TIDMADE
RNS Number : 5481D
ADDleisure PLC
03 December 2009
ADDleisure Plc / Epic: ADE.L / Index: AIM / Sector: Leisure
3 December 2009
ADDleisure Plc ('ADDleisure' or 'the Company')
Placing to Raise GBP1.2 million, Capital Reorganisation, Proposed Change of Name
to Fitbug Holdings plc and Notice of General Meeting
ADDleisure Plc, the AIM traded company formed to develop products and services
in the health and wellness sector, has conditionally raised GBP1.2 million
(before expenses) by way of a placing by Seymour Pierce Limited of 12,000,000
new ordinary shares of 1 pence each in the Company ('the Placing Shares'), with
new and existing shareholders at a price of 10 pence per Placing Share ('the
Placing Price') ('the Placing'). The funds raised will be used to ensure the
full potential of the Company's wholly owned subsidiary, Fitbug Limited
('Fitbug'), is achieved.
A Circular is being posted to Shareholders today regarding the Placing and in
addition the following proposed corporate activities:
* Loan capitalisation
* Subdivision, consolidation, and cancellation of share capital
* Amendments to the articles and memorandum of association of the Company
* Grant of options
* Change of name to Fitbug Holdings Plc
ADDleisure Chairman, Allan Fisher said, "I am delighted that we have raised
these funds and that investors have recognised the enormous potential of our
exciting key offering, Fitbug, an online personal health and fitness coach.
Bringing new technology into any marketplace is a process marked with
challenges, but I truly believe that we have the right team to push Fitbug to
its full potential and meet these challenges. Not only is Fitbug consolidating
its already strong position in the UK where it works with blue-chip clients
including PruHealth, Nectar and various Primary Care Trusts, it is also
expanding its reach internationally where it has an excellent pipeline of new
business opportunities, which we hope to update Shareholders on in the near
future."
For further information visit www.addleisure.com or contact:
+---------------------------+----------------------------+------------------+
| Andrew Brummer | ADDleisure Plc | Tel: 020 7449 |
| | | 1000 |
+---------------------------+----------------------------+------------------+
| Mark Percy | Seymour Pierce | Tel: 020 7107 |
| | | 8000 |
+---------------------------+----------------------------+------------------+
| Catherine Leftley | Seymour Pierce | Tel: 020 7107 |
| | | 8000 |
+---------------------------+----------------------------+------------------+
| Isabel Crossley | St Brides Media & Finance | Tel: 020 7236 |
| | Ltd | 1177 |
+---------------------------+----------------------------+------------------+
| Paul Youens | St Brides Media & Finance | Tel: 020 7236 |
| | Ltd | 1177 |
+---------------------------+----------------------------+------------------+
Full Details
1. Introduction
On 25 September 2009, the Company requested that trading of its shares on AIM be
suspended in order for the Company to consider the position of its part-owned
subsidiary, Ez-Runner Limited, and to consider the funding requirements of the
Group. The Company is pleased to announce the conditional placing of 12,000,000
new ordinary shares of 1 pence each ("New Ordinary Shares") raising gross funds
of GBP1,200,000 (of which certain of the Directors, being Allan Fisher, David
Turner and Paul Landau, together with Pantheon Leisure Plc ('Pantheon') have
agreed to subscribe GBP325,000 in the Placing). In addition it has been agreed
that certain Shareholders will capitalise GBP500,000 of loans owed to them by
the Company into New Ordinary Shares, at the Placing Price per share. In
addition, the Company wishes to undertake the Capital Reorganisation and Capital
Cancellation in order to strengthen its balance sheet and to enable the Company
to concentrate its future resources on the development of Fitbug. To reflect
better the Company's business it is also proposed that the Company change its
name to Fitbug Holdings Plc.
