (as amended)"2006 Act" the Companies Act 2006, to the extent in force and applicable"Admission" admission of the Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules"AIM" the AIM market operated by the London Stock Exchange"AIM Rules" the AIM rules for Companies published by the London Stock Exchange from time to time"Application Form" the application form to be used by Qualifying non-CREST Shareholders in connection with the Open Offer"Capita Registrars" a trading name of Capita Registrars Limited"certificated form" or "in certificated an ordinary share recorded on a company's share register asform" being held in certificated form (namely, not in CREST)"Code" the City Code on Takeovers and Mergers, as amended from time to time "Company" or "Clarity" Clarity Commerce Solutions plc"CREST" the relevant system (as defined in the Uncertificated Securities Regulations 2001) in respect of which Euroclear UK & Ireland Limited is the operator (as defined in those regulations)"CREST Excess Application Form" the application form to be used by Qualifying CREST Shareholders in connection with the Open Offer"Directors" or "Board" the directors of the Company or any duly authorised committee thereof"Engagement Letter" the engagement letter dated 20 August 2007 between SVS and the Company as amended by a variation letter dated 29 January 2007"Enlarged Issued Share Capital" the 32,029,305 Ordinary Shares in issue on Admission, assuming full subscription under the Open Offer"Existing Ordinary Shares" the 24,911,682 Ordinary Shares of 25 pence each in the capital of the Company in issue at the date of this document, all of which are admitted to trading on AIM"Extraordinary General Meeting" the extraordinary general meeting of the Company to be held at 33 Hanworth Road, Sunbury on Thames, Middlesex TW16 5DA at 12 noon on 28 February 2008 (or any adjournment thereof)"Form of Proxy" the form of proxy for use in connection with the Extraordinary General Meeting which accompanies this document"Group" the Company, its existing subsidiaries and subsidiary undertakings"London Stock Exchange" London Stock Exchange plc"Notice" the Notice convening the Extraordinary General Meeting which is set out at the end of this document"Offer Price" 25 pence per new Ordinary Share"Offer Shares" the 7,117,623 Ordinary Shares which are to be made available for subscription by Qualifying Shareholders under the Open Offer"Open Offer" the conditional offer to Qualifying Shareholders to subscribe for the Offer Shares at the Offer Price, as described in this document"Open Offer Entitlements" entitlements to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer"Open Offer Record Date" the close of business on 4 February 2008"Ordinary Shares" ordinary shares of 25 pence each in the capital of the Company"Overseas Shareholders" Shareholders resident in or citizens of jurisdictions outside the United Kingdom"Placing" the proposed conditional private placing of Offer Shares with institutional investors and Mr Ken Smith (being a director of Clarity) to the extent such shares are not taken up by Qualifying Shareholders in the Open Offer pursuant to the Placing Agreement"Proposals" the proposals set out in this document including the Placing and Open Offer"Prospectus Rules" the Prospectus Rules published by the Financial Services Authority"Qualifying CREST Shareholders" Qualifying Shareholders whose Existing Shares on the register of members of the Company on the Open Offer Record Date are held in uncertificated form"Qualifying non-CREST Shareholders" Qualifying Shareholders whose Existing Shares on the register of members of the Company on the Open Offer Record Date are held in certificated form"Qualifying Shareholders" holders of Existing Shares at the Open Offer Record Date"Resolutions" the resolutions to be proposed at the Extraordinary General Meeting as set out in the Notice"Shareholders" holders of Ordinary Shares"Southwind" Southwind Limited, an investment company wholly owned by a trust settled by Mr ALR Morton, a shareholder in the Company"SVS" the Company's broker, SVS Securities plc, 2 London Wall Buildings, London Wall, London EC2M 5PP"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland "United States" or "US" the United States of America, each State thereof, its territories and possessions (including the District of Columbia) and all other areas subject to its jurisdiction"uncertificated" or "in uncertificated form an ordinary share recorded on a company's share register as" being held in uncertificated form in CREST and title to which, by virtue of the Uncertificated Securities Regulations 2001, may be transferred by means of CREST"Underwriting Agreement" the conditional underwriting agreement dated 5 February 2008 entered into between the Company and Southwind Limited, and " Underwriting" shall be construed accordingly This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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