TIDMALB
RNS Number : 6084F
Albert Technologies Ltd
16 July 2019
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF
THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN
16 July 2019
Albert Technologies Ltd.
("Albert Technologies", the "Company" or the "Group")
Proposed cancellation of admission to trading on AIM
Albert Technologies today announces that it is proposing to
cancel the admission to trading on AIM of its Ordinary Shares.
A circular will shortly be published and sent to all
Shareholders setting out further details of the Delisting and the
implications for Shareholders. The Circular will also contain a
notice convening an Extraordinary General Meeting which is to be
held at Bryan Cave Leighton Paisner LLP, Adelaide House, London
Bridge, London, United Kingdom EC4R 9HA at 10 am on 20 August 2019,
at which the approval of Shareholders of the Delisting will be
sought. In the event that Shareholders approve the Delisting it is
anticipated that trading in the Ordinary Shares on AIM will cease
at close of business on 27 August 2019 and cancellation of
admission to trading on AIM of the Ordinary Shares will become
effective at 7:00 a.m. UK time on 28 August 2019.
Commenting on the proposal, Or Shani, CEO of Albert Technologies
said:
"Albert is a very different company to the one that listed on
AIM four years go. The Company is now an early-stage disruptive
technology company, targeting the enterprise market, and operating
in an emerging technology environment. Albert has trebled its
revenues from 2017 to 2018 and growth continues but with an
immature revenue pipeline it is difficult to forecast with the
accuracy the public market requires.
"To support further growth, it will be necessary to seek
additional funds and the Directors believe that it is in the best
interests of the Company to secure a strategic or financial
investor with knowledge of the company's core markets, who can
assist the Company with accelerating the distribution of the
company's proprietary technology, expand its revenue growth and
increase its market penetration in the enterprise market. These
types of investors are unlikely to be forthcoming whilst the
company remains admitted to trading on AIM."
Lisa Gordon, Chair of Albert Technologies, said:
"The Directors believe the current market valuation does not
reflect the Albert's market opportunity, the value of its
technology, its current and potential client list, and the overall
progress we have made in the enterprise market in the last two
years. On the contrary, the Board believes it negatively impacts
the company's business, its potential for growth and our ability to
raise necessary further funding through the public markets is
significantly constrained. As a result, we do not believe that
remaining listed on AIM is in the best interests of the Company and
its shareholders".
Attached below are extracts from the Chair's letter contained in
the Circular.
For further information, please visit www.albert.ai or
contact:
Albert Technologies Ltd
Tel: +972 3537 7137
Or Shani, Chief Executive Officer
Yoram Freund, Chief Financial Officer
https://albert.ai/
Cantor Fitzgerald Europe (Nominated Adviser
and Broker)
Philip Davies Corporate Finance
William Goode
Caspar Shand-Kydd Equity sales
Arthur Gordon +44 (0)20 7894 7000
The Nisse Consultancy (Media Relations)
Jason Nisse +44 (0)7769 688618
This announcement has been released by Yoram Freund, CFO, on
behalf of the Company.
Introduction
The Board is proposing a resolution to approve the Cancellation
at the Extraordinary General Meeting to be held at 10 am on 20
August 2019. The Directors unanimously consider that the proposed
Cancellation to be in the best interests of the Company and its
Shareholders as a whole, and unanimously recommend that
shareholders vote in favour of the Cancellation at the
Extraordinary General Meeting. A notice convening the Extraordinary
General Meeting has been sent to all shareholders.
The Cancellation is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75% of the votes cast by
Shareholders (whether present in person or by proxy) at the
Extraordinary General Meeting, notice of which is set out at the
end of this document.
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the date of the proposed
Cancellation.
Overview of the Company and Financial Performance
Founded in 2010, the Company is a global software company and
the creator of "Albert" - the first-ever fully autonomous
cross-channel artificial intelligence marketing platform. Albert is
a cloud-based artificial intelligence platform that plugs into a
digital marketer's existing tech stack and operates it.
The Company's strategy is focused on deploying Albert as a SaaS
product ("Software as a Service") for brands and agencies.
The Company's Research & Development team is based in Israel
and its Sales and Marketing functions are based in the United
States of America.
