Publication of a Prospectus

RNS Number : 0699H

Toople PLC

02 June 2017

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, REPUBLIC OF IRELAND, SWITZERLAND OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States or any other jurisdiction, including in or into Canada, Japan, South Africa, Republic of Ireland, Switzerland and Australia or any other jurisdiction in which such offer or solicitation is unlawful ("Excluded Territory"). This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the prospectus in its final form published by Toople Plc in connection a subscription and offer for new ordinary shares and the proposed admission of those new shares to the Standard Listing segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange plc's main market for listed securities.  A copy of the Prospectus has been made available on the Company's website (www.toople.com) and is available for viewing at the National Storage Mechanism at www.hemscott.com/nsm. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Toople Plc

("Toople" or the "Company" or the "Group")

Publication of Prospectus

Subscription and Offer to raise a net minimum of £1 million

Proposed Director participation in the Subscription and Offer

Proposed issue of Fee Shares to Directors

Toople Plc (LSE: TOOP), a provider of bespoke telecom services to UK SMEs, has today published a prospectus (the "Prospectus") in connection with a conditional offer for subscription to raise minimum net proceeds of £1.0 million ("Minimum Net Proceeds") through the issue of new ordinary shares of 0.0667p each at an issue price of 2p per share ("Subscription and Offer") ("Initial Issue Price").

The Initial Issue Price is at a discount of 38.46 per cent. to today's closing middle market price of 3.25 pence per Existing Ordinary Share.

The Prospectus, which includes full details on the Group and the terms and conditions of the Subscription and Offer, has been approved by the UK Listing Authority. A copy of the Prospectus is available from https://www.toople.com/investors/reports--circulars/ and a copy has been submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.hemscott.com/nsm.do. 

Capitalised terms used in this announcement shall have the meanings set out in the Prospectus.

The Company is pleased to provide private and other investors the opportunity to participate in the Subscription and Offer, subject to the terms of the Prospectus, by applying through the PrimaryBid.com website and the PrimaryBid mobile app available on the Apple App Store and Google Play.   PrimaryBid provides this service to investors on a zero commission basis.

The Subscription and Offer is not underwritten and whilst no firm commitments are in place regarding the Subscription and Offer (save for the conditional subscription by Richard Horsman, the Company's Chairman, described below), Turner Pope Investments Ltd and Novum Securities have agreed to use reasonable endeavours to procure subscribers for the Subscription and Offer at the Initial Issue Price and it is intended that the Company will enter into subscription or placing arrangements in relation to the issue of Subscription and Offer Shares shortly after publication of this Prospectus alongside subscriptions via PrimaryBid ("Initial Closing") ("Initial Subscription and Offer Shares"). 

The outcome of Initial Closing via the PrimaryBid platform and initial subscriptions organised by the brokers as referred to above is expected to be announced in the week commencing 5 June 2017.

Director participation

Conditional on the Minimum Net Proceeds being raised pursuant to Initial Closing:

·     Richard Horsman, the Company's non-executive Chairman has agreed to subscribe for 1,250,000 Subscription and Offer Shares at the Initial Issue Price for an aggregate subscription price of £25,000 ("Director Subscription");

·     the Directors and Neil Taylor (former Chief Financial Officer of the Company) have agreed for a portion of the fees and remuneration owed to them of approximately £100,000 in aggregate to be settled through the issue of 5,000,000 new Ordinary Shares in aggregate, also at an issue price of 2p per share ("Fee Shares").

Use of proceeds and working capital

Assuming minimum net proceeds of £1 million are raised (approximately £1.14 million before costs), the net proceeds would be used as follows:

·     approximately £0.65 million for marketing, sales and customer acquisition activities;

·     approximately £0.35 million for general working capital purposes

Additional net funds received over and above the Minimum Net Proceeds will also be applied to marketing, sales and customer acquisition activities (as well as additional working capital associated with an increased marketing and sales activity and an increased customer base) as the Directors expect there to be a direct correlation between amounts spent on marketing, sales and customer acquisition activities and the number of customers acquired. 

