Placing to raise £3 million & Notice of GM

Placing

Forbidden Technologies plc (AIM: FBT), the AIM-quoted market-leading cloud video platform owner, is pleased to announce a placing to raise GBP3 million (before expenses) through the issue of 30,000,000 new ordinary shares of 0.8 pence each (the “Placing Shares”) at a price of 10 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, GBP2,247,575 is conditional, inter alia, on the approval of shareholders at a general meeting of the Company to be held on 28 December 2016 (the “GM” or “General Meeting”) of a resolution to provide authority to the Directors to issue and allot 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 GBP2.81 million, will be used to finance further sales, sales support, sales implementation and product development support where necessary and to support working capital through to profitability and cash generation.

A circular (the “Circular”), containing information in relation to the Placing and convening the General Meeting, is expected to be sent to shareholders today. The information contained below has been extracted from, and should be read in conjunction with, the Circular. The Circular will also be posted on the Company’s website: www.forbidden.co.uk in due course.

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

“We are building an increasingly strong pipeline of opportunities and the funds raised will help support our sales ambitions. This is an exciting time for the Company and the Board is committed to ensuring growth continues and is optimised as we look to move towards profitability and cash generation.”

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 Ison
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 with multiple applications which can be used by rights holders, broadcasters, sports and news video specialists, post-production houses, other mass market digital video channels, corporates and consumers. The platform applications help customers improve their time to market on time sensitive content, and efficiently exploit the full value of their content.

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 STATISTICS

Number of Existing Ordinary Shares 150,486,199
Placing Price per Placing Share 10 pence
Number of First Placing Shares 7,524,250
Number of Second Placing Shares 22,475,750
Total number of Placing Shares being
placed on behalf of the Company 30,000,000
Enlarged Share Capital immediately following
the Placing and Admission 180,486,199
Number of Placing Shares as a percentage 16.62 per
of the Enlarged Share Capital cent.
Estimated net proceeds receivable GBP2.81 million
by the Company

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Latest time and date for receipt 10:00 a.m. on 26
of completed Forms of Proxy December 2016
Admission and commencement of
dealings in the First Placing 08:00 a.m. on 6
Shares December 2016
General Meeting 10:00 a.m. on 28
December 2016
Admission and commencement of
dealings in the Second Placing 08:00 a.m. on 29
Shares December 2016

