NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

15 May 2023

WANdisco plc

(the "Company" and together with its subsidiary undertakings, "WANdisco" or the "Group")

Exploring Funding Options

WANdisco (LSE: WAND), the data activation platform, announces that the Board is considering a range of funding options as it works towards the resumption of trading in the Company's shares on AIM. Having reviewed the various options, the Board believes the most appropriate strategy is to launch an equity fundraise towards the end of June of $30 million (the "Proposed Fundraise") to build balance sheet strength in order for the Company to take advantage of the significant opportunities ahead. The Company will commence a consultative process with investors to assess the potential for the Proposed Fundraise, balancing all the different priorities and risks.

The resumption of trading in the Company's shares on AIM will occur as soon as practicable, following careful consideration by the Board and in discussion with AIM Regulation.  In any case, this will be after the completion of the Proposed Fundraise. A further announcement will be made as appropriate.

Working capital review

As of 30 April 2023, the Company had a net cash balance of $8.1 million with no debt facilities. The Board believes this provides the Company with sufficient working capital until the middle of July 2023.

The Board has undertaken a reorganisation and review process that has indicated the need for difficult but necessary changes to WANdisco's size to position it for growth and success.  The Company has announced a reduction of its global headcount by approximately 30% and reduced the Group's annualised cost base from $41 million to circa $25 million. These actions are across all areas of the Company's operational and geographic footprint.

Taking into account these actions to right-size the cost base, and also a balanced assessment of the opportunity pipeline, the Board has prepared updated forecasts and cash flow projections to assess the Group's funding requirement to deliver on its strategy towards profitable growth and ensure it targets a going concern opinion in its 2022 audited accounts.

The Board believes that a fundraising of $30 million will allow the Company to begin to take advantage of the opportunities ahead and give sufficient capital to continue as a going concern.  The Proposed Fundraise will also give the Company a more robust balance sheet which will give it the necessary financial flexibility to provide all stakeholders and potential customers with confidence. In this assessment, the Board has also taken into account the cost of the necessary independent investigation and related processes that have needed to take place as a result of recent events.

Whilst continuing to assess all viable financing options in the best interests of all shareholders, the Board is of the view that the Proposed Fundraise represents, in the limited timescale available, the most realistic prospect for securing the finance required to meet WANdisco's immediate and ongoing working capital requirements to advance the development of its product strategy and to enable WANdisco to progress towards achievement of the critical  cash-flow break even milestone.

Reasons for the Proposed Fundraise

With the appointment of Ken Lever as Interim Chairman, Stephen Kelly as Interim CEO, and Ijoma Maluza as Interim CFO, the Board has commenced a deep transformation recovery program (the "Turnaround Plan"). Alongside cost reductions and working capital improvements, the Board has determined that raising finance is fundamental to the success of the Turnaround Plan given the current cash runway extends only until mid-July 2023. WANdisco's  business growth needs to be underpinned by a resilient balance sheet and the Proposed Fundraise will enable it to build balance sheet strength to take advantage of the significant opportunities available to it.  On announcement of the launch of any fundraise, the Board will provide investors with a further update on its strategic plans and opportunities and the additional steps it will take to balance expenses and set out the Company's path to cash break-even.

Turnaround plan

The Company is developing a programme around WANdisco's product offering and market opportunity with its differentiated technology to underpin a future towards profitable and sustainable growth, which will be the foundation of the Company's value creation strategy.  Within the overall Turnaround Plan are specific interconnected workstreams to cover all important aspects from Sales & Marketing through to the Company's Governance and Control environment. At this early stage, it would be premature to consider timelines against each of the workstreams. Each workstream will have an executive owner reporting to either the Chairman, Ken Lever, or Interim CEO, Stephen Kelly. The programme will encompass the following:

·      go to market structure, selling methodology and sales governance processes driving growing sales pipeline and consistent sales execution - this will include sales, marketing, pipeline creation and partnerships to build the foundations towards consistent sales execution. It is imperative for the Company's long-term success to build a customer focused culture working proactively with some of the world's biggest technology companies as strategic partners. 

·      enhancing the Board and Management to provide world-class leadership for technology, sustainable growth, finance and governance. 

·      investor engagement with improved disclosures and transparency. This will include timely updates for investors between now and lifting of the suspension from AIM and after this time, quarterly updates with meaningful KPI reporting as well as improved financial disclosure.

·      headcount and organisation optimization where WANdisco will focus on its human capital deployed to achieve the milestone of cash flow break-even as the Company progresses towards sustainable profitable growth.