Currently the Group has approaching 800 small businesses directly contracted with in excess of over 1,200 RGU's (revenue generating units) across the customer base. The Directors intend to use the net proceeds of the Subscription and Offer to target significant growth of the Group's customer base, using a number of customer acquisition routes including paid for leads and day to day marketing in particular building on the recently finessed marketing and advertising strategy which saw the launch of the Group's first direct digital marketing campaign at the end of February 2017. Following this campaign, orders for the Group's services and products increased 81% by the end of April 2017 (such that the aggregate number of customer orders in March and April 2017 was 316 compared to 175 orders in January and February 2017) with almost 30% of all orders in March and April being for the Group's cloud based telephony services.

The Directors believe, that while it is early days in Toople's development, subject to funding, there is a real opportunity for Toople to establish itself as a significant player in the telecoms SME market and to build on the Toople brand which was launched just last year.  The growth of the business is however highly dependent on marketing and advertising to increase the Group's customer base and the Group currently has insufficient working capital, therefore the outcome of Subscription and Offer will determine the future of the business.  Shareholders and investors should note that pursuant to the terms of the Subscription and Offer, if the Minimum Net Proceeds of £1,000,000 is not achieved within a period of 2 weeks following the date of the Prospectus, the Subscription and Offer will not proceed and it is possible that unless alternative funding is secured, by 30 June 2017 the Group will not have sufficient working capital to continue as a going concern. In the event that the Minimum Net Proceeds are not received within this timeframe, the Directors will consider all options available to the Group in order to avoid the Group being unable to operate as a going concern. This may include for example, realising value through sale of the Group's customer base or Merlin platform to another telecoms company, however there is no guarantee that the Group will be able to continue as a going concern if the Minimum Net Proceeds are not received. 

Andy Hollingworth, Chief Executive Officer of Toople, commented:

"This fundraising will provide Toople with a meaningful amount of funds to target significant growth in customers through digital marketing campaigns aimed at the UK SME market. We are pleased to be able to provide private investors access to the Subscription and Offer via PrimaryBid."

Details of the Subscription and Offer

The Group is seeking to raise up to £1.90 million in aggregate through the issue of up to 95,000,000 Subscription and Offer Shares at a price of 2p per share pursuant to the Subscription and Offer. Net of cash expenses (expected to be approximately £0.18 million, including irrecoverable VAT), the proceeds of the Subscription and Offer, assuming full subscription, will be approximately £1.72 million.

Each allotment and issue of Subscription and Offer Shares pursuant to the Subscription and Offer is conditional, amongst other things on:

1.    Receipt of valid subscription or placing agreements and Application Forms (as the case may be) such that the minimum net proceeds of £1 million (or such other amount as the Directors may decide at their discretion, acting reasonably) is raised within a period of two weeks following the date of this Document and receipt of funds;

2.    Admission;

3.    In accordance with Listing Rule 14.3, the Board being satisfied that at Admission at least 25 per cent. of the Ordinary Shares of this listed class will be in public hands (as defined in the Listing Rules) and that a minimum of 25 per cent. of the Enlarged Share Capital will be in the hands of investors whose individual and unconnected shareholdings will each equate to less than 5 per cent. of the Enlarged Share Capital, and who do not fall within any of the other excluded categories of investors in Listing Rule 14.2.2 (4); and

4.    If applicable, any supplemental prospectus required in connection with the Offer and Subscription being published.

Notwithstanding the Initial Closing that is intended as described above, the Subscription and Offer will remain open for a period of up to 12 months from the date of the Prospectus and, subject to the terms and conditions of the Subscription and Offer, allotments and issuances of Subscription and Offer Shares may take place at any time prior to the final closing date although the Company may close the Subscription and Offer to further subscriptions at any time for any reason. In particular the Company may close the Subscription and Offer so as not to exceed the maximum number of Subscription and Offer Shares that may be issued pursuant to the Prospectus. Any excess funds received by the Company (or PrimaryBid as agent to the Company) from subscribers for Subscription and Offer Shares following closing of the Subscription and Offer will be returned.