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

“Act” the Companies Act 2006 (as amended);
“Admission” First Admission and/or Second Admission
(as the context requires);
“AIM” the market of that name operated
by the London Stock Exchange;
“AIM Rules” the AIM Rules for Companies and (where
the context admits) the AIM Rules
for Nominated Advisers (each as amended
from time to time);
“Allenby Capital” Allenby Capital Limited, a private
limited company incorporated in England
& Wales under registered number 6706681
and having its registered office
at 3 St Helen’s Place, London, EC3A
6AB, the Company’s nominated adviser
and broker for the purposes of the
Placing and Admission;
“Board” or “Directors” the directors of the Company as at
the date of this document, whose
names are set out on page 4 of this
document;
“Company” or Forbidden Technologies plc, a public
“Forbidden” limited company incorporated in England
& Wales under registered number 03507286
and having its registered office
at Tuition House, 27-37 St. George’s
Road, Wimbledon, London, SW19 4EU;
“CREST” the computerised settlement system
(as defined in the CREST Regulations)
operated by Euroclear UK & Ireland
Limited which facilitates the transfer
of title to shares in uncertificated
form;
“CREST Regulations” the Uncertificated Securities Regulations
2001 (SI 2001/3755) including any
enactment or subordinate legislation
which amends or supersedes those
regulations and any applicable rules
made under those regulations or any
such enactment or subordinate legislation
for the time being in force;
“Enlarged Share the number of Ordinary Shares in
Capital” issue immediately following the Placing
and Admission;
“Existing Ordinary the 150,486,199 Ordinary Shares of
Shares” 0.8 pence each in the capital of
the Company in issue at the date
of this document;
“First Admission” admission of the First Placing Shares
to trading on AIM becoming effective
in accordance with Rule 6 of the
AIM Rules;
“First Placing the 7,524,250 new Ordinary Shares
Shares” which are to be placed in accordance
with the Placing Agreement without
being conditional on the passing
of the Resolution;
“Form of Proxy” the form of proxy enclosed with this
document for use by Shareholders
in connection with the General Meeting;
“General Meeting” the general meeting of the Company
or “GM” convened for 10:00 a.m. on 28 December
2016, notice of which is set out
on page 12 of this document;
“London Stock the London Stock Exchange Group plc;
Exchange”
“Notice of GM” the notice convening the GM, which
is set out on page 12 of this document;
“Options” options over Ordinary Shares in the
Company;
“Ordinary Shares” the ordinary shares of 0.8 pence
each in the capital of the Company
in issue from time to time;
“Placees” subscribers for Placing Shares pursuant
to the Placing;
“Placing” the conditional placing of the Placing
Shares by Allenby Capital as broker
for the Company at the Placing Price
pursuant to the Placing Agreement;
“Placing Agreement” the conditional agreement dated 30
November 2016 between the Company
and Allenby Capital relating to the
Placing;
“Placing Price” 10 pence per Placing Share;
“Placing Shares” the 30,000,000 new Ordinary Shares
to be issued pursuant to the Placing
which have been conditionally placed
by Allenby Capital, comprising the
First Placing Shares and the Second
Placing Shares;
“Resolution” the resolution set out in the Notice
of GM;
“Second Admission” admission of the Second Placing Shares
to trading on AIM becoming effective
in accordance with Rule 6 of the
AIM Rules;
“Second Placing the 22,475,750 new Ordinary Shares
Shares” which are to be placed in accordance
with the Placing Agreement conditionally
(inter alia) on the passing of the
Resolution at the GM;
“Shareholders” holders of Ordinary Shares and the
term “Shareholder” shall be construed
accordingly;
“United Kingdom” the United Kingdom of Great Britain
or “UK” and Northern Ireland; and
“GBP” and “pence” pounds and pence sterling respectively,
being the lawful currency of the
United Kingdom.

LETTER FROM THE CHAIRMAN

FORBIDDEN TECHNOLOGIES PLC

(Incorporated and registered in England and Wales under the Companies Act 1985, with registered number 03507286)

Directors: Registered Office:
David Main (Chairman) Tuition House
Aziz Musa (Chief Executive Officer) 27-37 St. George’s
Jonathan Lees (Chief Financial Road
Officer) Wimbledon
Stephen Streater (Research and London
Development Director) SW19 4EU
Jim Irving (Non-Executive Director)
Andrew Bentley (Non-Executive
Director)

1 December 2016

Dear Shareholder (and, for information only, holders of Options)

Placing and Notice of General Meeting

1. Introduction
The Company announced earlier today a proposed placing to raise GBP3 million (before expenses) through the issue of 30,000,000 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 Shareholders’ statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares.

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 believes that the Placing will promote the growth and success of the Company for the benefit of the Shareholders as a whole, and seeks Shareholder approval to the passing of the Resolution at the General Meeting of the Company.

This document also contains the Directors’ recommendation that Shareholders vote in favour of the Resolution. Notice of the General Meeting, at which the Resolution will be proposed, is set out at the end of this document. A Form of Proxy is also enclosed with this document for use at the GM.

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 64,551,428 Ordinary Shares and represent approximately 43 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
The Company operates in the large and growing cloud video market. With its platform of cloud video applications and its relationships, including those with Amazon Web Services and Microsoft Azure, Forbidden is well positioned in this market. The Company’s focus is on helping customers unlock the value of their content by reducing the time to market from camera to screen, and increasing the ease and efficiency of using content in multiple ways.