The Company announced its full year results for the year ended
31 December 2018 on 26 March 2019. A copy of those full year
results and audited accounts are available on the Company's website
at: http://www.albert.ai. The financial highlights from those
accounts included:
-- the Company's revenues increasing to $4.6m, (2017: $1.7m);
-- average monthly revenue per client increased by a multiple of 1.5, year on year;
-- an adjusted EBITDA* loss of $12.2m (2017: $11.4m);
-- operating loss of $12.7m (2017: $11.8m); and
-- following a fundraise in June 2018 which raised net of
$16.8m, the net cash position of the Company at year end was $15.4m
(2017: $11.1m).
The 2018 operational highlights included:
-- the Company expanding its services with Enterprise clients
and agencies over the period, for example:
- the number of Enterprise clients increased by a factor of four;
- the Company made progress in direct activity with top global agencies; and
- the Company expanded its relationship and service offering with existing enterprise clients;
-- the Company employed additional staff, mainly account
management functions, to support its Enterprise clients'
activities. The Company now employs 114 people globally; and
-- the Company transiting its internal culture from a
tech-centric focus to a broader sales and marketing culture in
order to provide enterprise-grade service to its clients.
On 28 May 2019, the Company announced an update on trading for
the first four months of the current financial year and advised
that revenue growth for the year to date had been slower than
anticipated. This was principally due to a longer ramp up time with
Enterprise clients.
Additionally, in that announcement it was noted that:
-- in taking into account the performance for the start of the
year, and the fact that a number of Enterprise clients' sales,
onboarding and expansion of their activities took longer to
implement than the Company's previous roster of midsize and small
businesses, the Board anticipated that revenues for 2019 were
unlikely to reach market expectations at that time, which
forecasted revenues to be more than double than the revenues
received in 2018;
-- the Board expected growth to improve over the next months
based on its assessment of the Company's existing client base and
the pipeline of opportunities for sales;
-- the Board expected that the final position for 2019 would
show significant improvement over the position and performance
achieved by the Company in 2018 and that the Company would meet its
revised revenue expectations. However, it was also noted that it
was difficult to accurately predict short-term revenue outcomes for
the Company;
-- the Company maintained strict cash control and had taken
active steps to reduce the Company's cost base and that the Company
would continue to do so in order to align the Company's cost base
with the Company's growth pace and to preserve cash; and
-- the Board was confident about the longer-term market
opportunities for the Company and its continued prospects.
Since the May announcement, the Company has made progress by
entering into new agreements with new and existing Enterprise
clients. While these new agreements are not expected to have a
material impact on the Company's current year forecasts, these
agreements do support and underpin the Board's expectation that the
revised 2019 revenue forecasts will be achieved.
As at 30 June 2019, the Company has a cash balance of
approximately $9m and has sufficient working capital for
approximately ten to twelve months based on current financial
projections. Accordingly, to support further growth and to
potentially take the Company through to a positive cash position,
the Board believes it will be necessary to seek additional funds in
the near future of an amount of not less than $10m.
Background to, and reasons for, the Cancellation
The Board is of the opinion that the Company, as currently
constituted, has an entirely different financial and business
profile to that which existed at the time of the Company's IPO in
2015.
The Company is now an early-stage disruptive technology company,
targeting the Enterprise market, and operating in an emerging
technology environment. At this stage of the Company's development
and having regard to its Enterprise client pipeline, the Company's
revenue growth is difficult to forecast with high levels of
accuracy and the Board is of the opinion that operating losses will
continue to be incurred by the Company due to the ongoing
investment required to develop its business within the Enterprise
market. To support further growth, the Board believes it will be
necessary to seek additional funds in the near future of an amount
of not less than $10m.
The Board is of the opinion that the Company's current market
valuation does not reflect the Company's market opportunity, the
value of its technology, its current and potential client list, and
the overall progress the Company has made in the Enterprise market
in the last two years. In coming to this opinion, the Board also
took into account the revised market forecasts for 2019 revenue. It
is the Board's view that the current market valuation negatively
impacts the Company's business, its potential for growth, and its
future financing prospects.
It is also the Board's view, which is supported by recent
discussions held with some of the Company's major independent
shareholders, that the Company's ability to raise necessary further
funding through the public markets, is significantly
constrained.
Therefore, the Directors believe that it is in the best
interests of the Company to secure a strategic or financial
investor with knowledge of the Company's core markets, who can
assist the Company with accelerating the distribution of the
Company's proprietary technology, expand its revenue growth and
increase its market penetration in the Enterprise market.