Following the announcement of the Placing and the Company's unaudited results
for the six months ended 30 June 2009 earlier today, the Company has requested
that trading in the Ordinary Shares resumes on AIM from 2:00 p.m. today. If the
resolutions to be proposed at the General Meeting of the Company ('the
Resolutions') to be held at 10.00 a.m. on 21 December 2009 are passed, it is
anticipated that dealings in the New Ordinary Shares will commence on 22
December 2009.
Accordingly, the Directors have convened the General Meeting at which
Shareholders will consider, and if thought fit, approve, inter alia, the Capital
Reorganisation and Capital Cancellation, the allotment of the Placing Shares and
the Loan Capitalisation Shares, the granting of further allotment authorities,
the removal of the statement of the authorised share capital of the Company as
contained in both the articles of association ('the Articles') and the Company's
memorandum of association and certain consequential amendments to be made to the
Articles and the change of name of the Company. The GM will be held at 10.00
a.m. on 21 December 2009.
2. The Placing
The Company is proposing to raise GBP1,200,000 (before expenses) pursuant to the
Placing by the allotment and issue of 12,000,000 Placing Shares at the Placing
Price per share. Allan Fisher, David Turner, Paul Landau and Pantheon are
subscribing in aggregate 3,250,000 of the Placing Shares. The Directors have
examined a number of suitable fund-raising opportunities for the Company and
believe that the Placing is the most suitable opportunity available to the
Company and that the Placing is in the best interests of the Shareholders as a
whole.
Advance clearance has been received from HMRC that the Placing Shares are
capable of forming a qualifying holding for a Venture Capital Trust and for the
purposes of EIS. Further details as regards VCT and EIS reliefs are set out
below.
The Placing Shares being placed pursuant to the Placing will represent 31.6 per
cent. of the Enlarged Share Capital. On admission of the New Ordinary Shares to
trading on AIM ('Admission'), at the Placing Price, the Company will have a
market capitalisation of approximately GBP3.8 million. The Placing Shares will
rank pari passu with the New Ordinary Shares including the right to all
dividends and other distributions, paid or made after the date of issue.
The Board intends to use the proceeds of the Placing to:
* provide finance to Fitbug to enable it to repay all of the loan facility of
GBP300,000 which was advanced to Fitbug by Allan Fisher, David Turner and
Pantheon on 6 October 2009 (as amended on 27 November 22009) ('the Facility'),
all of which (being GBP300,000) Allan Fisher, David Turner and Pantheon will
then use to subscribe in aggregate 3,000,000 of the Placing Shares in the
Placing;
* provide working capital for the Group; and
* meet the costs of the Placing, the Capital Reorganisation and the Capital
Cancellation.
Authority for the Directors to allot the Placing Shares will be sought by the
proposal of Resolutions 5 and 6 at the GM.
Under AIM Rule 13 the participation in the Placing by Allan Fisher and David
Turner (who are each subscribing 1,000,000 of the Placing Shares) (as they are
Directors of the Company) are related party transactions. In addition, under AIM
Rule 13, the participation in the Placing by Pantheon (which is subscribing
1,000,000 of the Placing Shares) (as it is a substantial shareholder within the
meaning of the AIM Rules) is also a related party transaction.
Andrew Brummer and Paul Landau consider, having consulted with Seymour Pierce,
that the terms of that transaction (being those Directors' participation in the
Placing, as well as Pantheon's participation in the Placing) are fair and
reasonable in so far as the Shareholders are concerned.
