Refinancing and Corporate Update

Live Company Group PLC

21 March 2024

 

21 March 2024

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014. as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

LIVE COMPANY GROUP PLC

("LVCG", the "Company" or the "Group")

CHAIRMAN-LED REFINANCING BY MEANS OF £1.77M OF CONVERTIBLE LOAN  

CONVERSION OF OUTSTANDING/ONGOING DIRECTOR REMUNERATION AND CERTAIN OTHER CREDITORS

DISPOSAL OF MAJORITY INTEREST IN STARTART

PLACING

ASSOCIATED RELATED PARTY TRANSACTIONS

TVR

PROPOSED GENERAL MEETING

 CORPORATE UPDATE

Highlights:

·    £1.77m total convertible loan provided to the Company from Chairman

·    Creditor settlements in Shares

·    Disposal of majority interest in StartArt

·    Placing to raise £352,000 (before expenses) together with additional £250,000 of convertible loan from Chairman (included in the above total) to bring gross amount raised to £602,000.

·    Existing businesses expected to be funded for this year

·    As announced previously, negotiations with two separate strategic investors with one mutually agreed term sheet. Any investments from these new strategic partners will be for further business development and further details to be announced if and when these progress.

Conversion of Chairman's debts and additional Chairman's convertible loan

It was announced on 29 December 2023, that the Company's Chairman, Mr David Ciclitira, had agreed to convert £350,000 of his outstanding debt to the Company into ordinary shares of 1p each in the Company ("Shares")  at an issue price of 3p per Share ("Conversions Price"). Following the year end David Ciclitira has also agreed to increase his commitment to the company by entering into a convertible loan of £1,182,932.41 ("Convertible Loan") and this loan now includes the conversion of the £350,000 of his outstanding debt previously announced.

The loan will be for a period of 24 months and reflects a back-to-back arrangement whereby Mr Ciclitira has borrowed monies in his personal capacity and will incur monthly interest from 1 July 2024, at the rate of 20% per annum until repaid, which broadly equates to the interest paid by Mr Ciclitira on his asset backed loan taken out to provide this funding to the Company.  The full amount of the facility has already been applied to the clearance of existing creditors including costs associated with the cancelled O2 London KPOP concert last September and, in particular, £630,000 has been used to repay the loan provider in relation to that event. The loan is convertible at Mr Ciclitira's discretion into shares in LVCG at 3p per Share over 24 months and will be secured against the Company's assets, post Close Brother's existing charge.

Mr Ciclitira has also agreed to an additional convertible loan note relating to unpaid fees up until end of February 2024. The amount is £336,649.80 and will also be convertible at 3p per Share.

As noted below, in conjunction with the Placing, Mr Ciclitira has provided an additional £250,000 of working capital by adding to his convertible loan - convertible at 6p - bringing the total to £1.77 million.

The issue of Shares on conversion of the Convertible Loan to Mr Ciclitira will be limited to such amount so as not to cross a Takeover Code Rule 9 threshold. (Conversion will be subject to the authorities to be sought at the General Meeting of the Company as referred to below.) The total number of Shares that are issuable under the Convertible Loan are 50,652,740 Convertible Loan Shares"). The 3p Conversion Price represents a premium of circa 50% to the closing price per Ordinary Share of 2.05p on AIM on 3 July 2023 being the last trading day before trading in the Company's share was suspended on AIM and as noted above £250,000 of this is convertible at 6p.

Additionally, on 20 February 2024, the LVCG remuneration committee awarded the following  options at £0.04 over a 4- year period to Mr Ciclitira ("Chairman Options"):

David Ciclitira

5 000 000

£0,04

£200 000,00

Mr Ciclitira has also, in conjunction with the recent audit, provided a letter of support for £1,000,000 to support the cash flow of the business until 31 January 2025.

Related Party Transaction

As Mr Ciclitira is a Director of the Company and a substantial shareholder (together with his wife, holding 20.92% of the current issued share capital), as defined under AIM rules for Companies (the "AIM Rules") he is a related party of the Company. Accordingly, the issue of the Convertible Loan up to the total aggregate amount of £1.77 million and the issue of the Chairman Options, are classified as a Related Party Transaction pursuant to Rule 13 of the AIM Rules.

The Directors of the Company, other than David Ciclitira, being: Stephen Birrell, Ranjit Murugason and Bryan Lawrie, consider, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, that the terms of the Convertible Loan and the issue of the Convertible Loan Shares and the issue of the Chairman Options are fair and reasonable insofar as the Company's Shareholders are concerned. In forming their view, the independent Directors have taken into account the Company's urgent need to reduce its debt and to provide sufficient ongoing working capital to the Company to enable the financial statements to be signed and trading on AIM to be restored.