Following initial consultations with a number of financial
advisers and potential partners, mainly in the United States of
America, the Directors are of the opinion that these types of
investors are unlikely to be forthcoming whilst the Company remains
admitted to trading on AIM, as the vast majority of such potential
investors invest in companies at our stage, only if privately
held.
After careful consideration of all the above circumstances and
issues, the Directors have reached the conclusion that the public
market is not an optimal environment for the Company to succeed. In
reaching this conclusion, the Directors have considered, in
addition to the above reasons, the following further factors:
-- the performance of the Company's share price, which has been
disappointing in recent months;
-- to support future growth, it would be in the best interests
of the Company to raise additional funding from strategic investors
who are active in the markets in which the Company and its
technology operates, and given that in the Directors' opinion, it
is likely that the Ordinary Shares will remain undervalued whilst
publicly traded; and
-- approximately 80% of the Company's current issued share
capital is held by the Company's management (including
ex-management) and three largest external Shareholders, resulting
in a limited free float and liquidity in the Ordinary Shares with
the consequence that the AIM listing of the Ordinary Shares does
not, in itself, offer investors the opportunity to trade in
meaningful volumes or with frequency within an active market.
Therefore, following careful consideration of all the above
factors, the Directors believe that it is in the best interests of
the Company and its Shareholders as a whole to seek the proposed
Cancellation at the earliest opportunity.
Process for, and principal effects of, the Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold directly or indirectly Ordinary Shares in the
event that the Cancellation is approved and becomes effective. Such
Shareholders should consider selling their interests in the market
prior to the Cancellation becoming effective.
Under the Israeli Companies Law, 5759-1999, and the regulations
promulgated thereunder as shall be in effect from time to time (the
"Companies Law"), the Company is required to give at least 35 clear
calendar days' notice of the Extraordinary General Meeting. Under
the AIM Rules, the Company is required to give at least 20 clear
Business Days' notice of the Cancellation. Additionally, the
Cancellation will not take effect until at least five clear
Business Days have passed following the passing of the resolution
for the Cancellation. If the resolution for the Cancellation is
passed at the Extraordinary General Meeting, it is proposed that
the last day of trading in Ordinary Shares on AIM will be 27 August
2019 and that the Cancellation will take effect at 7.00 am on 28
August 2019.
The principal effects that the Cancellation will have on
Shareholders include the following:
(a) there will no longer be a formal market mechanism enabling
Depository Interest Holders to trade their Depository Interests on
AIM (or any other recognised market or trading exchange);
(b) in the absence of a formal market and quote, it may be more
difficult for Shareholders and Depository Interest Holders to
determine the market value of their investment in the Company at
any given time;
(c) while the Ordinary Shares and Depositary Interests will
remain freely transferable pursuant to the Articles of Association
of the Company and a secondary market trading facility is intended
to be set up through Asset Match following Cancellation (see below
for further details), the Ordinary Shares and Depositary Interests
may be more difficult to sell compared to shares of companies
traded on AIM (or any other recognised market or trading exchange);
and
(d) the Company will no longer be subject to the AIM Rules and,
accordingly, Shareholders will no longer be afforded the
protections given by the AIM Rules. In particular, the Company will
not be bound to:
(i) make any public announcements of material events, or to
announce interim or final results; comply with any of the corporate
governance practices applicable to AIM companies; announce
substantial transactions and related party transactions; or comply
with the requirement to obtain shareholder approval for reverse
takeovers and fundamental changes in the Company's business;
(ii) Cantor Fitzgerald will cease to be the nominated adviser
and sole broker to the Company; and
(iii) the Cancellation might have either positive or negative
taxation consequences for Shareholders and Depository Interest
Holders (Shareholders or Depository Interest Holders who are in any
doubt about their tax position should consult their own
professional independent adviser immediately).
Under the current circumstances, the Company may not undertake a
buyback of the Ordinary Shares (in connection with the Cancellation
or otherwise) due to restrictions under the Israeli Companies Law
prohibiting Israeli companies from repurchasing their shares,
unless certain profitability and creditworthiness conditions are
met.
At this stage, the Company anticipates that it will retain an
appropriate number of independent Non-Executive Directors on its
Board following the Cancellation and continue to follow customary
corporate governance practices.