·      market validation where the Company takes a realistic view of the serviceable obtainable market based on product/market fit, competitive differentiation, proof of value, commercial pricing, and branding.

·      excellence in the Company's Governance and Control environment.

Product Strategy

WANdisco's business addresses two separate markets; "Application Lifecycle Management" and "Data Integration":

Application Lifecycle Management ("ALM"): WANdisco enables distributed software development organizations to collaborate more efficiently. By combining WANdisco's patented technology and intelligent load balancing software, application development systems can deliver optimum performance, scalability and availability for teams with a globally-distributed active-active configuration across wide area networks.

Data Integration: WANdisco enables the transfer of arbitrarily large volumes of data with full control and performance, without disruption, to and among cloud storage and cloud analytic platforms. Data transfer is a fundamental requirement for use cases such as application migration and modernisation, continuous availability of new data, disaster recovery, capacity bursting and more. WANdisco's approach minimises the impact and overhead to the environments generating, storing, and using data, allowing it to scale and perform effectively, and reduces the costs and risks of very large-scale data movement needs. It is scalable, high performance, flexible and non-intrusive data transfer technology that can maintain data concurrency for actively used systems.

WANdisco automates the movement of unstructured data to make it available wherever it is needed (from and to on-premises data centres, edge platforms, and the cloud) and does so without disrupting current business operations even as that data is actively changing.

WANdisco also continues to expand and enhance its Data Migrator technology, with support for a broader range of integration with large-scale storage platforms and services, wider availability on cloud service provider marketplaces and strategic partners such as Microsoft, Google, AWS, IBM and Oracle, specific integration with leading cloud-centric data analytic platforms like Databricks and Snowflake, and enhancements for performance, scale, and ease of use to simplify implementation and help eliminate the risks that organizations face in large and complex data transfer requirements.

Market Demand

The Data Migrator technology falls in the "Data Management" market category (excluding database management systems) as defined by Gartner which is forecast to have a total market opportunity of $10.6 billion in 2023. More specifically, the Data Migrator falls within the market for "Data Integration Software", which is one of five subsegments of Data Management and is a more applicable total addressable market ("TAM") for WANDisco's products. The TAM for Data Integration Software tools is $4.4 billion in 2023 with a forecast average annual growth rate of 8.7% through 2027. The TAM for Data Integration Software tools is forecast to be $6.3 billion in 2027.

Shareholder Approval

Having considered various options, the Board believes the Proposed Fundraise is the most appropriate strategy to build balance sheet strength and to take advantage of the Company's significant opportunities ahead.  The Board will continue to review all available and proposed funding options as it prepares for the Proposed Fundraising and reserves the right to change its funding strategy should a more appealing and executable solution become apparent.

Given the quantum of the Proposed Fundraise, and uncertainty of the issue price, it is possible that the Company may not currently have sufficient shareholder authorities to issue the required number of Ordinary Shares to successfully deliver the Proposed Fundraise (the "New Ordinary Shares"), therefore a General Meeting will be required for Shareholders to authorise the allotment of New Ordinary Shares on a non-pre-emptive basis.

The Board strongly believes there are significant benefits in asking for shareholder authority to issue shares for the Proposed Fundraise in advance, rather than following the announcement of the Proposed Fundraise with the admission of the New Ordinary Shares subject to approval. This is because the Board cannot realistically launch the Proposed Fundraise until it is confident that the suspension in the Company's shares will be lifted at the point in time the New Ordinary Shares are issued, or shortly thereafter. Following consultation with AIM Regulation it is the Company's view that the suspension will only be lifted following the publication of the Company's annual report and audited accounts for the year ended 31 December 2022. The Company does not expect that the audit will be completed until the end of June 2023. Thus, launching the Proposed Fundraise followed by a general meeting to approve the allotment of New Ordinary Shares could result in the cash runway ending before the Company receives the net proceeds of the Proposed Fundraise (the "Net Proceeds"). As a result, the Board strongly believes that seeking the requisite shareholder authorities prior to the launch of the Proposed Fundraise greatly increases the probability of a successful completion of the Proposed Fundraise and builds some further contingency into the timetable.

The Board also believes that its preferred strategy provides the following benefits for investors:

·      reduces the time period between investors committing to subscribe for New Ordinary Shares and those shares being admitted to trading on AIM;

·      reduces the time period between investors committing to subscribe for New Ordinary Shares and the lifting of the suspension;

·      reduces conditions precedent following the announcement of the Proposed Fundraise, which the Board believes is particularly valuable given the limited cash runway the Company currently has; and

·      importantly, maximises the chances of success of the Proposed Fundraise.