NED Directors' Fees and Expenses

The Directors, (other than Mr Ciclitira) being; Ranjit Murugason, Bryan Lawrie, Maria Serena Papi (former Director) and Stephen Birrell, have elected to take their outstanding fees, up until end of February 2024, totalling £ 332,225.80 in Shares at an issue price of 3p per Share ("Settlement Price"). ("NED Fee Shares"). The issue of the 11,074,193 NED Fee Shares will be subject to the authorities to be sought at the General Meeting of the Company as referred to below. The Settlement Price represents a premium of circa 50% to the closing price per Ordinary Share of 2.05p on AIM on 3 July 2023 being the last trading day before trading in the Company's share was suspended on AIM.

The breakdown of amounts due to each director and corresponding number of shares are detailed in the below table.

Directors	Amount (£)	Issue Price (p)	NED Fee Shares
Ranjit Murugason	170,766	3	5,692,185
Bryan Lawrie	68,340	3	2,278,000
Stephen Birrell	28,439	3	947,971
Serenella Papi (former Director)	64,681	3	2,156,037

Staff Options

On the 20 February 2024 the LVCG remuneration committee awarded the following staff options at 4p ("Option Price") over a 4- year period:

	No.	Exercise price	Subscription amount
Sarah Ullman	900 000	£0.04	£36 000,00
Nicola Gross	200 000	£0.04	£8 000,00
Chris Botes	200 000	£0.04	£8 000,00
Luke Fowler	100 000	£0.04	£4 000,00
Dovydas Kaltanas	200 000	£0.04	£8 000,00
Gillian Anderson	100 000	£0.04	£4 000,00
Belinda Laubi	500 000	£0.04	£20 000,00

The Option Price represents a premium of circa 100% to the closing price per Ordinary Share of 2.05p on AIM on 3 July 2023 being the last trading day before trading in the Company's Shares was suspended on AIM.

Related Party Transaction

Ranjit Murugason, Bryan Lawrie and Stephen Birrell are Directors of the Company and accordingly are defined as Related Parties under the AIM Rules. Accordingly, the fee conversion, is classified as a Related Party Transaction pursuant to Rule 13 of the AIM Rules. 

The Directors of the Company, other than Ranjit Murugason, Bryan Lawrie and Stephen Birrell, being David Ciclitira considers, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, that the issue of the NED Fee Shares is fair and reasonable insofar as the Company's Shareholders are concerned. In forming his view, the independent Director has taken into account the Company's urgent need to reduce its debt and to provide sufficient ongoing working capital to the Company.

Creditors

The Company has been operating on reduced overheads as it works on cash preservation and cost reduction.  It has also agreed with a series of creditors for them to convert their debt into Shares at 3p per Share. The total amount of debt that would be converted into equity in the Company in full and final settlement has been fluid as agreements continue to be negotiated and concluded.

Certain creditors have agreed to take, in Shares, their outstanding fees totalling £1,252,839.66 at 3p per Share. A further £139,323 of outstanding creditors is under discussion. The issue of up to 41,761,322  creditor conversion Shares ("Creditor Shares") will be subject to resolutions sufficient to authorise the Shares to be issued which will be proposed at a forthcoming General Meeting - details of which are provided below.

The Company will also make use of its EBT facility to satisfy certain creditors and outstanding amounts owing to employees and contractors. It is expected that 28,669,333 Shares will be issued and sold via the EBT facility over a 20 month period. All Share sales will be completed in an orderly market fashion when there is sufficient market liquidity.

StartArt

The Company has agreed with the original vendors of StartArt to cancel the obligations to pay the outstanding deferred consideration against the return of the 80.06% acquisition of StartArt as announced on 8 July 2023.  All amounts owing to the vendors (being David Ciclitira and Ranjit Murugason) being up to an aggregate of £500,000 in cash and £519,800 equivalent in Ordinary Shares will henceforth be cancelled with the Company retaining a 19.94% interest. ("StartArt Disposal"). The Company believes in the Group's current financial situation, that it is prudent to preserve future cash-burn and avoid future financing costs by transferring the 80.06 % interest back to the original principals in cancellation of the remaining amounts owing under the original purchase agreement. The Company retains its holding in StartArt of 19.94% but without any ongoing financing obligations post 31 October 2023. The Company retained all financial responsibilities up until 31 October 2023

As detailed in the Company's recently released 2022 Final Accounts and 2023 Interim Accounts, the carrying Value of StartArt has been written down to £738,000 from an Initial Value of £3.924 million. This is largely due to the fact that some of the events planned for StartArt in 2023 did not take place and the company had not met its performance targets. Accordingly, the unaudited management accounts for the year ended 31 December 2023 show a turnover for StartArt of £386,000 and an operating profit of £32,000.

In compensation for his role at StartArt, Mr Murugason has been awarded 1,000,000  Shares at 3p per share. This amount is included in the total NED Directors' compensation detailed above.

