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4 May 2021

LIVE COMPANY GROUP PLC

("LVCG", the "Company" or the "Group")

Proposed acquisition and conditional placing

Notice of General Meeting

Total Voting Rights

Live Company Group plc (AIM: LVCG) (the "Company") announces that it has subscribed for a non-controlling stake in Start Art Global Ltd ("Start Art")  an online art and digital art sales and news platform to be funded out of a proposed placing ("Fundraise") (" together the Transaction").

Highlights

·        Subscription for a minority interest 16.3% of issued share capital in Start Art (a Related Party Transaction under the AIM Rules) with an option to increase to 20% based on an agreed valuation formula within the next 6 months ("Acquisition").

·        Start Art is building an online art sales platform with several potential revenue streams including potential for non- fungible tokens ("NFT's")  

·        Start Art will include K-Pop stars as featured artists selling Limited Editions and Art- merchandise

·        Aggregate consideration for the Acquisition is £1,000,000 to be satisfied in cash

·        Placing of new Ordinary Shares of 1p each at a price of 5.0p per share to raise gross proceeds of £1.0 million for the Acquisition and £ 500,000 (gross) for working capital for the existing Brick and Sports business

·        Issue of the previously agreed deferred consideration shares (to a value of £550,000 at a price of 10p per share) post acquision of new sports division LCSE  

·        The Acquisition and the Fundraise are conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at a general meeting of the Company to be held on 21 May 2021 ("GM") 

David Ciclitira, Chairman of LVCG said: "We have spent the past year of  lockdown both restructuring our existing business, launching a new sports and entertainment division and exploring  opportunities in complementary businesses less affected by Covid. Today marks an acquisition in a very exciting space which encompasses both celebrity art and the world of NFTs.

In addition, the last few months have seen a resurgence of opportunities in our existing business which has meant that we will look to recommence our Bricklive build programme to keep up with demand in the UK, USA and China while of course maintaining our strategy of only building when this demand dictates. The raising of additional working capital and introduction of institutional clients into the register will leave the Company in a stronger position. I remain absolutely committed to the Group and excited for the future of our core BrickLive business, recently established sports and entertainment division and this new on-line art investment. "

Start Art

Start Art is a UK private company limited by shares that includes a curated online art-sales platform (due to launch at the end of June, 2021) and an art news service due to before the end of 2021.  

The concept of Start Art was launched by David Ciclitira in 2020 as part of the Global Eye Programme and was given further impetus by the financing, strategic vision and knowledge of the Asian art market by Ranjit Murugason, the deputy chairman of Start Art. Start Art is managed by managing director, Nicola Gross, and supported by Daniel Sumner, chief technology Officer. Prior to the Acquisition David Cicilitira (Chairman of LVCG) owns 75% of the shares in Start Art with the remaining 25% of the shares held by Ranjit Murugason (a non-executive director of LVCG). 12% of the shares is due to be allocated post Transaction from shares held by David Ciclitira to key management personnel including Daniel Sumner, Nicola Gross and members of the Curator team.  

Start Art currently has fifty artists signed up and will soft launch in June, 2021 with "go live" date and revenue generation commencing in from Q3, 2021. It is intended to have 100 artists signed up by the "go live" date.

Start Art will contract with three K-Pop artists with significant social media and fan following to sell their art and limited edition prints on the "go live" date. There will also be a line of merchandise featuring the K-Pop artists' works.  These will be available for sale on the platform from date of launch. (see below under Further Information on Start Art for background to K-Pop)

The injection of cash by the Company into Start  Art provides the capital required for the development of the existing platform, its expansion and to allow for client relationship management ("CRM") integration, live and pre-recorded TV and News, the addition of virtual reality features, a crypto payment gateway (to allow payment of products using virtual currencies) and NFT capabilities as well as other technology-based expansions.

Start Art also intends to help artists mint their own non fungible tokens ("NFTs",a non-fungible token is a unique unit of data stored on a blockchain) working with a third-party system - OpenSea.  Once Start Art has completed the minting process, the NFT will be available to purchase on the platform.  This service is anticipated to be available from Q3 of 2021.

Start Art, which was incorporated in early 2021, (although the concept was developed through 2020) is at the pre-revenue stage and has yet to prepare any accounts. For the purposes of the Subscription, it is warranting as at 31 March 2021 net assets of £1,464,161  including cash of £260,736.

Terms of the Acquisition

The Company has agreed, subject to the passing of the Resolutions at the forthcoming General Meeting, to subscribe for an initial 16.3% of the issued share capital of Start Art at a cost of £1,000,000 with the option to increase its shareholding in the Company to 20% within six months. The Company has also received an undertaking that should Start Art seek additional funds from a third party within 6 months Start Art shall take such steps as may reasonably be required to ensure that the Company's shareholding shall not be diluted below 12%. Additionally, the Company will be party to the Shareholder Agreement which provides standard protections such as pre-emption and "drag and tag" on sale.