3. Loan Capitalisation
Under the terms of the Loan Agreement, the Company currently owes BUPA and two
of the Company's Directors, Allan Fisher and David Turner, the aggregate amount
of GBP1,000,000. BUPA, Allan Fisher and David Turner have agreed for certain of
the amounts owing to them to be satisfied through the allotment and issue of the
Loan Capitalisation Shares. It is proposed that the following outstanding
amounts due under the terms of the Loan Agreement be satisfied by the allotment
and issue of the Loan Capitalisation Shares (credited as fully paid at the
Placing Price per share):
+------------------------+------------------------+------------------------+
| Name | Amount to be | No of Loan |
| | capitalised | Capitalisation Shares |
+------------------------+------------------------+------------------------+
| BUPA | GBP300,000 | 3,000,000 |
+------------------------+------------------------+------------------------+
| Allan Fisher | GBP100,000 | 1,000,000 |
+------------------------+------------------------+------------------------+
| David Turner | GBP100,000 | 1,000,000 |
+------------------------+------------------------+------------------------+
The balance of monies due under the terms of the Loan Agreement, which in
respect only of the Company's repayment obligations to BUPA is secured by way of
a debenture granted by the Company and Fitbug, will remain payable by the
Company in accordance with the terms of the Loan Agreement, such balance of
GBP500,000 being due for repayment by the Company on 1 April 2012.
Authority for the Directors to allot and issue the Loan Capitalisation Shares
will be sought by the proposal of Resolutions 5 and 6 at the GM.
Under AIM Rule 13 the arrangements concerning Allan Fisher and David Turner (as
they are Directors of the Company) and the allotment and issue to them of their
proportionate number of Loan Capitalisation Shares are related party
transactions. In addition, under AIM Rule 13 the arrangements concerning BUPA
(as it is a substantial shareholder within the meaning of the AIM Rules) and the
allotment and issue to it of its proportionate number of Loan Capitalisation
Shares is also a related party transaction.
Andrew Brummer, Paul Landau and Geoffrey Simmonds, being the only directors of
the Company not party to the Loan Capitalisation, consider, having consulted
with Seymour Pierce, that the terms of the Loan Capitalisation and the allotment
and issue of the Loan Capitalisation Shares are fair and reasonable in so far as
the Shareholders are concerned.
4. Re-focus of the Company's Activities
The Company's sole focus is now Fitbug, having restructured its business during
2009 with the objective of rationalising the Group's structure and in order to
concentrate on its key value and revenue drivers. In April 2009, this
restructuring process saw Movers & Shapers Limited go into administration, along
with its parent company ADDWellness Holdings Limited, which was a 50 per cent.
subsidiary of ADDleisure. In October 2009, the Company's 50.2 per cent. owned
subsidiary Ez-Runner also entered into administration.
Fitbug offers online personal health and well-being services by combining
interactive tracking devices and web technology to measure activity and health
indicators, provide feedback and motivate the user towards a healthier
lifestyle. It is mainly focussed on the corporate wellness and health insurance
sectors, with increasing effort being placed on the public health arena. Its
blue-chip client base includes Nectar, PruHealth, BUPA, various Primary Care
Trusts and Holmes Place Group. Fitbug also sells its products directly to
individual consumers through its website, fitbug.com, as well as other retailers
including Amazon and WH Smith.
The Board believes that Fitbug has strong potential to derive value for the
Company's shareholders in the medium term. A trading update on Fitbug is
provided within the Chairman's Statement announced today, outlining recent
agreements and indicating its strong pipeline of new business opportunities both
in the UK and internationally. In particular, Fitbug is in advanced negotiations
with a major US insurance company which could see Fitbug generate significant
revenues which would materially impact the Group's financial performance in 2010
and onwards. Whilst the Directors are confident that these negotiations can be
successfully concluded in the near term, there can be no guarantee that any such
contract will be signed.
In order to satisfy the immediate short term cash requirements of the Group,
prior to completion of the Placing, Allan Fisher, David Turner and Pantheon made
the Facility available to Fitbug. The Facility was intended to be a short term
bridging loan of GBP300,000 and is due to be repaid on completion of the
Placing.
The Facility is being provided interest free, subject to the amount of the
Facility being repaid on or before 31 January 2010. If the Facility is not
repaid by 31 January 2010 interest thereafter accrues at the rate equal to LIBOR
plus 5 per cent. per annum. After 31 January 2010, the Facility becomes
repayable on demand.
