Placing, Notice of GM, AGM & Board Changes

Placing

Forbidden Technologies plc (AIM: FBT), the AIM-quoted owner and developer of Forscene (the market-leading cloud video platform), Captevate (the consumer video editor), and eva (the video social network), is pleased to announce a placing to raise GBP1.3 million (before expenses) through the issue of 18,571,421 new ordinary shares of 0.8 pence each (the “Placing Shares”) at a price of 7 pence per Placing Share (the “Placing”) in two tranches.

The Placing was conducted by Allenby Capital Limited (“Allenby Capital”) and the Placing Shares have been placed with institutional and other investors, including existing shareholders. Of the funds raised, GBP923,800 is conditional, inter alia, on the approval of shareholders at a general meeting of the Company to be held on 6 June 2016 (the “GM”) of a resolution to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a pre-emptive basis, further details of which are set out below.

The net proceeds of the Placing, which will be approximately GBP1.2 million, will be used to advance the growth of the global professional sales infrastructure for Forscene, to advance the marketing and growth of Captevate and eva, to capitalise on some immediate strategic revenue opportunities and to support working capital through to profitability and cash generation.

Following completion of the Placing the Company will be focusing its attention on making sales of its existing products and services and will be investing in its sales infrastructure. At the same time the Company will be undertaking a focused cost reduction exercise in other areas of the business.

A circular (the “Circular”), containing information in relation to the Placing and convening the General Meeting and the Annual General Meeting, is expected to be sent to shareholders today. The Circular will be available on the Company’s website at www.forbidden.co.uk in due course.

The Company will also be posting its Report and Accounts, for the year ended 31 December 2015 to shareholders today. The Report and Accounts are available on the Company’s website at www.forbidden.co.uk.

Annual General Meeting

The Company’s 2016 Annual General Meeting will be held immediately after the GM, on 6 June 2016.

Board changes

The Company recently announced the following changes to its Board. David Main, previously senior non-executive director, became the Company’s non-executive Chairman. Stephen Streater, the Company’s founder and current Executive Chairman, has become an executive director responsible for the Company’s research and development activities.

Commenting on the placing, Aziz Musa, CEO of Forbidden Technologies plc said:

“We are delighted to raise these funds which will be used to drive our sales growth. As part of this process we are rebalancing our cost base towards our sales infrastructure and have made some board changes. I am very grateful to Stephen for his work as Chairman and am excited to be working with him as he leads our Research and Development activities.

We are grateful that David Main, an experienced executive and investor in the technology sector, has agreed to become our Chairman. His track record in high growth technology start ups, as well as extensive company director experience, both public and private, will be invaluable as we drive sales growth. I look forward to working with both.

We continue to see traction in our business. In the last two weeks we have announced deals with a major broadcaster, global sporting events and a leading US technology company. We are in discussions with a number of large multinational companies, including a global e-commerce company, and I look forward to updating shareholders in the coming months”

Enquiries

Forbidden Technologies plc
David Main, Chairman
Aziz Musa, Chief Executive
Tel: +44 (0)20 8879 7245
Allenby Capital Limited (Nominated Adviser and Broker)
Nick Naylor
John Depasquale
Richard Short
Katrina Perez
Tel: +44 (0)20 3328 5656

Redleaf Communications (Financial PR Adviser)
Rebecca Sanders-Hewett
David Ion
Susie Hudson
Tel: +44 (0)20 7382 4730
Email: forbidden@redleafpr.com

About Forbidden Technologies plc

Forbidden Technologies plc (AIM: FBT, www.forbidden.co.uk) floated in February 2000.

The Company develops and markets a powerful cloud video platform, which is used by broadcasters, in professional web video, in education and by consumers. The Company platform is one of the world’s most advanced browser-based and mobile platforms, which underpins Forscene in professional markets, its eva video social network and its new consumer video editor, Captevate.