On 6 September 2016, the Company announced its interim results for the six months ended 30 June 2016. As highlighted, the Company raised GBP1.2 million (net) in an institutional fundraise announced in May 2016 which provided the Company with liquid funds of GBP1.8 million at 30 June 2016. The Company is beginning to see the benefits of the leaner cost structure that it implemented in May 2016, accruing a cost saving of approximately GBP1 million on an annualised basis. Additionally, the Company grew its sales force and increased invoiced sales to GBP445,000, reflecting a 25 per cent. growth compared to the equivalent period in the previous year. The Company’s invoiced sales growth follows the relatively flat invoiced sales amounts for each of the four previous six month periods which ranged between GBP342,000 and GBP355,000.

Aligned with the Company’s increased financial performance have been some operational changes. Significantly, Aziz Musa, the Company’s CEO, has been directly leading the larger sales team. Under his leadership, the sales and marketing team have implemented a new sales and marketing process. With this new process and a focus on selling against the revenue benefits of our applications, the Company is seeing a material growth in our sales pipeline.

In this second half of the year, there continues to be commercial traction in sports video solutions and overall in the US market, including, as announced on 1 August 2016, a partnership with an iconic sports, music and entertainment venue in New York. The eva and Captevate applications are now included as part of the Forscene platform and, where appropriate, are part of our proposals to potential clients. In addition, the 12 month proof of concept, with a UK broadcaster and global US technology company, is well underway.

The sales growth generated in the first six months is continuing which means we will be successful in delivering invoiced sales growth this year whilst also realising approximately GBP0.5 million in cost savings (both operational and capital expenditure) over 2015. The Company had a cash balance of GBP1.2 million as at 31 October 2016. The sales growth momentum is expected to continue into 2017.

It is against this growth momentum that the Company is raising additional funds to ensure that the Company has adequate capital to finance further sales, sales support, sales implementation and product development support where necessary. Management is committed to ensuring that the Company’s growth continues, and is optimised, whilst also targeting profitability in 2018.

3. Details of the Placing and use of proceeds
The Placing is expected to raise a total of GBP3 million before expenses. The net proceeds of the Placing, which will be approximately GBP2.81 million, will be used to increase the Company’s sales and sales support capabilities, effectively resource larger contracts with new customer implementation capabilities, respond more rapidly to additional revenue related product development requirements and strengthen the Company’s balance sheet for larger strategic sales.

Under the Placing, the Company has conditionally raised GBP3 million (before expenses) through a placing of 30,000,000 Ordinary Shares at 10p 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 16.62 per cent. of the Enlarged Share Capital. The Placing Price represents a discount of approximately 11 per cent. to the closing mid-market price on AIM of 11.25 pence per Existing Ordinary Share on 30 November 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 of the Placing, to raise a total of GBP752,425 by the issue of 7,524,250 Ordinary Shares (being the First Placing Shares) at 10p 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 6 December 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 GBP2,247,575 by the issue of 22,475,750 Ordinary Shares (being the Second Placing Shares) at 10p 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 29 December 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 occurring.

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 29 December 2016 (or such later time and/or date as the Company and Allenby Capital may agree, not being later than 8.00 a.m. on 31 January 2017). 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 relevant day of Admission and that share certificates (where applicable) will be despatched within 5 working days of Admission.

4. 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 6 December 2016 and that admission will become effective and dealings in the Second Placing Shares will commence at 08:00 a.m. on 29 December 2016.

5. 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 28 December 2016 is set out at the end of this document. At the General Meeting, Shareholders will consider a resolution, to be passed as a special resolution, to disapply Shareholders’ statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares.

6. Action to be taken
Shareholders will find accompanying this document a Form of Proxy for use at the General Meeting. Whether or not Shareholders intend to be present at the GM, they are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed on it 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 26 December 2016. Completion and return of the Form of Proxy will not affect Shareholders’ rights to attend and vote in person at the General Meeting if they so wish. Further information regarding the appointment of proxies can be found in the notes to the Notice of GM.

Shareholders who hold their Ordinary Shares in uncertificated form and receive this document and the accompanying Form of Proxy through their broker or other intermediary, 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.

7. 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.

8. 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 that Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as they intend to do in respect of their aggregate holding of 64,551,428 Existing Ordinary Shares (representing approximately 43 per cent. of the Company’s existing share capital).

Yours sincerely

David Main

Chairman