The Board intends to issue the New Ordinary Shares at a Price (the "Issue Price") that minimises dilution for existing shareholders whilst also ensuring the Company raises sufficient capital. Until the Board engages with investors with further information on the Proposed Fundraise and the Company's strategy going forward, the Board will have no certainty as to the Issue Price per new ordinary share or likely range of outcomes although the intention is to issue shares at a value determined through the accelerated bookbuild process. As such, the Board will need to seek authority for more shares on a non-pre-emptive basis than it will likely need given the Issue Price uncertainty to provide flexibility and the greatest prospect of successful execution.

Use of proceeds

Further details on the use of the Net Proceeds will be announced at the time of launch of the Proposed Fundraise, but in the near term, following completion of the Proposed Fundraise, the Net Proceeds will be used:

·    to underpin marketing, sales and R&D infrastructure and enhance business development to accelerate growth of the sales pipeline, commercial partnerships, and new customer launches;

·    for general working capital purposes providing greater commercial flexibility to WANdisco; and

·    to strengthen the Company's balance sheet to provide confidence for all stakeholders.

In the medium term, the Company plans to:

·      expand the application of the Data Migrator technology to additional sources of large-scale data, including on-premises, cloud and edge storage systems thus increasing the range of markets that Data Migrator can address;

·      provide additional methods for customers to adopt WANdisco's technology, including expansion of the software as a service model employed for the Data Migrator for Azure offering to be suitable across multiple cloud environments and expanding opportunities with other cloud vendors and data platform providers; and,

·      enhance technical capabilities that add value for customers integrating with analytic data platforms and machine learning pipelines that benefit from data catalogues, metadata, and model- management.

Ken Lever, Chairman of WANdisco plc, commented:

"We have been working at pace to deal with the issues the company has faced and create a positive path forward.  A lot has been achieved and I am particularly pleased to now have a world class CEO and CFO in place, who are both energised to see the Company through this difficult period.  Having now been in the business for some six weeks, there is no doubt in my mind that the Company should have a very bright future given its differentiated technology. However, improvements across sales and marketing need to be made to properly take advantage of the opportunity.  To do this, the business needs to be urgently properly capitalised and so today we are announcing our desire to raise $30 million towards the end of June.  Unfortunately, much of this capital requirement is a direct result of the issues that led to our announcement on 9 March.  On completion of the fund raise I believe that the Company can have a bright future".

Enquiries: 

About WANdisco

WANdisco is the data activation platform for accelerating digital transformation at scale. WANdisco makes infinite data actionable across clouds and enterprises in real time. WANdisco customers unleash the business value of the cloud with zero downtime, data loss, or disruption to fuel AI and machine learning, create new services, and transform businesses. For more information about WANdisco, visit: www.wandisco.com

IMPORTANT NOTICES

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

This announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Canada, Australia, Japan or South Africa or any other jurisdiction.

The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any State or any other jurisdiction of the United States. No public offering of the New Ordinary Shares will be made in the United States.

Certain statements contained in this announcement constitute "forward-looking statements" with respect to the financial condition, results of operations and businesses and plans of the Company and WANdisco. Words such as "believes", "anticipates", "estimates", "expects", "intends", "plans", "aims", "potential", "will", "would", "could", "considered", "likely", "estimate" and variations of these words and similar future or conditional expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon future circumstances that have not occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, WANdisco's actual financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. The forward-looking statements contained in this announcement speak only as of its date. The Company, its directors, Stifel Nicolaus Europe Limited ("Stifel") and Liberum Capital Limited ("Liberum"), their respective affiliates and any person acting on its or their behalf each expressly disclaim any obligation or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable law or regulation, the Financial Conduct Authority ("FCA") or London Stock Exchange plc ("LSE").

This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Stifel or Liberum or by any of their respective affiliates or any person acting on its or their behalf as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement does not constitute a recommendation concerning any investor's investment decision with respect to the Company's securities. Any indication in this announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance. This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company's securities. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult their or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.

Each of Stifel and Liberum are authorised and regulated in the United Kingdom by the FCA. Each of Stifel and Liberum are acting exclusively for the Company and no one else in connection with the matters described in this announcement, the contents of this announcement or any other matters described in this announcement. Neither Stifel nor Liberum will regard any other person as its client in relation to the content of this announcement or any matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the  content of this announcement or any other matters referred to in this announcement.

This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom. This announcement has not been approved by the LSE.