Websites
www.forbidden.co.uk
www.forscene.com
www.eva.co
www.captevate.com

Social media
www.facebook.com/FORscene
www.plus.google.com/+Forscenepro/posts
www.linkedin.com/company/forscene
www.twitter.com/forscenepro
www.youtube.com/user/ForsceneTraining

Placing, Notice of General Meeting and Notice of Annual General Meeting

1. Introduction
The Company announced earlier today a proposed placing to raise GBP1.3 million (before expenses) through the issue of 18,571,421 new Ordinary Shares at the Placing Price per new Ordinary Share in two tranches: the First Placing Shares and the Second Placing Shares.

The allotment of the Second Placing Shares is conditional, inter alia, upon the Company obtaining approval of Shareholders at the General Meeting to disapply statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares. Immediately following the General Meeting the Company will also hold its 2016 Annual General Meeting at which the Directors’ annual allotment authority and limited disapplication of statutory pre-emption rights will also be considered for renewal.

The purpose of this document is, amongst other things, to explain the background to and reasons for the Placing and to explain why the Board considers the Placing will promote the growth and success of the Company for the benefit of the Shareholders as a whole, and seek Shareholder approval to both the passing of the Resolution at the General Meeting and the passing of the AGM Resolutions at the Annual General Meeting.

This document also contains the Directors’ recommendation that Shareholders vote in favour of the Resolution and the AGM Resolutions. Notices of the General Meeting, at which the Resolution will be proposed, and of the Annual General Meeting, at which the AGM Resolutions will be proposed, are set out at the end of this document. Forms of Proxy are also enclosed with this document for use at the GM and the AGM respectively.

The placing of the Second Placing Shares is conditional, inter alia, upon Shareholders passing the Resolution at the General Meeting. The Directors intend to vote in favour of the Resolution in respect of their own beneficial holdings in the Company which amount, in aggregate, to 62,980,000 Ordinary Shares and represent approximately 47.7 per cent. of the Company’s Existing Ordinary Shares.

The Directors believe that the Placing is the most appropriate way to raise additional funds for Forbidden. The Directors consider that the Placing provides greater certainty than other available means of raising additional funds in a timely fashion and minimises transactional costs.

2. Background to and reasons for the Placing
On 8 March 2016, the Company announced its preliminary results for the year ended 31 December 2015. As at 31 December 2015, the Company was debt free with cash balances of in excess of GBP1.6 million. During 2015, the Company enjoyed continued growth in its deferred revenue pipeline, including from commercial agreements with IMG Media and deltatre, as well as increased gross sales for the year of GBP708,717 (2014: GBP689,222). In addition, Forbidden had undertaken a significant reorganisation to focus clearly on the commercial development of the business, strengthen the executive team and launch eva, the Company’s video social network channel and solution. Post year-end, the Company continues to sign important commercial agreements, including more recently with Microsoft Azure.

Furthermore, as announced on 4 May 2016, the Company has, in collaboration with a global US technology leader, agreed a paid for 12-month Forscene proof of concept with a major UK broadcaster. The US technology leader is a major supplier of non-linear editing software. A successful application of a combined workflow could provide the Company with good future sales potential.

The Company has generated significant momentum in the past 6 months with this stronger sales focus. The Company’s platform of products provides access to a significant global addressable market. The Company’s sales activities are focused on customers that have the potential to provide recurring revenue opportunities. The Board believes that the net proceeds from the Placing will provide the Company with the ability to drive higher revenue growth, as well as providing funds for the working capital requirements of the Company.

Following completion of the Placing, Forbidden will be undertaking a streamlining of the rest of the organization to reduce the cost base without affecting the Company’s intensified sales focus.

3. Details of the Placing and use of proceeds
The Placing is expected to raise a total of GBP1.3 million before expenses. The net proceeds of the Placing, which will be approximately GBP1.2 million, will be used to advance the growth of the global professional sales infrastructure for Forscene, to advance the marketing and growth of Captevate and eva, to capitalise on some immediate strategic revenue opportunities and to support working capital through to profitability and cash generation.

Under the Placing, the Company has conditionally raised GBP1.3 million (before expenses) through a placing of 18,571,421 Placing Shares at 7p per share with institutional and other investors. The Company has entered into a Placing Agreement with Allenby Capital under which Allenby Capital has agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Placing Price. The Placing has not been underwritten.