The Company intends to continue to maintain the Company's
website (http://www.albert.ai) and to post updates on that website
from time to time, although Shareholders should be aware that there
will be no obligation on the Company to include the information
required under AIM Rule 26 or to update the website as required by
the AIM Rules.
The Company will remain registered with the Israeli Registrar of
Companies in accordance with and subject to the Companies Law,
notwithstanding the Cancellation. Shareholders should also note
that the Takeover Code does not apply to the Company. Although, the
current Articles do contain similar protections as set out in the
Takeover Code in the event that there is an offer to acquire the
Ordinary Shares of the Company, the Company's current intention is
to remove those protections from the Articles after the
Cancellation, subject to the requisite approval of the Company's
Shareholders.
Following the Cancellation, it will still be possible to hold
Depository Interests in CREST.
Transactions in Ordinary Shares
Shareholders should note that they are able to trade in the
Ordinary Shares on AIM prior to the Cancellation.
The Board is aware that the proposed Cancellation, should it be
approved by Shareholders at the Extraordinary General Meeting,
would make it more difficult to buy and sell Ordinary Shares in the
Company following the Cancellation. Therefore, the Company has
arranged a secondary market trading facility to assist Shareholders
to trade in the Ordinary Shares, and this will be put in place from
the day of Cancellation.
Secondary market trading facility
The secondary market trading facility will be provided by Asset
Match and will be reviewed on an annual basis. This facility will
allow existing shareholders of the Company, and new investors, to
trade Ordinary Shares by matching buyers and sellers through
periodic auctions. Asset Match operates an open auction system
where volumes of bids and offers at different prices are displayed
on its website together with the closing date of the auction. At
the end of each auction period Asset Match passes this information
through a non-discretionary algorithm that determines a "fair"
share price based on supply and demand and allocates transactions
accordingly. Bids and offers may be made and withdrawn at any time
before the closing date of each auction.
Shareholders will continue to be able to hold their shares in
uncertificated form (i.e. in CREST) and should check with their
existing stockbroker whether they are willing or able to trade in
unquoted shares. Shareholders wishing to trade shares through Asset
Match must do so through a stockbroker and a comprehensive list of
stockbrokers who have signed up to access the Asset Match platform
is available on request.
Should the Cancellation become effective and the Company put in
place the secondary market trading facility, details will be made
available to Shareholders on the Company's website at
http://www.albert.ai and directly by letter or e-mail (where
appropriate).
Further information about the secondary market trading facility,
including indicative prices and a history of transactions, will be
available on the Asset Match website which is located at
www.assetmatch.com.
Should Cancellation proceed, Shareholders may contact Asset
Match in relation to any queries regarding trading via the
secondary market trading facility by emailing
dealing@assetmatch.com.
Shareholders should note that there can be no guarantee that the
secondary market trading facility will be available on a continuous
basis or at all, and that any transfer of shares may be subject to
the approval by the Board, not to be unreasonably withheld.
Process for Cancellation
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75% of votes cast by Shareholders
at an Extraordinary General Meeting. Accordingly, the Notice of
Extraordinary General Meeting set out at the end of this document
contains a special resolution to approve the Cancellation.
Furthermore, Rule 41 of the AIM Rules requires any AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify shareholders and to
separately inform the London Stock Exchange of its preferred
cancellation date at least 20 Business Days prior to such date. In
accordance with AIM Rule 41, the Directors have notified the London
Stock Exchange of the Company's intention, subject to the
resolution being passed at the Extraordinary General Meeting, to
cancel the Company's admission of the Ordinary Shares to trading on
AIM on 28 August 2019. Accordingly, if the resolution for the
Cancellation is passed the Cancellation will become effective at
7.00 am on 28 August 2019. If the Cancellation is approved, Cantor
Fitzgerald will cease to be nominated adviser and the sole broker
of the Company and the Company will no longer be required to comply
with the AIM Rules.
Recommendation
The Directors consider that the Cancellation is in the best
interests of the Company and its Shareholders as a whole and
therefore unanimously recommend that you vote in favour of the
Cancellation, as they have undertaken to do in respect of their own
beneficial holdings, representing approximately 30% in aggregate of
the issued share capital of the Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLFFFLDSIELIA
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