UPDATE REGARDING BRICKLIVE TOURS & FINANCING

RNS Number : 9028W

Live Company Group PLC

16 December 2019

 

16 December 2019

LIVE COMPANY GROUP PLC

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

UPDATE REGARDING BRICKLIVE THEMED TOURS AND FINANCING

Live Company Group plc (AIM: LVCG) is pleased to provide the following update regarding its business and financing.

Introduction

Since the acquisition of Bright Bricks in 2018, the Board believes that the Group has made significant commercial and operational progress and now has 16 BRICKLIVE themed tours in circulation.  In addition, the Group has secured international contracts with global partners, including IP partners such as Nickelodeon, part of Viacom International, and Penguin Books Limited.

Given the demand for BRICKLIVE's events and tours, the Group intends to accelerate its build programme for 2020, with the aim to build up to 14 BRICKLIVE themed tours, with a number of new tours including the global roll out of the Nickelodeon themed BRICKLIVE tours (excluding the United States of America and Puerto Rico), the BRICKLIVE Zoo and BRICKLIVE touring programmes.  The Group is also in discussions with other IP partners to create new themed touring shows and looks forward to keeping shareholders updated in this regard.

In order to ensure that the Group has the appropriate financial resources in place to fund its build programme to meet demand, the Company has agreed with YA II PN, Ltd. ("YA II") and RiverFort Global Opportunities PCC Limited (formerly Cuart Investments PCC Limited) (together the "Investors") to extend the maturity date of the existing loan facility, of which approximately £0.7 million remains outstanding, (the "Existing Facility") from December 2019 to December 2020.  In addition, the Company has also entered into a further loan facility with the Investors for up to £1.0 million (the "New Facility"), and the Company has drawn down £0.3 million (before costs).  The New Facility enables the Company to place orders, before the end of the year, with specialist steel and brick suppliers which have an 8-16 weeks lead time, to enable the Group to build up to 14 new themed tours in 2020.

In addition to the New Facility, the Company has entered into a subscription agreement with the Investors (the "Subscription Agreement"), whereby the Investors have agreed to make an equity investment of £2.0 million, before expenses (the "Subscription Amount"),through the subscription for, and issue to them of 6,666,667 new ordinary shares of 1 pence each in the capital of the Company ("Ordinary Shares") (the "Subscription Shares") at a price of 30p per share (the "Subscription Price") (the "Subscription").  Under an equity sharing agreement also entered into by the Company with the Investors (the "ESA"), an amount equal to the gross proceeds of the Subscription following its completion, will then be returned by the Company to the Investors (the "ESA Payment"), with the Company to receive back the ESA Payment, subject to certain pricing adjustments (as detailed below), on a pro rata monthly basis over the next 12 months pursuant to the ESA.

The Company is also pleased to confirm it has engaged finnCap Group plc to advise the Group on securing debt funding to support the Group's growth plans and the Group confirms that it has already engaged a number of financial institutions to assess their appetite to provide debt financing.  Further announcements will be made as appropriate.

Further details on BRICKLIVE's themed tours, the extension to the Existing Facility, the New Facility and the Subscription and ESA are set out below.

David Ciclitira, Chairman LVCG commented: "I'm delighted to report that we have agreed a new funding facility with the Investors which will assist the business to fast track its growth programme of new tours in 2020 and beyond.

The BRICKLIVE Zoo and BRICKLIVE touring divisions continue to perform strongly, and to meet the demand the Group will need to build new touring shows.  The New Facility will enable the Group to draw down £0.3 million in December 2019, with the option to drawdown up to a further £0.7 million in 2020.  The initial £0.3 million, will be used to place orders for long lead time items such as the specialist brick and steel suppliers before Christmas 2019, to allow for launch dates at the end of Q1 and Q2 2020.

The Subscription and ESA, will provide the Company with funding to settle the Existing Facility and New Facility and will also enable the Company to benefit from any uplift in the Company's share price.  Under the terms of the ESA, the Investors are not able to short the Company's shares and I will personally be subject to a lock-in agreement until the Existing and New Facilities are repaid.

The Company continues to review alternative debt facility options and we are in active discussions with finnCap.

I believe the real growth story of the Company Group will be realised in 2020 and 2021, when we begin the international rollout of our Nickelodeon themed BRICKLIVE tours in Q1 2020, develop new tours for the BRICKLIVE Zoo and BRICKLIVE touring divisions, and secure contracts with international partners, including new IP partners.  Accordingly, I anticipate 2020 will be a strong year for the Group."

Finally, the Company will be hosting a Shareholder event on Friday 17th January 2020 at 9.30 a.m. at Wembley Stadium, Wembley Park, London.  Shareholders and non-shareholders wishing to attend the event should register their interest by email ([e-mail]).  In order to be able to attend the event, you will need to have registered in advance with the Company and present photo ID.

BRICKLIVE Themed Tours

The Group is seeking to build up to 14 new themed tours in 2020, bringing the Group's total number of tours to 30 by the end of 2020.  The New Facility will enable the Company to create new touring shows across the following divisions:

1.   BRICKLIVE IP Programme: On 22 November 2019, the Company announced it had secured an international partnership with Viacom International Media Networks, owner of the Nickelodeon brand, to exhibit Nickelodeon and Nick Jr. themed BRICKLIVE tours globally (excluding United States of America, and Puerto Rico) up to 31 December 2024.