Related Party Transaction

David Ciclitira is a Director of the Company and a substantial shareholder, is interested in 20.92 % of the Company's issued share capital. Ranjit Murugason is also a Director of the Company. Accordingly, they are defined as Related Parties under the AIM Rules for Companies (the "AIM Rules"). Accordingly, the StartArt Disposal is classified as a Related Party Transaction pursuant to Rule 13 of the AIM Rules. 

The Directors of the Company, other than David Ciclitira and Ranjit Murugason and, being Bryan Lawrie and Stephen Birrell consider, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, that the terms of the StartArt Disposal are fair and reasonable insofar as the Company's Shareholders are concerned. In forming their view, the independent Directors have taken into account both the fact that the projected new sources of income at the time of acquisition had not been realised together with the Company's urgent need to reduce its debt and to limit its funding exposure to non-performing parts of the Group.

Corporate Governance

David Ciclitira occupies the dual role of Executive Director and Chairman of the Board. Given the Group's present position David Ciclitira's experience in event marketing and promotion, and his familiarity with the Company's projects, the Company believes that it is appropriate for this situation to continue for the time being but intends to review this and split the roles when it is practical to do so.  The Company is also committed to the appointment of a qualified Finance Director. These changes will be reviewed by the Company before the publication of the next audited accounts.

The Company has appointed a non-Board FD Mr Russell Levinson, FCMA, who brings a wealth of experience with a range of companies. Mr Levinson is a chartered Management Accountant (FCMA) and MBA holder and has worked as FD and CFO across a number of different types of industries including retail, life sciences, music, infrastructure and business services, pending as referred to above the appointment of a permanent Board-level Finance Director.

Placing

To provide immediate additional funding for ongoing working capital for the Group, the Company has raised £352,000 (before expenses) by way of a placing and Company subscription of 35,200,000 new Shares ("Placing Shares") at a placing price of 1p per share (the "Placing Price") (the "Placing"). The Placing Price represents a discount of circa 50% to the closing price per Ordinary Share of 2.05p on AIM on 3 July 2023 being the last trading day before trading in the Company's share was suspended on AIM. The original intention as referred to in previous announcements was to have raised £500,000 and therefore Mr Ciclitira has provided an additional £200,000 (consisting of a prepayment of £148,000) which is part of an additional £250,000 convertible loan (of which Mr Ciclitira had previously prepaid £102,000) - convertible in this case at 6p per Share. The additional £52,000 is an advance payment for additional subscriber funds (5,200,000 new Shares) which have yet to be received by the Company. Payment for these additional Shares are due to be received imminently and will be returned to Mr Ciclitira once received.  The Placing and the additional convertible loan have therefore in aggregate raised £602,000 (gross) of working capital for the Group.

The Company has entered into a placing agreement dated 19 March 2024 (the "Placing Agreement") with a placing agent, to which they, as agents for the Company, have procured places for the Placing Shares at the Placing Price. The obligations of the placing agent under the Placing Agreement are conditional, inter alia, upon the admission of the Placing Shares to trading on AIM ("Placing Share Admission") having occurred by 8.00 a.m. on 20 March (or such later time and/or date as may be agreed, being no later than 8.00 a.m. on 21 March), and there being no material breach of the warranties given to prior to admission of the Placing Shares. Following Placing Share Admission, such Placing Shares will rank pari passu with the existing Ordinary Shares. The issue of the Placing Shares is not conditional on the authorities to be sought at the forthcoming General Meeting as referred to below.

Based upon the transactions set out in this announcement and the Group's current financial projections including income from BrickLive and at least one KPOP event in 2024, the Company is not anticipating the need for additional funding this year for its existing businesses.

AIM Application, General Meeting and Total Voting Rights

The issue of up to 50,652,740 Convertible Loan Shares at 3p and 4,166,667 Convertible Loan Shares at 6p, the 11,074,193 NED Fee Shares and up to 41,761,322  Creditor Shares amounting in aggregate to 107,654,922 new Shares will be subject to the passing of Resolutions sufficient to authorise the new Shares to be issued which will be proposed at a forthcoming General Meeting. 

The Convertible Loan Shares, the NED Shares, the Creditor Shares and Placing Shares amounting in aggregate to up to 107,654,922 new Shares ("New Shares") will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Shares, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue.

Save for the Placing Shares, the issuance of the New  Shares is conditional upon, inter alia, the passing of Resolutions to be put to Shareholders of the Company at the General Meeting proposed to be held on 16 April 2024 ("GM") to provide authority to the Directors to issue and allot the required shares on a non-pre-emptive basis. A circular containing a notice of the GM will be posted to shareholders shortly. 