Subscription and Offer Shares to be issued pursuant to subscriptions received will be allotted, assuming all conditions of the Subscription and Offer have been met, at the discretion of the Company.

Allocation of Subscription and Offer Shares will be filled on a "first come first served" basis.   The New Ordinary Shares will rank pari passu in all respects with the Company's existing Ordinary Shares and will be issued fully paid.

Subject to the conditions of the Subscription and Offer being met, application will be made to the FCA for the Subscription and Offer Shares (together with the Fee Shares) to be admitted to the Standard List and to the London Stock Exchange and to trading on the London Stock Exchange's main market for listed securities. Admission is expected to take place and unconditional dealings in the Subscription and Offer Shares which are issued (and the Fee Shares) within two business days of the allotment of Subscription and Offer Shares with Initial Admission expected to occur in the week commencing 12 June 2017.

Full terms of the Subscription and Offer and the Risk Factors thereto are set out in the Prospectus which potential investors are encouraged to read in full.

Investors should make their own investigations into the merits of an investment in the Company.  Nothing in this announcement amounts to a recommendation to invest in the Company or amounts to investment, taxation or legal advice.

It should be noted that a subscription for Subscription and Offer Shares and investment in the Company carries a number of risks.  Investors should consider the risk factors set out in the Prospectus before making a decision to subscribe for Subscription and Offer Shares.  Investors should take independent advice from a person experienced in advising on investment in securities such as the Subscription and Offer Shares if they are in any doubt. 

PrimaryBid

The Company values its private investor base and is pleased to provide private and other investors the opportunity to participate in the Subscription and Offer by applying for Subscription and Offer Shares through the PrimaryBid.com platform. A further announcement will be made providing further details on this however it is expected that subscriptions may be made pursuant to the Subscription and Offer via PrimaryBid from 5p.m. on 2 June to 5 p.m. on 4 June 2017.  Subscriptions will be considered by the Company on a "first come, first served" basis subject to the conditions set out in the Prospectus. PrimaryBid will not charge commission for this service.

For further information:

Toople PLC	0800 0499 499
Andy Hollingworth, Chief Executive Officer
Hybridan LLP	020 3764 2341
Claire Louise Noyce
Redleaf Communications	020 7382 4730
Rebecca Sanders-Hewett	[e-mail]
Robin Tozer
Sam Modlin

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of the Prospectus	2 June 2017
Payment to be received from investors pursuant to the Subscription and Offer in cleared funds	On application
Admission and commencement of dealings in the New Ordinary Shares	Within two business days of allotment
Expected outcome of Initial Closing to be announced via an RIS	Week commencing 5 June 2017

These dates and times are indicative only, subject to change and may be brought forward as well as moved back, in which case new dates and times will be announced. The times referred to above are references to the time in London, UK.

 SUBSCRIPTION AND OFFER STATISTICS

Number of Existing Ordinary Shares	100,000,000
Fee Shares	5,000,000
Maximum number of Subscription and Offer Shares	Up to 95,000,000
Maximum number of New Ordinary Shares	Up to 100,000,000
Initial Issue Price per New Ordinary Share	2 pence per Ordinary Share
Minimum Net Proceeds of the Subscription and Offer1	approximately £1.00 million
Minimum Gross Proceeds of the Subscription and Offer1	approximately £1.14 million
Gross proceeds of the Subscription and Offer at the Initial Issue Price (assuming full subscription)2	£1.90 million
Net proceeds of the Subscription and Offer at the Initial Issue Price (assuming full subscription)2	approximately £1.72 million
Estimated Costs (assuming full subscription)2	£0.18 million
Percentage of Enlarged Share Capital represented by the New Ordinary Shares (assuming full Subscription)	50 per cent
Number of Ordinary Shares under warrant	8.1 million the New Warrants3
ISIN	GB00BZ8TP087
SEDOL	BZ8TP08
EPIC/TIDM	TOOP

Notes
¹ The Subscription and Offer is conditional upon, inter alia, minimum net proceeds of approximately £1.0 million being raised after costs. For illustrative purposes, in the event that the gross proceeds raised is equal to the Minimum Gross Proceeds of £1.14 million, it is expected that 57,000,000 Subscription and Offer Shares will be issued.