The bridging finance provided by Allan Fisher and David Turner, both directors
of the Company, and Pantheon (a substantial shareholder of the Company within
the meaning of the AIM Rules) under the terms of the Facility was a related
party transaction. As detailed further below, it is proposed that Allan Fisher,
David Turner and Pantheon be granted certain options over New Ordinary Shares in
recognition of the funding provided to the Company under the terms of the
Facility Agreement.
5. Capital Reorganisation
The Board is proposing to undertake a reorganisation of the capital structure of
the Company. Currently the Company has one class of shares, being the Ordinary
Shares. The number of Ordinary Shares currently in issue is 209,871,949. In
order to consolidate the number of shares in issue and to allow the Proposals to
proceed at an appropriate pricing, it is proposed to carry out the following
Capital Reorganisation.
Subdivision
The Directors propose to subdivide each issued Ordinary Share into 1 Subdivided
Ordinary Share of 0.1p and 1 Deferred Share of 0.4p. The rights attaching to the
Deferred Shares are set out in detail below. The authority for the Company to
undertake the Subdivision is contained in Resolution 1, which will be proposed
as an ordinary resolution.
Consolidation
Following the Subdivision, it is proposed that every 10 Subdivided Ordinary
Shares be consolidated into one New Ordinary Share of 1 pence. The authority for
the Company to undertake the Consolidation is contained in Resolution 1, which
will be proposed as an ordinary resolution.
A CREST Shareholder will have their CREST accounts credited with their New
Ordinary Shares following their admission to AIM, which is expected to be 22
December 2009. Certificated Shareholders will be issued with new share
certificates which will be despatched by 31 December 2009 and upon receipt
certificates in respect of Ordinary Shares will become invalid and should be
destroyed.
Effect of the Capital Reorganisation
Following the Capital Reorganisation, it is proposed that resulting fractions of
New Ordinary Shares will, in accordance with the Articles, be consolidated into
whole numbers of New Ordinary Shares and sold for the best price reasonably
obtainable and the net proceeds of sale distributed in due proportion to the
holders of the fractional entitlements. Cash payments of less than GBP3.00 will
not be distributed to any individual holders of the fractional entitlements and
will be retained for the benefit of the Company. It is not anticipated that any
individual cash payments of greater than GBP3.00 will arise as a result of the
Capital Reorganisation.
The Subdivision and Consolidation above would result in a then issued share
capital of 20,987,194 New Ordinary Shares of 1 pence each and 209,871,949
Deferred Shares of 0.4 pence each, subject to any adjustments which may arise as
a result of dealing with fractional entitlements.
It is proposed that the issued Deferred Shares be cancelled as detailed further
below. Shares to be issued under existing options will reflect the Capital
Reorganisation.
Rights attaching to the New Ordinary Shares
The rights attaching to the New Ordinary Shares shall be identical to the rights
attaching to the Ordinary Shares.
Rights attaching to the Deferred Shares
The rights attaching to the Deferred Shares will be as follows:
* income - the right as a class to receive 0.1p for each GBP999.999 of dividends
or other distributions resolved to be distributed out of the profits of the
Company available for distribution, the same to be distributed amongst the
holders of the Deferred Shares in proportion to the amounts paid up or credited
as paid up thereon;
* as regards capital - in the event of the winding up of the Company or other
return of capital, the Deferred Shares shall confer upon the holders thereof as
a class the right to receive 0.1p for each GBP999.999 of the assets of the
Company available for distribution amongst the members, the same to be
distributed amongst the holders of the Deferred Shares in proportion to the
amounts paid up or credited as paid up thereon;
* as regards voting - the Deferred Shares shall not at any time confer on the
holders thereof any right to attend or vote at any general meeting of the
Company or to receive notices thereof.
Cancellation of Deferred Shares
It is proposed as part of the Capital Cancellation that the 209,871,949 Deferred
Shares arising on the Capital Reorganisation be cancelled, further details of
which are set out below. No share certificates will be issued in respect of the
Deferred Shares.
