Yoomedia PLC 29 November 2005 YooMedia plc / Ticker: YOO / Market: AIM / Sector: Media 29th November 2005 YooMedia PLC ("YooMedia" or the "Company") Placing of 42,857,143 new Ordinary Shares Proposed issue of 12,571,429 Warrants and 20,000,000 Director Warrants Proposed Increase in Authorised Share Capital Proposed Amendment to the Articles of Association and Notice of Extraordinary General Meeting Overview: YooMedia plc, the AIM-traded interactive media and games group, has raised £3,000,000 (before expenses) through the issue of 42,857,143 new ordinary shares at 7p per share. The capital raised will be used for working capital and to fund the growth of the Company's core business of developing and delivering premium interactive content and services to households and individuals via TV, the web, telephony and mobile phones. The fundraising was taken up by both existing and new institutional shareholders in the U.K. and the U.S. as well as by Non Executive Director Leo Noe. It is anticipated that the Placing Shares will be admitted to trading on AIM on 2 December 2005. Pursuant to the Placing, participants will, subject to shareholder approval, receive one Warrant for every five Placing Shares subscribed, exercisable at 10p per share for a period of 3 years from the date of the adoption. The Company also proposes to issue 20,000,000 Director Warrants. Additionally the Company is proposing an increase to the authorised share capital, an amendment to the Articles of Association and to convene an Extraordinary General Meeting, details of which are set out in the full document below. YooMedia Chairman, Michael Sinclair, said: "The placing is great news for the company and I am very happy that we have received strong backing from both new and existing institutions. We have made good progress over the last six months developing strong relationships with amongst others blue chip broadcasters and mobile telephone operators. We have an agreement with Cardoza Publishing (www.cardozapub.com), the largest publisher of gaming, gambling and poker books in the world, whose founder, Avery Cardoza, also participated in the placing. This reinforces our relationship and I hope it will lead to us cooperating even more closely in the gaming arena. "With increased capital available I feel the Company is well positioned to take advantage of the growth potential particularly in the digital interactive arena. We are establishing ourselves as the partner of choice for many leading corporates and believe we now have the team, products and infrastructure to generate significant shareholder value." * * ENDS * * Contacts: Neil MacDonald YooMedia plc Tel: 020 7462 0870 Isabel Crossley St Brides Media & Finance Ltd Tel: 020 7242 4477 Full Text: The Company is pleased to announce today that it has raised £3,000,000 (before expenses) by way of the issue of the Placing Shares which have been subscribed by investors, including one of the Directors, subject to Admission. The Placing has been undertaken utilising the Directors' existing share allotment authorities which were granted at the Company's annual general meeting on 25 May 2005. Further to the above, the Company also today announces that it is seeking approval to constitute a Warrant Instrument and a Director Warrant Instrument to issue Warrants and Director Warrants and to authorise the Directors' to both allot Ordinary Shares generally and to allot Ordinary Shares otherwise than on a pre-emptive basis, as the Directors existing allotment authorities will be substantially utilised in effecting the Placing. In addition Shareholder approval will also be sought at the EGM to increase the authorised share capital of the Company and to amend the Articles by increasing the Company's borrowing limits. Once this amendment has been approved, the Directors intend for the Company to refinance its existing overdraft facilities of £4,000,000 with its bankers, Lloyds TSB Bank plc. The Directors have sent a circular today to Shareholders containing a Notice of the EGM, which will convene an EGM to be held at 10.00 a.m. on 23 December 2005 to approve the matters set out above. 