TIDMBIDS
RNS Number : 1449O
Bidstack Group PLC
29 September 2023
Certain information contained within this Announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in
the United Kingdom. Upon publication of this Announcement, this
information is now considered to be in the public domain.
29 September 2023
Bidstack Group Plc
("Bidstack" or the "Company" or the "Group")
Proposed New Commercial Partnership
Bidstack Group Plc (AIM: BIDS), the in-game brand activation
platform announces that it has entered into non-binding heads of
terms in respect of a proposed commercial partnership with Virtual
Sport Technology Limited ("VST"), a sports marketing agency, for a
multi-year licensing agreement ("the Heads"). The definitive
agreement following from the Heads ("the Agreement"), subject to
contract, would be intended to accelerate Bidstack's positioning as
a technology provider with marketing and sales being outsourced to
specialist suppliers. The Company expects to sign the Agreement as
soon as practicable; at which point a further announcement will be
made.
Proposed multi-year licensing agreement with VST
Sports leagues and teams have long been identified as enterprise
customers of Bidstack's platform. Until now, Bidstack and its
competitors have been unable to monetise sports games within a
fully licensed virtual stadium or track due to restrictions from
official sponsors. By placing control of brand activations in the
hands of relevant leagues and teams, these virtual stadiums or
tracks become available to the owners of their real life
counterparts. Bidstack would act purely as the technology provider,
empowering sports teams and leagues to reach fans within their
virtual stadiums or tracks with a level of targeting and
flexibility that has not been possible before.
The main provisions of the Heads agreed with VST are as
follows:
-- Bidstack would provide VST worldwide third party exclusivity
to provide access to Bidstack's proprietary video game content
management platform to rights-holders including sports leagues,
teams and publishers for an initial term of three years with a
further three year extension mutually available;
-- VST would pay Bidstack a licence fee of GBP1.5m (two equal
instalments of GBP0.75m paid quarterly in advance);
-- Bidstack would provide certain support services to VST in
consideration of a quarterly service fee of GBP45,000; and
-- Bidstack would capture upside of the growth potential through
retaining a revenue share of 70 per cent.
As part of these arrangements, certain Bidstack employees would
transfer their employment to VST with the consequent cost saving to
Bidstack.
About VST
VST is a newly incorporated company formed to operate as a
technology and media reseller to rights holders, principally in the
sports sector.
Related party transaction
The Agreement will be a related party transaction for the
Company because James Draper (Founder/CEO) and Lisa Hau (CSO) of
Bidstack are shareholders and non-executive directors of VST. In
addition, Donald Stewart (who incorporated VST and through Kepstorn
Solicitors has acted for it) and who stepped down from the Bidstack
board on 21 July 2023 is also a director and minority shareholder
of VST.
Prior to finalisation, the Agreement will therefore be reviewed
and approved by the Independent Directors, who have extensive
experience in dealing with gaming and advertising licensing
agreements, having consulted with SPARK Advisory Partners Limited,
the Company's nominated adviser in compliance with AIM Rule 13. As
the Agreement remains subject to contract, there can be no
guarantee that the terms of the Agreement will be approved.
Dr. David Reeves, Chairman of Bidstack said
"Over the past several months, the Board and the Management team
have diligently examined numerous possible financing options with
the primary aim of securing the necessary capital to address the
Company's immediate and mid-term funding requirements. After an
extensive search for the best route to access capital by the Group,
the Independent Directors believe this proposed agreement, albeit a
related party transaction, represents the best value for
shareholders at this present time.
"The Board also believes that this proposed commercial agreement
builds on the inherent strengths of Bidstack's technology platform
and provides greater certainty of continued financial
viability."
James Draper, CEO said
"Over the last few months it has become clear that Bidstack's
technology is of great interest to a number of potential commercial
partners. The announcement on the 13 July 2023, in which we
announced our partnership with the Washington Commanders and the
NFL's officially licensed VR game 'NFL Pro Era', has seen the
sports side of the business gain traction across a number of sports
leagues and teams. We have grown from having a one team, two games,
one sport technology pilot, to a league-wide initiative.
"This momentum, which we expected could have taken years to
attain, has surprised all of us positively. As a result, we took
the decision to outsource our contracted network of titles to
Venatus, who we know well and trust.
"Exploring both the sports and licensing use cases for our
technology (outside of our advertising network), has created great
interest from a number of sports-focused investors.
"As we have explored routes to funding and taking our technology
to market, it's become clear to the Board that we must be creative
in ensuring the best interests of Bidstack's shareholders, staff
and other stakeholders are preserved.
"However, the interest in investing into Bidstack, as a public
company, has proved challenging due to the global economic
headwinds and volatile equity markets and the Company's share
price. All deals we have explored would have been detrimental to
shareholder value.
"This has led myself and Lisa Hau to take the decision to set up
a net-new private company VST.
We have set up this new venture and approached the Independent
Directors of Bidstack with an offer for VST to represent the sports
side of the Bidstack business. VST will be the sales house
representing and selling Bidstack's technology to the sports
industry.
"Being a private company, VST has been able to attract
longer-term strategic and patient capital.
"The commercial terms of the Heads have been reviewed and
approved by Independent Directors, but remain subject to contract.
I am delighted that we can propose this deal, which protects
shareholder value for existing Bidstack shareholders and enables
Bidstack to continue to explore the multiple technology use-cases
we are discussing currently.
"This reinforces, the Board's belief that Bidstack is the most
innovative middleware technology in brand and fan engagement,
within the video game sector."
-ENDS-
Contacts
Bidstack Group Plc
James Draper, CEO via SPARK
SPARK Advisory Partners Limited (Nomad)
Mark Brady / Neil Baldwin / James Keeshan +44 (0) 203 368 3550
Stifel Nicolaus Europe Limited (Broker)
Fred Walsh / Tom Marsh +44 (0) 20 7710 7600
Notes to editors
About Bidstack
Bidstack's technology empowers video game publishers to monetise
and manage spaces within their virtual environments. Its platform
provides real-time reporting, dynamic targeting and player
communication tools for brand activations and fan engagement.
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END
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