The Group will begin the rollout of the Nickelodeon BRICKLIVE themed tours internationally and the Group is in discussions with international partners regarding the launch of the first Nickelodeon BRICKLIVE tour in 2020.

In addition, the Company is in discussions with other IP partners to produce BRICKLIVE themed tours and further announcements will be made as appropriate.  Funding from the New Facility will assist with the creation of new tours.

2.   BRICKLIVE Zoo programme: The BRICKLIVE Zoo programme continues to perform very strongly and the Group has announced contracts with zoos in North America and Europe in 2019 and 2020.  The pipeline of enquires continues to grow and with our existing tours already leased in 2020 and 2021, the Group plans to create new tours in 2020 to meet this growing demand.

3.   BRICKLIVE Touring Shows: Since the acquisition of Bright Bricks in October 2018, BRICKLIVE has exhibited tours in Business Improvement Districts ("BID") areas (including shopping and town centres in BIDs) across the UK.  The Group has identified this as a key opportunity area, specialising in delivering experience-based events that attract footfall and create destination areas in BID areas.

Financing update

Existing and New Facilities

Further to the Company's announcements of 17 October 2018, 29 November 2019 and 5 December 2019, the Company is pleased to announce that it has agreed with the Investors to extend the maturity date of the Existing Facility from December 2019 to December 2020 (the "Extension").  As at the date of this announcement, approximately £0.7 million remains outstanding under the Existing Facility (the "Balance").  Pursuant to the Extension, the Balance will incur interest at 9% per annum on the full Balance, and the Balance and interest will be repayable in nine equal monthly instalments, with the first payment being in April 2020 and with the final payment being due in December 2020.  In the event the Existing Facility is repaid within three months of the date of this announcement, the Company shall benefit from a reduction in the interest.  As detailed in the announcements of 17 October 2018 and 29 November 2019, the Existing Facility can be converted into new Ordinary Shares in certain circumstances.

The Company and Investors have also entered into the New Facility for up £1.0 million.  The Company has drawn down £0.3 million of the New Facility (the "Drawdown") to enable the Group to accelerate its build programme and to place orders with steel and specialist brick suppliers, which have a typical lead in time of 8-16 weeks.  The Company has the option to draw down a further £0.7 million subject to the Investors' approval in 2020, should this be required by the Group.

Amounts drawn down under the New Facility will incur an interest charge of 9% and an implementation fee of 7% and the Drawdown of £0.3 million, along with applicable interest and fees, will be repayable in nine equal monthly instalments, with the first payment being in April 2020 and with the final payment being due in December 2020.  The New Facility does not have any conversion rights into Ordinary Shares.

The Existing Facility and New Facility are to be secured over the assets of the Group.  The Investors agree that the security created shall be subordinated to any security granted by a bank or financial institution to the Company after the date of this announcement.  The Company's subsidiary, Brick Live International Limited, has agreed to guarantee the Company's obligations under the Existing Facility and the New Facility.

Pursuant to the Extension, the 356,923 existing and unexercised warrants issued in connection with the Existing Facility, have been repriced, such that their exercise price is now 38.79p and the exercise period has been extended to be four years from the date of issue.

In connection with the Drawdown, the Investors will be issued with 232,018 new warrants, with each warrant having the right to acquire one new Ordinary Share.  If further funds are drawn down under the New Facility, the number of warrants to be issued will be in proportion to the amount drawn down.  The new warrants issued in connection with the New Facility have an exercise price of 38.79p and will be exercisable for a period of four years from the date of issue.

Subscription and ESA

The Company and Investors have entered into a subscription agreement (the "Subscription Agreement"), whereby the Investors have agreed to make a £2.0 million (before expenses) equity investment by subscribing for, and being allotted and issued, 6,666,667 Subscription Shares at a price of 30p per share.  The Subscription is condition, inter alia, on admission of the Subscription Shares to trading on AIM ("Admission").  The Subscription Shares will represent 8.39% of the Company's enlarged issued share capital on Admission.

In addition to the Subscription, the Company and Investors have entered into the ESA, pursuant to which the Subscription Amount will be returned by the Company to the Investors (the "ESA Payment").  Pursuant to the ESA, the Company will then receive back the ESA Payment, subject to a pricing adjustment and deduction of a 5% commission, on a pro rata monthly basis over the next 12 months, with the first payment being received in January 2020.  The exact monthly proceeds received by the Company are subject to adjustment, upwards or downwards, depending on the Company's share price at the time of such instalment payment, as explained in more detail below.

The key elements of the Subscription and ESA are as follows:

·        The Investors receive their subscription monies back from the Company then repay that £2.0 million to the Company in 12 monthly instalments, subject to adjustment based on the Company's share price, commission and other fees.