The Conditional Placing

To provide funding for the completion of the Acquisition  and additional working capital for the growth of the Group post lock-down, the Company has raised £1.5 million (before expenses) by way of a placing of 30,000,000 new Ordinary Shares of 1p each ("Placing Shares") through Monecor (London) Limited trading as ETX Capital ("Monecor") at a placing price of 5.0p per share (the "Placing Price") (the "Placing"). The Placing Price represents a discount of circa 14.0% to the closing price per Ordinary Share of 5.80p on AIM on 30 April 2021.

The Company has entered into a placing agreement dated 30 April 2021 (the "Placing Agreement") with Monecor pursuant to which they, as agents for the Company, have procured placees for the Placing Shares at the Placing Price.

The obligations of Monecor under the Placing Agreement are conditional, inter alia, upon the approval of shareholders at a GM dated 21 May 2021 and the admission of the Placing Shares having occurred by 8.00 a.m. on 24 May 2021 (or such later time and/or date as may be agreed, being no later than 8.00 a.m. on 24 May 2021), and there being no material breach of the warranties given to prior to admission of the Placing Shares.

Monecor may terminate the Placing Agreement in specified circumstances (including for breach of warranty at any time prior to admission of the Placing Shares, if such breach is reasonably considered by Monecor  to be material in the context of the Placing) and in the event of a force majeure event occurring at any time prior to admission of the Placing Shares.  If the conditions of the Placing Agreement are not fulfilled on or before the relevant date in the Placing Agreement, placing monies will be returned to placees without interest as soon as possible thereafter.  If the Placing Agreement is terminated, the Acquisition will not take place.

Warrants

The Company will issue broker warrants in the Placing, of 5% of the total amount of the Fundraise (the "Broker Warrants").  As a result, 1,500,00 Broker Warrants will be issued to Monecor pursuant to the Placing and subject to approval of the necessary authorities at the Company General Meeting ("GM") which will be scheduled for 21 May 2021 (details of which are to be announced).

Each Warrant will provide the holder the right to one new Ordinary Share on its exercise.  The Warrants will be exercisable at a price of 5.0p for a two-year period from the date of the GM, subject to any extension in accordance with the Warrant instrument.  If exercised in full, the Warrants would result in the issue of a further 1,500,000 new Ordinary Shares.

Related Party Transaction

David Ciclitira is a Director of the Company and a substantial shareholder, together with Maria Serena Papi (Serenella Ciclitira) holding 31.00% of the Company's issued share capital. Ranjit Murugason is also a Director of the Company. Accordingly, they are defined as Related Parties under the AIM Rules for Companies (the "AIM Rules").

The Acquisition of the 16.3% shareholding, in Start Art where David Ciclitira is currently a 75% shareholder and Ranjit Murugason is a 25% shareholder, is therefore classified as a Related Party Transaction pursuant to Rule 13 of the AIM Rules. The Director of the Company, other than David Ciclitira, and Maria Serena  Papi and Ranjit Murugason, being Bryan Lawrie,("Independent Director") considers, having consulted with the Company's Nominated Adviser, Beaumont Cornish Limited, that the terms of the Transaction are fair and reasonable insofar as the Company's Shareholders are concerned.

In forming his view, the Independent Director has taken into account an independent valuation of the interest being acquired by the Company which has indicated a value range in excess of the consideration being paid. He has also taken into account the desirability of adding a further revenue stream to the Company's existing business.

The Independent Director also considered that :

·    the planned exposure to online art sales, news channel, K-Pop artists, merchandising and digital art and shared infrastructure complements the existing business

·    the platform could allow opportunities for the BrickLive division to further market their art-related consumer sets or art linked corporate sales  

In considering these facts and after careful deliberation the Independent Director concluded that the Acquisition is beneficial to the Company and that the consideration being lower than the independent valuation range offers value to Shareholders.

Board Changes

The Company intends to appoint a further Non-executive director by 30 June 2021 and is currently reviewing potential candidates to increase the independence and diversity of the existing board. The Company also intends to conduct a full board review with the intention of making further changes during the latter half of 2021.

David Cicilitira will remain Chairman of the Company and continue to work as per his contract for LVCG. Ranjit Murugason continues as a Non-executive Director with Bryan Lawrie and Serenella Ciclitira the remaining members of the board.

Issue of deferred consideration, Rule 9 and Concert Party

Further to the announcement on 3 December 2020, 5,500,000 new ordinary shares of 1p each being issued as deferred consideration shares ("Deferred Shares") consisting of 2,000,000 for David Ciclitira, 2,000,000 for Bruce Parker-Forsyth and 1,500,000 for Anders Gronburg will be issued at an issue price of 10p at the same time as the Transaction. The Deferred Shares are subject to a 12 month lock in.

As a result of the Transaction and post Admission previously established Concert Party consisting of David Ciclitira (together with Serenella Ciclitira, a non - executive director in the Company ), Bruce Parker-Forsyth and Anders Gronburg will hold 28.13% as set out below:

Issue of Fee Shares

The Company will also issue 500,000 new Ordinary Shares  of 1p each for payment of professional services amounting to £25,000 at the Placing Price ("Fee Shares").

AIM Application and Total Voting Rights

The Placing Shares, Deferred Shares and Fee Shares amounting in aggregate to 36,000,000 new ordinary shares of 1p each ("New Shares")  will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue.