6. Capital Cancellation
As at 30 June 2009, the Company had an accumulated deficit on its unaudited
profit and loss account of GBP5,985,299 and accordingly was, and currently
remains, unable to pay dividends. The deficit on the profit and loss account
also prevents the Company from purchasing its own shares. If no action is taken
the Company will only be in a position to pay dividends or purchase its own
shares after the deficit on its profit and loss account has been eliminated by
profits in excess of the deficit.
The Act allows a company to reduce its share premium account and to separately
reduce its share capital if it is permitted to do so by its Articles. A company,
having obtained the approval of its shareholders to a cancellation of its share
premium account and to a reduction of its share capital by the passing of
special resolutions at a general meeting, would then be able to effect such
cancellations once they have been confirmed by the High Court and registered at
Companies House. Accordingly, subject to the approval of the Shareholders at the
GM and the approval of the High Court, it is intended to implement the Capital
Cancellation.
The Capital Cancellation will comprise:
* the cancellation of the amount standing to the credit of the share premium
account of the Company as at 30 June 2009, being the sum of GBP4,749,006;
* the cancellation of the amount standing to the credit of the share premium
account of the Company as a result of the allotment and issue, on Admission, of
the Placing Shares and the Loan Capitalisation Shares, each at the Placing Price
per share, being the aggregate sum of GBP1,530,000; and
* the cancellation of the 209,871,949 Deferred Shares which will have been created
as a result of the Capital Reorganisation, which will result in a reduction of
capital of GBP839,487.80,
which will result in the creation of a new reserve of GBP7,118,493.80 against
which the Company expects to then credit its profit and loss account, subject to
any undertakings given to the High Court for the purpose of protecting the
Company's creditors at the date of the Capital Cancellation.
Prior to approving the proposed Capital Cancellation, the High Court will need
to be satisfied that the interests of the Company's creditors are not adversely
affected. The Company will put into place such form of creditor protection as
the High Court shall require. Authority for the Capital Cancellation will be
sought by the proposal of Resolutions 7 and 8 at the GM. The Directors of the
Company reserve the right to abandon or discontinue any application to the High
Court if they believe that the terms required to obtain confirmation are
unsatisfactory to the Company. Once the Capital Cancellation has been completed
and any undertakings given to the High Court have also been satisfied, the
Company, once it has an accumulated surplus on its profit and loss account,
would then be in a position to pay dividends thereafter.
The Capital Cancellation does not affect the voting or dividend rights of
Shareholders.
7. Authorised Share Capital
Resolution 2, to be proposed at the General Meeting, which will be proposed as a
special resolution, will be to amend the Articles to remove the statement of the
authorised share capital of the Company and any related references thereto
within the Articles. The Act abolishes the requirement for a company to have an
authorised share capital and these amendments will reflect this. The Directors
will still be limited as to the number of shares they can at any time issue
because allotment authority continues to be required under the Act, save in
respect of employee share schemes. Resolution 3, to be proposed at the General
Meeting, which will be proposed as an ordinary resolution, will be to amend the
Company's memorandum of association, being deemed to form part of the Articles,
to delete the statement of the authorised share capital of the Company in
paragraph 6 thereof.
8. Change of Name of the Company
It is proposed as part of the refocusing of the Company that the Company change
its name to Fitbug Holdings Plc.
9. Changes to the Board
Andrew Brummer (aged 37) trained as a Chartered Accountant with Arram Berlyn
Gardner before moving on to finance positions with Media Audits, a media
effectiveness consultancy which is now part of Accenture, and Czarnikow Group, a
leading provider of world sugar market services. He joined ADDleisure early in
2009 as finance director designate and financial controller before joining the
Board as Finance Director in October 2009.
Paul Landau, Managing Director of Fitbug, joined the Board as a director on 2
December 2009. Paul (aged 35) previously worked with Accenture as a management
consultant working with a portfolio of clients on technology and strategy
projects. He left in 2001 to distribute an early fitness tracking solution to
the gym sector, before founding Fitbug in 2004.