·        The structure is designed to remove any incentive on the Investors to lower the price per Ordinary Share.  Essentially, the Investors are "long" of the Company's Ordinary Shares and will sell them in order to return the proceeds to the Company, while, subject to the benchmark price being above the Subscription Price, making a return.

·        It fixes the number of Ordinary Shares being issued, thereby providing certainty as to the number of Ordinary Shares to be issued and the dilutive impact of the overall financing structure.

·        The structure is designed such that the Company and Investors benefit from an increasing share price.

·        There are selling restrictions and volume limits on any share sales by the Investors and they are contractually precluded from short selling the Company's Ordinary Shares.

The ESA provides the opportunity for the Company and Investors to benefit from a positive future share performance.  However, should the Company's share price not perform positively, then the Company will receive less than the amount it has returned to the Investors (subject to pricing adjustment) and, if its share price falls substantially, the Company may not receive any further monies under the ESA.  In no event will fluctuations in the Company's share price result in any increase in the number of Subscription Shares issued by the Company or received by the Investors.

Under the terms of the ESA, the Company will set off any amounts owed by the relevant Investor to the Company towards repayment of any amount of principal, or interest or other amount owed by the Company to the Investor pursuant to the Existing Facility and New Facility.

The ESA provides for a monthly payment over the next 12 months, made by the Investors to the Company, being the Subscription Amount divided by 12 (the "Monthly Settlement").  The Monthly Settlement may be adjusted downwards each month depending on the Company's share price performance with reference to the average of the ten lowest daily volume weighed average price ("VWAP") of the Ordinary Shares during the relevant month (the "Market Price") against a benchmark price of 34.2 pence (the "Benchmark Price"), being equal to 114% of the Subscription Price.  The Monthly Settlement will principally be used to repay the monies due under the Existing and New Facilities.

The Monthly Settlement is then calculated as follows:

·        If the Market Price is equal to the Benchmark Price, the Investors shall pay the Company the Monthly Settlements

·        If the Market Price is above the Benchmark Price, the Investor shall pay the Company an increased amount based on the following calculation:

-  Monthly Settlement + (555,556 Ordinary Shares x (Market Price - Benchmark Price) x Applicable Percentage))

The "Applicable Percentage" is 60% whilst the Company has only drawn down £300,000 under the New Facility,  In the event further funds are drawn down under the New Facility, the Applicable Percentage will be 50%.

·        If the Market Price is below the Benchmark Price, the Investor will pay the Company a reduced amount based on the following calculation:

-  Monthly Settlement - (555,556 Ordinary Shares x (Benchmark Price - Market Price))

The final Monthly Settlement will be calculated based on 555,551 Ordinary Shares.

Under the terms of the ESA, the Investors will not sell more than 20% of the volume traded in the Company Shares in any particular month, however this may increase to 25% of the volume traded if trading liquidity is low and it does not allow for full monthly exit.

In addition, the Group may, at its sole discretion, elect to either buy back and/or procure the sale of the Subscription Shares held by the Investors at any given time, subject to certain pricing/discount limitations.

As part of the overall financing package, David Ciclitira and those persons connected with him; have agreed with the Investors that they will not to deal in their Ordinary Shares, totalling 27,397,373, until such time as the Existing Facility and the New Facility are repaid in full, subject to certain exceptions.

AIM Application, Total Voting Rights

Application will be made for the Admission of the 6,666,667 Subscription Shares, with dealings expected to commence at 8.00 a.m. on 20 December 2019.

Following Admission, the enlarged share capital of the Company ("ESC") will comprise 79,500,419 Ordinary Shares with voting rights.  There are no Ordinary Shares held in treasury.  Following Admission, the above figure may be used by LVCG shareholders 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 Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Following Admission, David Ciclitira and his concert party, will continue to be interested in 27,397,373 Ordinary Shares, representing 34.46% of the Company's then ESC.  Simon Horgan, Ed Diment and Duncan Titmarsh will each continue to be interested in 3,152,330, 3,778,031 and 3,778,031 Ordinary Shares respectively, represent 3.97%, 4.75% and 4.75% of the Company's then ESC respectively.

Enquiries

Live Company Group Plc                                                                Tel: [phone]

David Ciclitira, Chairman Live Company Group

Ruth Cunningham, Chief Operating Officer

Strand Hanson Limited (Nominated Adviser)                               Tel: [phone]

Stuart Faulkner / Richard Tulloch / Georgia Langoulant       

Shard Capital Partners LLP (Broker)                                             Tel: [phone]

Damon Heath

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

LIVE COMPANY GROUP

Live Company Group plc ("LVCG", the "Company" or the "Group") is a live events and entertainment Company, founded by David Ciclitira in December 2017.  The Company was admitted to trading on AIM in December 2017, following the reverse acquisition of Brick Live Group and Parallel Live Group by LVCG.

The Group is a network of partner-driven fan-based 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.  BRICKLIVE, which is fast becoming a leading children's education and entertainment brand, actively encourages all to learn, build and play, and provides inspirational events and shows where like-minded fans can push the boundaries of their creativity.  Bright Bricks is the Group's production centre for building brick based models.  The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group.

Website: www.livecompanygroup.com.

 

END

 

 

MSCCKPDQDBDDFBD