Application will be made for 35,200,000 Placing Shares to be admitted to trading on AIM and it is expected that the admission in respect of 35,200,000  Shares on AIM will take place on or around 21 March 2024. ("Placing Admission").

Restoration of trading of the Company's Shares on AIM is expected to occur on 21 March 2024 at 7:30am prior to Placing Admission.

Conditional on the passing of the Resolutions at the GM, application will be made for the Convertible Loan Shares at both 3p and 6p, the NED Fee Shares and the Creditor Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on a date to be notified in April 2024 for all but the Convertible Loan shares which as detailed above will be converted over a two-year period.

Following the admission of the initial tranche of 35,200,000 Placing Shares, the enlarged issued share capital of the Company will comprise 295,123,920 ordinary shares of 1p each ("Shares").  Each Share has one voting right.  No Shares are held in treasury.  The above figure may, following Placing Admission, be used by LVCG shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

A Circular including the Notice of Meeting for the GM will be posted shortly ("Circular").

Following the General Meeting and taking into account the potential Convertible Loan  Shares,  the NED Fee Shares, the Creditor Shares and all other existing Shares, the potential maximum total number of Shares in issue will be 402,778,842 .

Existing Warrants

The Company is pleased to confirm that it is proposing that all existing warrants will be extended until 30 June 2026 and repriced at an exercise price of 3p.  Existing warrant holders have been contacted to approve this extension, however any warrant holders who would like to approve this extension who have not been contacted should get in touch with the Company as soon as possible.  

Corporate Update 

As indicated in the last Interim Statement, the revenue in the first half included exceptional items which have not been replicated in the second half which was also significantly affected by the cancelled O2 KPOP event and the associated sunk costs in the Autumn, and therefore  overall the Group is likely to be substantially loss-making for the year to December 2023.

Regarding the current year, as announced on 29 December 2023, the Company continues to operate as per the usual course of business with 15 Bricklive Tours already booked for 2024. BrickLive is therefore anticipated to be the main source of revenue in the current year supplemented by a planned single KPOP event later on. The StartArt division (now 19.94% owned by the Group) is currently in preparations for a potential South African Eye art exhibition and StART London which will take place in a new location - KX - the old Camden Town Hall. Live Company Sports and Entertainment is actively working towards the potential hosting of a Cape Town e-prix in 2025.

As announced on 1 March 2024, the Company has also been in negotiations with two separate strategic investors. Whilst both negotiations are ongoing, one of these has already resulted in a mutually agreed term sheet and should these negotiations be progressed, a further announcement will be made.  Any investments from these new strategic partners will be for further business development.

Enquiries:

Live Company Group Plc David Ciclitira, Executive Chairman Sarah Dees, Chief Operating Officer	Tel: [phone]
Beaumont Cornish Limited (Nominated Adviser) Roland Cornish/Rosalind Hill Abrahams	Tel: [phone]
CMC Markets UK Plc  (Broker) Thomas Smith	Tel: [phone]

About Live Company Group

Live Company Group Plc ("LVCG", the "Company" or the "Group") is a live events, entertainment and sports events Company, that has been trading on AIM since 2017.

The Group is divided into four divisions:

·    BRICKLIVE - consisting of a network of partner-driven fan-based and touring shows using BRICKLIVE created content worldwide. The Company owns the rights to BRICKLIVE - an interactive experience built around the creative ethos of the world's most popular construction toy bricks. The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group. 

·    LVCG owns the brand KPOP Lux and is the Executive Producer of KPOP Lux.

·    LVCG owns 19.94 % of StART Art Global (SAG) - SAG owns StART Art Fair in London which has been staged over the last 10 years at the Saatchi Gallery.

·    Live Company Sports and Entertainment (LCSE) - LCSE owns LCSE Pty in South Africa.

LVCG is a founder shareholder in E-Movement - the promoter of the Formula E Race in Cape Town. As part of this relationship E-Movement has retained LCSE (through E-Movement holdings) as its implementation partner. E-Movement Holdings a 100% subsidiary of Live Company Group has the right to sell sponsorship for the Formula E race in Cape Town.

IMPORTANT NOTICES

Neither this Announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.  Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions. The securities referred to in this Announcement have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or with any securities regulatory authority of any state or jurisdiction of the United States, or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and, in each case, in compliance with the securities laws of any state or other jurisdiction of the United States.

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

Cautionary statements

This Announcement may contain, and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation (including to meet the requirements of the AIM Rules, MAR, the Prospectus Regulation Rules and/or FSMA), the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based. Statements contained in this Announcement regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement.

No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future years would necessarily match or exceed the historical published earnings per share of the Company. Any indication in this Announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decisions to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by the Sole Bookrunner.

The Placing Shares to be issued pursuant to the Capital Raise will not be admitted to trading on any stock exchange other than AIM.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.

 

END