1. The Placing and related Warrants The Directors have examined a range of suitable fundraising options available to the Company given its current stage of development and particularly in light of the previously announced delay in the re-negotiation of the William Hill contract, which will result in improved commercial terms and conditions for the Company. After careful consideration of all these fundraising options, the Directors believe that the issue of the Placing Shares is in the best interests of Shareholders as a whole. The allotment and issue of the Placing Shares is not conditional on the passing of the Resolutions and is only conditional on Admission. The net proceeds of the Placing (excluding VAT) are estimated at £2,962,500 and the Directors intend for such net proceeds to be utilised for the Group's working capital purposes. Leo Noe, a director of the Company, has, inter alia, agreed to participate in the Placing, having conditionally agreed to subscribe for 7,142,857 Placing Shares, increasing his total holding to 23,242,285 Ordinary Shares representing 4.5 per cent of the Enlarged Issued Share Capital. In addition, under the terms of the Placing it has been agreed that investors who have subscribed for the Placing Shares will also receive 1 Warrant for every 5 Placing Shares so subscribed. Each Warrant entitles the holder to subscribe for one new Ordinary Share at a subscription price of 10p per Ordinary Share exercisable for a period of 3 years from the date of the adoption of the Warrant Instrument. Under the terms of the Placing it is therefore intended that 8,571,429 Warrants will be granted to those investors who have subscribed for the Placing Shares. The grant of the 8,571,429 Warrants pursuant to the Placing is subject to the approval of Shareholders at the EGM, as set out in further detail below. No application will be made for any of the Warrants to be admitted to trading on AIM. Application has been made for the Placing Shares to be admitted to trading on AIM and it is anticipated that trading in the Placing Shares will commence on AIM on 2 December 2005. The Placing Shares will, once issued, rank pari passu with the existing Ordinary Shares. 2. Refinancing, Amendment to the Articles and Increase in Authorised Share Capital Subject to the amendment to the Articles which is proposed at the EGM, the Company intends to enter into refinancing facilities with Lloyds TSB Bank plc in the form of a new £4,000,000 overdraft facility. The Company's existing £2,000,000 term loan remains in place. In addition the Directors also wish to have an ability to borrow further monies should it be considered necessary although there is no intention to do so in the next three months. At present the Company is unable to borrow further monies under the Articles and it is therefore proposed that the borrowing limits contained in the Articles be amended to allow for borrowings of up to £25,000,000. The effect of the amendment will be that the Company will have the authority to borrow up to the greater of £25,000,000 and three times its adjusted capital and reserves. The Company has agreed with Lloyds TSB Bank plc, as part of the proposed arrangements regarding the refinancing of part of the Company's facilities, to grant Lloyds TSB Bank plc warrants in respect of 4,000,000 new Ordinary Shares. The grant of the 4,000,000 Warrants to Lloyds TSB Bank plc is also subject to the approval of Shareholders at the EGM. It is also proposed that the authorised share capital of the Company be increased by £2,000,000 by the creation of 200,000,000 new Ordinary Shares. Authority for such increase will be sought by the proposal of Resolution 1 at the EGM. 3. The Director Warrants As the Company announced on 16 June 2005, of the Company's existing £6,000,000 facilities with Lloyds TSB Bank Plc the first £3,000,000 has for the past few months been personally guaranteed by Dr Michael Sinclair. Following the proposed refinancing described above and completion of the Placing Dr Michael Sinclair will still be required to give such ongoing guarantee until such time as Lloyds TSB Bank plc decides it is no longer required. Accordingly, the Board (save for Dr Michael Sinclair) has agreed with Dr Michael Sinclair that in return for him agreeing to continue giving this personal guarantee he will be granted warrants having an aggregate subscription value equal to £3,000,000. It is therefore proposed, subject to the approval of Shareholders at the EGM, to grant warrants to Dr Michael Sinclair in respect of 20,000,000 new Ordinary Shares at a subscription price of 15 pence per new Ordinary Share. Each Director Warrant entitles Dr Michael Sinclair to subscribe for one new Ordinary Share at a subscription price of 15p per Ordinary Share exercisable for a period of 3 years from the date of the adoption of the Director Warrant Instrument. The constitution of the Director Warrant Instrument and the grant of the Director Warrants is subject to the approval of