The issuance of the New Shares  is conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at the GM to be held on 21 May 2021 ("the GM") to provide authority to the Directors to issue and allot the required shares on a non-pre-emptive basis. A circular, containing a notice of the GM, will be posted to shareholders shortly. 

Conditional on the passing of the resolutions at the GM, application will be made for the New Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 24 May 2021. ("Admission"). 

Following Admission, the enlarged issued share capital of the Company will comprise 146,001,763 ordinary shares of 1p each ("Ordinary Shares").  Each Ordinary Share has one voting right.  No Ordinary Shares are held in treasury.  The above figure may be used by LVCG shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Post GM approval of the issuance of new shares the directors will have the following interest in the Company.

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Nominated Adviser ("Nomad") to the Company in connection with the matters contained in this announcement, and will not be acting for any other person or otherwise be responsible to any person for providing the protections afforded to clients of Beaumont Cornish or for advising any other person in respect of the matters set out in this announcement or any transaction, matter or arrangement referred to in this announcement. Beaumont Cornish's responsibilities as the Company's Nomad are owed solely to London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his or her decision to acquire any shares in the Company.

A full presentation will be available on www.livecompanygroup.com in due course.

Enquiries:

Live Company Group Plc                                                              Tel: 020 7225 2000

Sarah Ullman, Chief Operating Officer

Beaumont Cornish Limited (Nominated Adviser)                       Tel: 020 7628 3396

Roland Cornish/Rosalind Hill Abrahams                                                                   

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014. as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

LIVE COMPANY GROUP

Live Company Group plc ("LVCG", the "Company" or the "Group") is a live events and entertainment company, founded by David Ciclitira in December 2017.  The Company was admitted to trading on AIM in December 2017, following the reverse acquisition of Brick Live Group and Parallel Live Group by LVCG.

The Group is a network of partner-driven fan-based shows using BRICKLIVE created content worldwide. The Company owns the rights to BRICKLIVE - an interactive experience built around the creative ethos of the world's most popular construction toy bricks.  BRICKLIVE, which is fast becoming a leading children's education and entertainment brand, actively encourages all to learn, build and play, and provides inspirational events and shows where like-minded fans can push the boundaries of their creativity.  Bright Bricks is the Group's production centre for building brick-based models.  The Group is an independent producer of BRICKLIVE and is not associated with the LEGO Group. The Company also manages a number of sports, entertainment and lifestyle events via its recently created LCSE (Live Company Sports and Entertainment) division.

Website: www.livecompanygroup.com.

FURTHER INFORMATION ON START ART

START.art is intended to be a one-stop destination for artists, galleries and collectors worldwide with a unique news function, providing an online e-commerce platform that offers curated works, both physical and digital, for sale by emerging and featured artists from around the world. 

Created by the founder of the Global Eye Programme, START Art  hopes to become one of the world's most followed online art platforms upon launch in June 2021. Several revenue streams and activities are planned including:

-     Online sales of emerging artists including those from the Global Eye Programme

-     Exclusive edition partnerships with K-pop musicians who are also artists for artworks and merchandise

-     Featured Artists Editions

-     Sales of artworks at fairs (allowing on-line viewing)

-     NFTs, digital art and Crypto payment system

-     START.tv launching 2022 will cover reviews of gallery exhibition openings, artist interviews and gallery reviews from around the world, initially updated weekly and eventually daily

-     Advertising

The Global Art Market

The global art market is worth approximately $50 Billion with online sales starting to make up a larger Digital Art Sales make up a percentage of these sales and Digital Art Sales starting to emerge as one of the fastest growing sectors. Covid 19 significantly impacted physical art galleries in 2020 with many posting 40+% losses in sales but art buyers may still want to acquire new artworks and are starting to move their purchasing power online. While Art Fair sales have been dramatically reduced due to the inability to host live events, travel restrictions etc., the new NFT Marketplaces (marketplaces are the online platforms on which you can buy and sell NFTs) are exploding in popularity.

K-Pop

K-pop is a genre of South Korean popular music. Although the term includes music of a variety of stylistic origins, it is often associated with so-called K-pop idols. Idols are usually young individuals, who are known for being good-looking, fashionable, highly trained in singing and dancing, as well as having an almost perfect image. The most successful groups are often signed under South Koreas biggest agencies, where they undertake strict training before they make their debut. The K-pop entertainment company with the highest sales revenue in 2018 was SM Entertainment, who manage multiple successful idols, for example the boyband EXO.

K-pop is constantly growing

Korean pop idols started to become famous in Asian countries in 2003. Singer BoA and boyband TVXQ became the first K-pop idols to successfully break into the Japanese market. With the support of the South Korean government, who saw the industries economic potential, the so-called Korean wave started to spread even further, and K-pop gained a global audience. Girlband Blackpink was the first K-pop band to headline the famous U.S. music festival Coachella in 2019. Nevertheless, with both nationwide and global success, the seven-member boyband BTS is the biggest active boyband in South Korea currently. In December 2018, it was estimated that the band generates around four trillion South Korean won as economic value to the country per year.

Source: Statista