10. Grant of options
It is proposed that, on Admission, the following options over New Ordinary
Shares be granted in recognition of the bridging finance provided to Fitbug
under the terms of the Facility, at the Placing Price per share:
+------------------------------------+------------------------------------+
| Name | No. of New Ordinary Shares under |
| | option |
+------------------------------------+------------------------------------+
| Pantheon Leisure Plc | 100,000 |
+------------------------------------+------------------------------------+
| Allan Fisher | 100,000 |
+------------------------------------+------------------------------------+
| David Turner | 100,000 |
+------------------------------------+------------------------------------+
All of the above options are exercisable by the relevant option holder at any
time from the date of grant for a period of three years thereafter.
Authority for the Directors to grant the options will be sought by the proposal
of Resolutions 5 and 6 at the GM. Under AIM Rule 13 the arrangements concerning
Allan Fisher and David Turner (as Directors of the Company) and Pantheon (as a
substantial shareholder under the AIM Rules) and the grant of the Options are
related party transactions.
Andrew Brummer and Paul Landau, being the only directors of the Company not
party to the Options, consider, having consulted with Seymour Pierce, that the
terms of the options affecting Allan Fisher, David Turner and Pantheon are fair
and reasonable in so far as the Shareholders are concerned.
Paul Landau currently has various share options which have been granted to him
in respect of an aggregate of 8,261,389 Ordinary Shares.
It is proposed that on Admission, Paul Landau will surrender all of his current
share options in respect of 8,261,389 Ordinary Shares and that he will be
granted a new option in respect of 1,000,000 New Ordinary Shares under the terms
of the EMI Scheme. This option will be exercisable from the second anniversary
of the date of grant for a period of eight years thereafter, at the Placing
Price per share.
In addition it is proposed that on Admission an employee of the Group be granted
a new option in respect of 15,000 New Ordinary Shares under the terms of the EMI
Scheme and that such employee will also surrender their current share options in
respect of 150,000 Ordinary Shares. This new option will be exercisable from the
second anniversary of the date of grant for a period of eight years thereafter,
at the Placing Price per share.
Under AIM Rule 13 the arrangements concerning Paul Landau and the grant of the
Landau Option is a related party transaction.
Geoffrey Simmonds, David Turner, Allan Fisher and Andrew Brummer consider,
having consulted with Seymour Pierce, that the terms of the Landau Option are
fair and reasonable in so far as the Shareholders are concerned.
11. Admission
Application will be made to the London Stock Exchange for the Enlarged Share
Capital to be admitted to trading on AIM. It is expected that Admission will
become effective and dealings in the Enlarged Share Capital will commence on 22
December 2009.
The Articles permit the Company to issue shares in uncertificated form. CREST is
a computerised paperless share transfer and settlement system which allows
shares and other securities, including depository interests, to be held in
electronic rather than paper form. Application has been made for the New
Ordinary Shares in issue at Admission to be admitted to CREST. Accordingly,
settlement of transactions in the New Ordinary Shares following Admission may
take place within CREST if relevant Shareholders so wish.
CREST is a voluntary system and Shareholders who wish to retain certificates are
permitted to do so.
Share certificates in respect of the Placing Shares and the Loan Capitalisation
Shares will reflect the Capital Reorganisation. Share certificates for Ordinary
Shares will remain valid until the record date for the Capital Reorganisation
with certificates for the New Ordinary Shares expected to be dispatched by the
Company's registrars no later than 31 December 2009. The Placing Shares and the
Loan Capitalisation Shares and the New Ordinary Shares due to uncertificated
holders will be delivered in CREST on 22 December 2009.
Upon receipt of new share certificates for the New Ordinary Shares, certificates
in respect of Ordinary Shares will become invalid and should be destroyed.
12. Irrevocable undertakings
The Company has received an irrevocable undertaking to vote in favour of the
Resolutions from Pantheon Leisure Plc, which has a beneficial interest in
22,540,000 Ordinary Shares representing approximately 10.7 per cent. of the
Issued Share Capital.
