RNS Number : 3336U Crimson Tide PLC 01 April 2021 THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION, OR FORWARDING DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. 1 April 2021 Crimson Tide plc ("Crimson Tide" or the "Company") Placing to raise up to £6.0 million Crimson Tide ( AIM: TIDE), the provider of the mpro5 mobile platform, announces a proposed Placing to raise up to £6.0 million at a price per share of 3.0 pence ("Issue Price") and the proposed sale of up to 50,200,000 Sale Shares are the Issue Price on behalf of the Selling Shareholders (together with the Placing, the "Placing and Sale"). The Directors intend to use the net proceeds of the Placing to further develop the Company's core mpro5 platform and to develop an application based version of mpro5 aimed at micro sized businesses. Proceeds will also be invested in the Company's marketing capability, including in particular the go to market partner channel and expanding the Company's presence in the Healthcare sector. The Placing and Sale is conditional, amongst other matters, on the passing of the Resolutions at the General Meeting, Admission becoming effective by no later than 8.00 a.m. on 23 April 2021 (or such later time and/or date, being no later than 8.00 a.m. on 21 May 2021, as finnCap may agree) and the Placing Agreement between the Company and finnCap becoming unconditional and not being terminated prior to Admission (in accordance with its terms). finnCap Ltd ("finnCap") is acting as bookrunner and nominated adviser in connection with the Placing and Sale. The Placing Shares and Sale Shares are being offered by way of an accelerated bookbuild (the "Bookbuild"), which will be launched immediately following this Announcement (as defined below), in accordance with the terms and conditions set out in Appendix II to this Announcement. The final number of Placing Shares and Sale Shares will be agreed by finnCap and the Company at the close of the Bookbuild and the result will be announced as soon as practicable thereafter. It is envisaged that the Bookbuild will be closed no later than 4.30 p.m. on 1 April 2021. The Placing will not be underwritten. The Issue Price represents a discount of 11.7 per cent. to the Closing Price of 3.35 pence per Existing Ordinary Share on 31 March 2021, being the last Business Day prior to the announcement of the Placing. The Placing Shares and Sale Shares are not being made available to the public and are only available to Relevant Persons. Set out below in Appendix I is an extract from the draft circular that is proposed to be sent to Shareholders after the closing of the Bookbuild ("Circular"). The Circular, including the Notice of General Meeting, will be sent to Shareholders and published on the Company's website on 6 April 2021. This Announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing in Appendix II to this Announcement. Further information relating to the Placing is described in Appendix I to this Announcement. By choosing to participate in the Placing and Sale and by making an oral and legally binding offer to acquire Placing Shares and/or Sale Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the Appendices), and to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties and acknowledgements contained in Appendix II. Unless otherwise indicated, capitalised terms in this Announcement have the meaning given to them in the definitions section included in Appendix III. The ticker for the Company's ordinary shares is TIDE. The Company's LEI is 213800WAVVOPS85N2205. For further information: Crimson Tide plc Barrie Whipp / Luke Jeffrey +441892 542 444 finnCap (Nominated Adviser and Broker) Corporate Finance: Julian Blunt / James Thompson +44 20 7220 0500 Corporate Broking: Andrew Burdis +44 20 7220 0500 Alma PR (Financial PR) Josh Royston +44 7780 901979 For further information www.crimsontide.co.uk/ on Crimson Tide plc, see the website at: IMPORTANT NOTICES AND DISCLAIMER This announcement including its appendices (together, the "Announcement") and the information contained in it is not for publication, release, transmission distribution or forwarding, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, New Zealand, Japan or the Republic of South Africa or any other jurisdiction in which publication, release or distribution would be unlawful. 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 shares in the capital of the Company in the United States, Australia, Canada, New Zealand, Japan or the Republic of South Africa or any other state or jurisdiction where to do so would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. This Announcement has not been approved by the London Stock Exchange or by any other securities exchange. The new Ordinary Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, pledged, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States absent registration under the Securities Act, except pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The new Ordinary Shares have not been approved, disapproved or recommended by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of new Ordinary Shares. Subject to certain exceptions, the securities referred to herein may not be offered or sold in the United States, Australia, Canada, New Zealand, Japan or the Republic of South Africa or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, New Zealand, Japan or the Republic of South Africa. This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. No public offering of the new Ordinary Shares is being made in the United States, United Kingdom or elsewhere. All offers of the new Ordinary Shares will be made pursuant to an exemption under the Prospectus Regulation (EU) 2017/1129 and any relevant implementing measure in any member state (the "EU Prospectus Regulation"), or the Prospectus Regulation (Regulation (EU) 2017/1129) which forms part of domestic law pursuant to the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation"), as amended from time to time, from the requirement to produce a prospectus. This Announcement is being distributed to persons in the United Kingdom only in circumstances in which section 21(1) of the Financial Services and Markets Act 2000, as amended ("FSMA") does not apply. No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Regulation) to be published. This Announcement and the terms and conditions set out herein are for information purposes only and are directed only at persons who are: (a) persons in Member States of the European Economic Area and the United Kingdom, who are qualified investors (within the meaning of article 2(e) of the EU Prospectus Regulation ("Qualified Investors"); and (b) in the United Kingdom, Qualified Investors who are persons are qualified investors (within the meaning of article 2(e) of the "UK Prospectus Regulation") and who (i) have professional experience in matters relating to investments falling within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order; or (iii) are persons to whom it may otherwise be lawfully communicated; (all such persons together being referred to as "relevant persons"). This Announcement and the terms and conditions set out herein must not be acted on or relied on by persons who are not relevant persons. Persons distributing this Announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this Announcement and the terms and conditions set out herein relates is available only to relevant persons and will be engaged in only with relevant persons. This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the directors or the Company, or by any of its or their respective partners, employees, advisers, affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. This Announcement contains inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU exit) Regulations 2019/310) ("EU Exit Regulations"), encompassing information relating to the fundraise described above, and is disclosed in accordance with the company's obligations under EU Exit Regulations. In addition, market soundings (as defined in EU Exit Regulations) were taken in respect of the placing with the result that certain persons became aware of inside information (as defined in EU Exit Regulations), as permitted by EU Exit Regulations. This inside information is set out in this announcement. Therefore, upon publication of this announcement, those persons that received such inside information in a market sounding are no longer in possession of such inside information relating to the company and its securities. finnCap Ltd, which is authorised and regulated by the FCA for the conduct of regulated activities in the United Kingdom, is acting as nominated adviser and bookrunner to the Company and no one else in connection with the Placing and is not acting for and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing. finnCap's responsibilities as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his decision to acquire shares in the Company in reliance on any part of this Announcement. Except as required under applicable law, neither finnCap nor any of its directors, officers, partners, employees, advisers, affiliates or agents assume or accept any responsibility whatsoever for the contents of the information contained in this Announcement or for any other statement made or purported to be made by or on behalf of finnCap or any of its affiliates in connection with the Company, the new Ordinary Shares or the Placing. finnCap and each of its directors, officers, partners, employees, advisers, affiliates and agents accordingly disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by finnCap or any of its directors, officers, partners, employees, advisers, affiliates or agents as to the accuracy, completeness or sufficiency of the information contained in this Announcement. The distribution of this Announcement and/or the Placing in certain jurisdictions may be restricted by law. No action has been taken by the Company, finnCap or any of their respective affiliates that would, or which is intended to, permit an offering of the new Ordinary Shares in any jurisdiction or result in the possession or distribution of this Announcement or any other offering or publicity material relating to new Ordinary Shares in any jurisdiction where action for that purpose is required. This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions which may occur in the future, are beyond the Company's control and could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained in it, nor do they intend to. As a result of these risks, uncertainties and assumptions, the recipient should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. 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. Any investment decision to subscribe for Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by finnCap. The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions. This Announcement does not constitute a recommendation concerning any investor's option with respect to the Placing. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this Announcement and publicly available information. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. 