The Placing Shares will represent approximately 12.34 per cent. of the Enlarged Share Capital. The Placing Price represents a discount of approximately 25.33 per cent. to the closing mid-market price on AIM of 9.375 pence per Existing Ordinary Share on 6 May 2016, being the last dealing day prior to publication of this document.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches.

The first tranche to raise a total of GBP376,200 by the issue of 5,374,283 Placing Shares (being the First Placing Shares) at 7p each has been carried out within the Company’s existing share allotment authorities. Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on 12 May 2016. The allotment of the First Placing Shares is conditional, inter alia, upon First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission.

The second tranche of the Placing, to raise a total GBP923,800 by the issue of 13,197,138 Placing Shares (being the Second Placing Shares) at 7p each, is conditional upon, inter alia, the passing of the resolution to be put to shareholders of the Company at the General Meeting (granting the Directors authority to issue and allot new ordinary shares otherwise than on a pre-emptive basis). In addition, the allotment of the Second Placing Shares is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to Second Admission. It is expected that Second Admission will take place on 7 June 2016.

The Placing Agreement contains, inter alia, customary undertakings and warranties given by the Company in favour of Allenby Capital as to the accuracy of information contained in this document and other matters relating to the Company. Allenby Capital may terminate the Placing Agreement in specified circumstances prior to Admission, including, inter alia, for material breach of the Placing Agreement or any other warranties contained in it and in the event of certain force majeure events.

The Placing Agreement is conditional so far as concerns the Second Placing upon, inter alia, Second Admission occurring by not later than 8.00 a.m. on 7 June 2016 (or such later time and/or date as the Company and Allenby may agree, not being later than 8.00 a.m. on 30 June 2016). If such condition is not satisfied or, if applicable, waived, the Second Placing will not proceed.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared on or after the date on which they are issued.

It is expected that CREST accounts will be credited on the day of Admission and that share certificates (where applicable) will be despatched within 5 working days of Admission.

4. Related Party Transaction
The following Directors have agreed to subscribe for First Placing Shares as part of the first tranche of the Placing:

At the date of Following the
this document Placing and Admission
—————————- —————————-
Director Number Percentage Number Percentage
of Ordinary of Existing of Ordinary of Enlarged
Shares Ordinary Shares Share
held Shares held Capital
Stephen Streater 62,700,000 47.53% 63,985,714 42.52%
David Main 250,000 0.19% 535,714 0.36%

As Directors of the Company, Stephen Streater and David Main are each to be treated as a ‘related party’ in accordance with the AIM Rules. Accordingly, the participation of Stephen Streater and David Main in the Placing is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The Independent Directors of the Company, having consulted with Allenby Capital, the Company’s nominated adviser, consider the terms of the Placing to be fair and reasonable insofar as Shareholders are concerned.

5. Application for Admission to AIM
Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is anticipated that such admission will become effective and that dealings in the First Placing Shares will commence at 08:00 a.m. on 12 May 2016 and that dealings in the Second Placing Shares will commence at 08:00 a.m. on 7 June 2016.

6. General Meeting
The notice convening the General Meeting to be held at Tuition House, 27-37 St. George’s Road, Wimbledon, London SW19 4EU at 10.00 a.m. on 6 June 2016 is set out at the end of this document. At the General Meeting shareholders will consider the Resolution which will be proposed as a Special Resolution to disapply statutory pre-emption rights in relation to the allotment of the Second Placing Shares.

7. Annual General Meeting
The notice convening the Annual General Meeting to be held at Tuition House, 27-37 St. George’s Road, Wimbledon, London SW19 4EU at 10.15 a.m. on 6 June 2016 is set out at the end of this document. At the AGM shareholders will consider the following resolutions, of which Resolutions 1 to 8 (inclusive) will be proposed as Ordinary Resolutions and Resolution 9 will be proposed as a Special Resolution:

Ordinary Resolutions

Resolution 1

Resolution 1 proposes that the Company’s annual accounts for the year ended 31 December 2015 together with the Directors’ Report and Auditor’s Report on these accounts be received, considered and adopted.