David Turner, Geoffrey Simmonds and Allan Fisher have also undertaken to vote in
favour of the Resolutions in respect of their aggregate beneficial holdings of
44,566,567 Ordinary Shares representing approximately 21.2 per cent. of the
Issued Share Capital.
BUPA has also undertaken to vote in favour of the Resolutions in respect of its
beneficial holding of 60,600,000 Ordinary Shares representing approximately 28.8
per cent. of the Issued Share Capital.
In aggregate, irrevocable undertakings to vote in favour of the Resolutions have
been received by the Company in respect of 127,706,567 Ordinary Shares
representing approximately 60.8 per cent. of the Issued Share Capital.
13. Tax reliefs
13.1 Venture Capital Trusts
This scheme applies to individual investors (not companies). Investment is made
in a VCT company (a quoted company approved as a VCT by HMRC), which then
invests into other qualifying companies. There are three forms of relief
applying to investment in a VCT.
a. Income Tax Relief
Relief from income tax at the rate of 30 per cent. of the investment limited to
the total amount of income tax payable by an individual investor in a VCT for
the tax year in which the investment is made. Maximum annual investment is
GBP200,000.
b. CGT Disposal Relief
Gains on the disposal of ordinary shares in a VCT are not chargeable to CGT and
losses on such a disposal are not allowable provided the VCT qualified as such
at the time of acquisition and disposal; the disposal is by an individual aged
18 or over at the time of disposal; and the value of all VCT shares acquired
during a tax year by the taxpayer does not exceed GBP400,000 (GBP200,000 until
2005-06).
c. Distribution Relief
Exemption from income tax on dividends in respect of ordinary shares in a VCT to
the extent that the shares acquired each year do not exceed the maximum annual
investment limit for income tax purposes shown above.
Advance assurance has been obtained from HMRC that shares in the Company qualify
as VCT investments.
13.2 Enterprise Investment Scheme (EIS)
This scheme applies to direct subscriptions for shares in the Company made by
individuals.
a. Income Tax Relief
Relief from income tax at the rate of 20 per cent. of the investment, limited to
the total amount of income tax payable by an individual investor for the tax
year in which the investment is made. Maximum investment is GBP500,000 from 6
April 2008.
b. CGT Disposal Relief
No CGT is chargeable on a disposal of shares, which qualified for income tax
relief provided that they are held for a period of three years from subscription
(three years from the commencement of the Company's trade if later).
c. CGT Deferral Relief
A charge to capital gains tax on another disposal can be deferred by reinvesting
the proceeds in shares of an EIS company within 12 months previous to and three
years following that disposal. The gain becomes chargeable when the EIS shares
are disposed of.
Advance assurance has been obtained from HMRC that the Company will be
authorised to issue certificates to investors under EIS to enable investors to
claim EIS relief.
13.3 General
Each of the above two schemes has very detailed qualification requirements,
which must be satisfied over an extended period of time. Application has been
made to HMRC that the Group's business qualifies for EIS relief and that the
Group's trade is such that its shares will constitute a "qualifying holding" for
VCTs. Final confirmation that the Group' qualifies for both EIS relief and VCT
relief cannot be obtained from HMRC until the Placing Shares have been issued.
Therefore the Company cannot provide any warranty or guarantee that the Placing
Shares will qualify for EIS relief or that they will constitute a "qualifying
holding" for VCT purposes. Potential investors are advised to seek their own
advice from their own tax advisers as to whether such reliefs are available to
them and as to the conditions to be satisfied.
14. The General Meeting
A notice convening the General Meeting of the Company is to be held at the
offices of Finers Stephens Innocent LLP at 180 Great Portland Street, London W1W
5QZ on 21 December 2009 at 10.00 a.m. The Resolutions that will be proposed are
included in the circular which has been sent to Shareholders today. Where the
context requires, terms and definitions used in this announcement shall have the
same meaning as set out in the Company's circular to shareholders dated 3
December 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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