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. Information to Distributors Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II ("MiFID II Delegation Directive"); and (c) local implementing measures (including insofar as MiFID II and the MiFID II Delegated Directive constitute retained EU law (as defined in section 6(7) of the European Union (Withdrawal) Act 2018) in the United Kingdom) ("Retained MiFID Provisions") (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the new Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II and the Retained MiFID Provisions; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II or the Retained MiFID Provisions (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the new Ordinary Shares may decline and investors could lose all or part of their investment; the new Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the new Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, finnCap will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II or the Retained MiFID Provisions; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the new Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the new Ordinary Shares and determining appropriate distribution channels. The following text and the definitions set out at Appendix III have been extracted from the Circular: Appendix I - EXTRACTS FROM THE CIRCULAR 1. INTRODUCTION On 1 April 2021, the Company announced that it had successfully raised gross proceeds of £6.0 million (£5.6 million net of expenses) through a Placing of 200,000,000 Placing Shares with certain existing and new institutional investors at an issue price of 3.0 pence per Ordinary Share. The Issue Price represents a 11.7 per cent. discount to the Closing Price of 3.35 pence per Ordinary Share on 31 March 2021, being the last Business Day prior to the announcement of the Placing. The Directors intend to use the net proceeds of the Placing to further develop the Company's core mpro5 platform and to develop an application ("App") based version of mpro5 aimed at micro sized businesses. Proceeds will also be invested in the Company's marketing capability, including in particular the go to market partner channel and expanding the Company's presence in the Healthcare sector. In addition, a further 50,200,000 Sale Shares were sold on behalf of the Selling Shareholders. The Placing and Share Sale are conditional, amongst other matters, on the passing of the Resolutions at the General Meeting, Admission becoming effective by no later than 8.00 a.m. on 23 April 2021 (or such later time and/or date, being no later than 8.00 a.m. on 21 May 2021, as finnCap may agree) and the Placing Agreement between the Company and finnCap becoming unconditional and not being terminated prior to Admission (in accordance with its terms). The purpose of this document is to set out the reasons for, and provide further information on, the Placing, to explain why the Board considers the Placing to be in the best interests of the Company and its Shareholders as a whole and why the Directors (other than Mr Goodwin and I who, as Selling Shareholders, have recused ourselves) recommend that you vote in favour of the Resolutions, as the Board intends to do in respect of their own legal and/or beneficial holdings (or those of their connected parties) of Ordinary Shares, in aggregate representing approximately 31.2 per cent. of the Company's issued share capital on 1 April 2021 (being the last Business Day prior to publication of this document). At the end of this document you will find a notice convening the General Meeting at which the Resolutions will be proposed. The General Meeting has been convened for 11.00 a.m. on 22 April 2021 and will take place at the offices of the Company at Oakhurst House, 77 Mt. Ephraim, Tunbridge Wells TN4 8BS. Please note, in light of the COVID-19 pandemic the Company strongly discourages Shareholders from attending the General Meeting in person as to do so would be inconsistent with current government guidelines relating to COVID-19 (as published as at the date of this document), in particular the advice for people to avoid public gatherings. Accordingly, Shareholders are urged to exercise their votes by submitting their proxy and appoint the Chair of the General Meeting as their proxy. Further information on the arrangements for the General Meeting are set out on page 13 of this document. 2. BACKGROUND TO, AND REASONS FOR, THE PLACING AND USE OF PROCEEDS Since the launch of its mobile business solutions in 2004, culminating in mpro5, a leading mobile app service for business, the Group's principal product focus has been to develop core functionality, including cloud-based job scheduling, alerts, analytics, interoperability in real time with IoT sensor data and expansion of API into other enterprise software. Funded almost exclusively through retained earnings the Group has grown its user-base to approximately 100,000 across SME, mid-market and enterprise level customers contracting on, typically, a 3 to 5 year basis with contract retention rates today in excess of 90 per cent. The mpro5 platform, though sector agnostic, has had demonstrable success in the facilities management, rail, retail and healthcare sectors. The Group has clients in the UK, Ireland, Denmark and the UAE. Following a successful financial year to 31 December 2020 which saw further strengthening of Crimson Tide's client base, its breadth of offering and quality of contracts the Directors now believe that the Group is ready to accelerate its growth, necessitating investment in a number of key areas: Go-to-market strategy Prior to 2018 the Group's go-to-market strategy comprised its own direct sales and marketing effort. This approach has been effective and more recently the growing credibility of the Group's client base has helped to speed up the mpro5 sales cycle. However, the direct approach has been constrained