Shareholders at the EGM. No application will be made for the Director Warrants to be admitted to trading on AIM. 4. The Extraordinary General Meeting A circular has been sent to shareholder today containing a notice convening a Extraordinary General Meeting of the Company to be held at Northumberland House, 155-157 Great Portland Street, London W1W 6QP on 23 December 2005 at 10.00 a.m. At this meeting resolutions will be proposed as follows: Resolution 1 - An ordinary resolution to increase the authorised share capital of the Company. Resolution 2 -An ordinary resolution to constitute the Warrant Instrument. Resolution 3 - An ordinary resolution to constitute the Director Warrant Instrument. Resolution 4 - An ordinary resolution to renew the authorities of the Directors to allot further new Ordinary Shares in accordance with Section 80 of the Act, such power being limited to the allotment of relevant securities pursuant to the Warrants and otherwise up to an aggregate nominal amount of £1,313,124. Resolution 5 - An ordinary resolution, conditional upon the passing of Resolution 3, to authorise the Directors to allot further new Ordinary Shares in accordance with section 80 of the Act, such power being limited to the allotment of relevant securities pursuant to the Director Warrants. Resolution 6 - A special resolution, conditional upon the passing of Resolution 4, to grant the Directors authority to issue or allot further new Ordinary Shares pursuant to Section 95 of the Act as if Section 89(1) of the Act did not apply to such issue or allotments, such power being limited to the allotment of relevant securities pursuant to the Warrants, in connection with rights issues and other similar issues and otherwise up to an aggregate nominal amount of £445,000. Resolution 7 - A special resolution, conditional upon the passing of Resolution 5, to grant the Directors authority to issue or allot further new Ordinary Shares pursuant to Section 95 of the Act as if Section 89(1) of the Act did not apply to such issue or allotments, such power being limited to the allotment of relevant securities pursuant to the Director Warrants. Resolution 8 - A special resolution to amend the articles of association of the Company so as to increase the borrowing limits of the Company. Shareholders should note that the Placing is not conditional on approval at the Extraordinary General Meeting and is only conditional on Admission. 5. Irrevocable undertakings The Company has received irrevocable undertakings to vote, or to procure the votes of Ordinary Shares held, in favour of all of the Resolutions from 19.21 per cent. of the existing issued share capital Shareholders. 6. Recommendations Dr Michael Sinclair is interested in the business to be conducted at the EGM as he will receive the Director Warrants. Accordingly he has taken no part in the deliberation by the Board with regard to the issue of the Director Warrants. The Independent Directors, having consulted with Evolution Securities Limited, consider the terms of and the proposed grant of the Director Warrants to Dr Michael Sinclair to be fair and reasonable as regards Shareholders as a whole. The Independent Directors believe that the Proposals are in the best interests of the Company and its Shareholders as a whole and recommend Shareholders vote in favour of all of the Resolutions. The Directors believe that the Proposals (save for the grant of the Director Warrants to Dr Michael Sinclair) are in the best interests of the Company and its Shareholders as a whole and recommend you to vote in favour of all of the Resolutions. The Directors have irrevocably undertaken to vote in favour of all of the Resolutions in respect of their own shareholdings amounting in aggregate to 71,925,220 Ordinary Shares, representing approximately 15.23 per cent. of the Existing Issued Share Capital. Expected timetable of principal events Admission of the Placing Shares to AIM 8.00 a.m. on 2 December 2005 Latest time and date for receipt of Forms of Proxy 10.00 a.m. on 21 December 2005 Extraordinary General Meeting 10.00 a.m. on 23 December 2005 Placing Statistics Placing Price 7p Number of Placing Shares 42,857,143 Placing Shares as a percentage of the existing 9.07% ordinary share capital Market capitalisation on Admission at the Placing £36,059,605 (inc Placing Shares) Price per share Terms used in this announcement shall have the same meaning as in the circular sent to Shareholders dated 29 November 2005. This information is provided by RNS The company news service from the London Stock Exchange