² The target size of the Subscription and Offer is £1.9 million with the actual size of the Subscription and Offer subject to investor demand and the Issue Price. The number of Subscription and Offer Shares to be issued pursuant to the Subscription and Offer and therefore the actual gross proceeds of the Subscription and Offer are not known as at the date of this announcement but will notified by the Company via an RIS announcement prior to each Admission. The Issue Price per Subscription and Offer Share is initially equal to the Initial Issue Price, however it may be increased after Initial Closing in accordance with paragraph 5 of Part II of the Prospectus. In the event that the Issue Price is increased above the Initial Issue Price, the aggregate Gross Proceeds of the Offer and Subscription, assuming full subscription, would increase beyond £1.9 million.

³ The number of ordinary shares under warrant pursuant to the New Warrants cannot be calculated as at the date of this Announcement as this is dependent on the quantum of funds raised pursuant to the Subscription and Offer which are introduced by certain brokers.

Cautionary statements

This announcement has been issued by and is the sole responsibility of Toople. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its accuracy or completeness. The information in this announcement is subject to change.

Copies of the Prospectus will be available from The Chapel, Britwell Road, Burnham, Buckinghamshire, SL1 8DF and on Toople's website at https://www.toople.com/investors/reports--circulars/ a. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

The distribution of this announcement and the Prospectus into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement and the Prospectus and/or any accompanying documents comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. In particular, subject to certain exceptions, this announcement and the Prospectus should not be distributed, forwarded to or transmitted in or into the United States or any other Excluded Territory.

Recipients of this announcement and/or the Prospectus should conduct their own investigation, evaluation and analysis of the business described in this announcement and/or the Prospectus. This announcement does not constitute a recommendation concerning an investment in the ordinary shares of Toople. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each Shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

This announcement includes "forward-looking statements".  All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's investment strategy, plans and objectives are forward-looking statements.  Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements.  These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement.  The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules, the Market Abuse Regulation or the Disclosure Guidance and Transparency Rules of the FCA.

Notes to Editors

Toople Plc offers broadband, VoIP and landline services and mobile phone packages to SMEs in the UK. Customers can visit the Toople.com web site to buy online, request a quote or instantly chat with an agent and chose the services relevant to their business.

The web site is powered by Toople.com proprietary Merlin software; a cloud based telecoms resourcing platform that acts as a portal for transparent, live pricing for services across the main four providers. Merlin also makes it easy for customers to add new services to their bespoke packages at any time.

Toople Plc has three core elements to its business. Firstly Toople.com, its online first approach for small businesses where customers can buy connectivity, mobility and business telephony in a simple online journey. Customers can do this by simply requesting a quote or instantly engaging into a chat with an agent. Potential customers experience Toople.com through digital media channels like Google, Bing, Business cost comparison sites and social media. Secondly, the wholesale business has a number of other telecoms companies that buy services wholesale, white label the propositions and resell on to their own customers. Thirdly, the Merlin software platform gives access to wholesalers who want to interconnect with carriers for provisioning and billing services for their own customers, where a monthly licence fee is applicable to access Merlin.

Toople plc is addressing a market of over 5 million companies in the UK that are employing less than 50 people. These companies are looking for straightforward telecom solutions, explained in a way that they can understand, provided at attractive consistent prices and backed up by high quality service support. Toople aims to be easy to do business with, offering transparent, competitive pricing and excellent UK based customer service. The Company plans to rapidly increase brand awareness and build its client base through strategic on-line marketing campaigns.

 

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