Resolution 2

Resolution 2 proposes that KingstonSmith LLP be re-appointed as auditors of the Company from the conclusion of the Annual General Meeting until the conclusion of the next general meeting at which accounts are laid before the Company and authorises the Directors to determine their remuneration.

Resolutions 3 to 6

Resolutions 3 to 6 proposes the re-appointment of the following directors, each of whom was appointed a director by resolution of the Board after last year’s annual general meeting and, in accordance with article 113 of the Company’s articles of association, his appointment terminates at this year’s AGM at which he is eligible for re-appointment:

Resolution Director Whose brief biographical details
can be viewed at:
3 Aziz Musa http://www.forbidden.co.uk/company/board/#Aziz-Musa
4 Jason Cowan http://www.forbidden.co.uk/company/board/#Jason-Cowan
5 Andrew Bentley http://www.forbidden.co.uk/company/board/#Andrew-Bentley
6 Jim Irving http://www.forbidden.co.uk/company/board/#Jim-Irving

Resolution 7

Resolution 7 proposes the re-appointment of Stephen Streater as a director. Stephen is retiring by rotation in accordance with article 118 of the Company’s articles of association and, being eligible, is offering himself for re-election. Brief biographical details of Stephen can be viewed at:

http://www.forbidden.co.uk/company/board/#Stephen-Streater.

Resolution 8

Resolution 8 renews the authority of the Directors to allot shares in the capital of the Company (or to grant rights to subscribe for or convert any securities into shares in the capital of the Company) up to a maximum nominal amount of GBP544,681 (representing the Company’s unissued share capital as at today’s date and, in line with current Guidelines of The Investment Association, less than two-thirds of the Company’s current issued share capital). This authority will expire 18 months after the passing of the resolution or, if earlier, at the conclusion of the next annual general meeting of the Company to be held after the passing of the resolution.

Special Resolution

Resolution 9

Resolution 9 renews the disapplication of pre-emption rights in relation to (a) the allotment of shares pursuant to the grant of options to subscribe, and the allotment of, shares pursuant to the Company’s share option schemes and (b) otherwise than pursuant to (a), up to a nominal value of GBP60,194 (representing 5% of the Company’s Enlarged Share Capital assuming that the Resolution and the Placing Shares are allotted and issued). This authority will expire 18 months after the passing of the resolution or, if earlier, at the conclusion of the next annual general meeting of the Company to be held after the passing of the resolution.

8. Action to be taken
Shareholders will find accompanying this document a Form of Proxy (WHITE) for use at the General Meeting and a Form of Proxy (BLUE) for use at the AGM. Whether or not Shareholders intend to be present at the GM or AGM, they are requested to complete, sign and return the Forms of Proxy in accordance with the instructions printed on each to the Company’s registrars, Capita Asset Services, as soon as possible and, in any event, so as to arrive no later than 10:00 a.m. on 4 June 2016. Completion and return of a Form of Proxy will not affect Shareholders’ right to attend and vote in person at the General Meeting or the AGM if they so wish. Further information regarding the appointment of proxies can be found in the notes to the Notice of GM and Notice to AGM.

In the case of Shareholders who hold their Ordinary Shares in uncertificated form and receive these materials through their broker or other intermediary, the Shareholder should complete and send a letter of direction in accordance with the instructions provided by their broker or other intermediary. Many brokers provide a form and opportunity to submit voting instructions online.

9. Documents Available
Copies of this document will be available to the public, free of charge, at the Company’s registered office and at the offices of Allenby Capital, 3 St Helen’s Place, London, EC3A 6AB, during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for one month from the date of this document. This document will also be available on the Company’s website, www.forbidden.co.uk.

10. Recommendation
The Board considers the Placing to be in the best interests of the Company and its Shareholders as a whole and therefore the Directors unanimously recommend the Shareholders vote in favour of:

— the Resolution to be proposed at the General Meeting, and

— the AGM Resolutions to be proposed at the AGM,

as they intend to do in respect of their, in aggregate 62,980,000 Existing Ordinary Shares (representing approximately 47.7 per cent. of the Company’s existing share capital).

Yours sincerely

David Main

Chairman