by headcount and lack of internal marketing leadership. In view of that, the Group launched a channel partner approach in 2018 with a view to maximising product reach and reducing sales cycle times. The partner model has been highly successful with the share of overall revenue via partners rising to approximately 56 per cent. in the year to 31 December 2020. Recruitment of partners has been entirely on a word of mouth basis. The Board now wishes to invest further in the Group's partner strategy with a view to taking the overall partner revenue share to approximately 90 per cent. in the medium term. Accordingly approximately £2.0 million of the Placing proceeds will be deployed in support of both the partner channel and the Group's own in-house marketing capability. Areas of focus will include an internal director of marketing, a US based partner director, and a dedicated partner team. Further investment is planned in the growing, and identified, opportunities in the healthcare sector, following earlier pilot successes and contracts with organisations such as the NHS, the World Health Organisation and the World Federation of Haemophilia. Platform investment Approximately £4.0 million of the Placing proceeds would be focussed on two important opportunities which now present themselves: · In response to clear market pull the Directors believe that further investment in the core mpro5 platform is now necessary. With over 100 client requested features in backlog, investment in more internal technical capability would help accelerate the appropriate response, building further rich functionality (including IoT and machine learning capability) and value into the platform, particularly in relation to the Group's emerging healthcare opportunity. The Directors believe that making mpro5 ever more relevant to clients, its subscription contracts will continue to renew and expand · To capitalise on over 15 years of enterprise mpro5 experience the Board has further identified the opportunity to develop a version targeted specifically at micro sized businesses. These businesses were prevalent in Crimson Tide's client list in its early days and the Company therefore is cognisant of what these clients seek from a mobile application. This market segment is comprised of organisations that are too small for full mpro5 deployment. Nonetheless this sector represents a large and valuable market for a suitably specified version from which further high margin recurring revenues could be derived. The micro segment could also provide a rich seam of clients to whom, in time as they develop, mpro5 might be upsold. The version is also deliverable globally. In summary, Crimson Tide has the opportunity to take advantage of identified opportunities by improving and widening the reach of mpro5. Its marketing strategy has been identified and recruitment made, funded by its existing cash resources. The "lite" version of mpro5 addresses the requirements of a known market. The Company has a measured strategy based upon experience and the management team to execute it. 3. CURRENT TRADING AND OUTLOOK The Company today released its preliminary results for the year to 31 December 2020, in which the Board was pleased to report that revenue increased by 21% to £3.5 million, EBITDA increased by 22% to £0.9 million and that the Company has continued to trade in line with the Board's expectations, having continued to sign encouraging deals. The Directors believe that with a growing partner channel, a new version of the mpro5 healthcare application and growing interest in its IoT (Internet of Things) module the Company is well set to take advantages of the growing opportunities available to it. The Company is focused on growing its long term contracted subscriber revenue base and has clear opportunities with, in particular,: · · · the expansion of mpro5's footprint across its existing clients, where mpro5 continues to prove a scalable solution for an increasingly compliance-led world refinement of its healthcare offering, where mpro5 is helping with a range of solutions across patient care, cleanliness and drug administration and confirmation a growing partner channel, both within the UK & Ireland and internationally The Directors believe that the Company's ambitions are only constrained by its currently limited bandwidth in terms of staffing and its limited reach to date in marketing mpro5. They believe that increasing the capital base will allow the Company to expand into sectors that are clearly available and deliver both innovation and ambition, whilst maintaining the Company's values and guarding shareholder value. 4. INFORMATION ON THE PLACING AND SHARE SALE (a) Placing of Placing Shares The Company has conditionally raised £6.0 million (approximately £5.6 net of expenses) by way of a placing of 200,000,000 new Ordinary Shares at the Issue Price with certain new and existing institutional and other investors. The Placing Shares will represent approximately 30.4 per cent. of the Enlarged Share Capital. The Placing Price represents a discount of 11.7 per cent. to the Closing Price of 3.35 pence per Existing Ordinary Share on 31 March 2021, being the last Business Day prior to the announcement of the Placing. For the purposes of section 571(6)(c) of the Act, the Directors confirm that the Issue Price was determined following discussion with finnCap and review of a number of relevant considerations. (b) Director participation in the Placing and related party transactions The following Directors have subscribed for an aggregate of 999,999 new Ordinary Shares pursuant to the Placing as set out below. Each of Mr. Jeffrey, Mr. Hurter and Mr. Hawkins' (together the "P