REG - Gfinity PLC - New business development and trading update

GfinityAnnouncement

11/11/2024 14:45

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RNS Number : 7571L  Gfinity PLC  11 November 2024

For immediate release

11 November 2024

Gfinity PLC

("Gfinity" or the "Company")

New business development and trading update

 

As previously announced on 26 September 2024, the Board of Gfinity plc
(AIM:GFIN), which specialises in digital media and monetisation, intended to
explore new business opportunities to develop and expand the Company's core
focus of digital media content, further leveraging the infrastructure
commercially available in the Company and intended to use the proceeds from
the recent funding to explore these opportunities.

The Board is pleased to announce that it has signed a non-binding Memorandum
of Understanding ("MOU") with 0M Technology Solutions Ltd ("0M") to
commercialise 0M's advanced artificial intelligence technology, Connected IQ
("CIQ"), which is specifically targeted at the connected video market. Gfinity
and 0M intend to agree and sign a detailed legally binding agreement as soon
as possible, and in any event no later than 6 months from the date of the MoU.

The MOU outlines the scope of potential collaboration between Gfinity and 0M
and which envisages that Gfinity will enter into an exclusive licence
agreement with 0M ("Licence") for the use of CIQ and will pay a licence
royalty fee to 0M expected to be equivalent to 30% of net profits generated by
Gfinity from the Licence.  CIQ has been developed by 0M and is now at the
stage of being ready to be launched for commercial launch. The Board believes
that the Licence will provide an opportunity for Gfinity to combine its
current network and relationships within the advertising sector and digital
media monetisation, together with the initial relationships CIQ has already
established with top-tier agencies, sell-side platforms, to commercialise CIQ.

 

David Halley, CEO of Gfinity, commented: "This proposed partnership represents
an opportunity for Gfinity to combine innovative AI technology with scalable
solutions in the fast-growing connected video and advertising industry. With
the current rate of growth of video content through platforms such as
Connected TV and Youtube, video is becoming the dominant medium for
information online, and Gfinity can provide a valuable service to the
monetisation of this market. The MOU aligns with our strategic focus on
delivering value to our shareholders by capitalising on key industry trends."

The MoU is non-binding and there is no certainty that definitive binding
agreements will be entered into in due course or on the terms as set out in
the MoU. Shareholders should note that while the Board is excited about CIQ's
potential market, CIQ is still at an early stage with no sales track record
and there is no certainty as to how sales might develop under the Licence. 0M
is a newly formed company with no published accounts.

In addition, the MoU envisages that Gfinity will have the option, but not the
obligation, to buy 0M, CIQ and its associated intellectual property after the
first anniversary of the date of execution of the binding Licence agreement
("Effective Date") for a consideration of £2 million. The Option will
otherwise lapse on the third anniversary of the Effective Date. Given the lack
of trading and commercialisation to date, the current value of 0M and assets,
which are the subject of the Option, is limited unless and until the
commercialisation by Gfinity under the Licence is successful, which is not
guaranteed. The Option price and value of the Licence is based on the Board's
current assessment of potential outcomes of commercialisation and prospective
sales in 2025 and beyond, based on the Board's own internal estimates, the
current status of the software and the potential pipeline of customers.

 

A further announcement will be made in due course when binding agreements are
completed.

0M is beneficially owned by Robert Keith, who is currently interested in
704,419,692 Ordinary Shares held by him directly and indirectly and which
represent approximately 20.7% of the Company's existing Ordinary Share
Capital. Accordingly, the execution of any binding agreement with 0M will be a
related party transaction pursuant to Rule 13 of the AIM Rules for Companies,
and will be dealt with accordingly at the time.

Current trading

As previously reported, during the last year Gfinity has completed a 12-month
cost-cutting programme, reducing headcount and technology expenses. Following
this restructuring, these changes have been reflected in improvement in
profitability in the last quarter of 2024 and the Board is pleased to announce
that it currently expects to meet its objective to achieve monthly
profitability by the end of 2024, whilst leveraging its strengthened
commercial resources in the coming year.

Other Information

A copy of this announcement is available at the Company's website:
www.gfinityplc.com (http://www.gfinityplc.com)

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for
the release of this announcement on behalf of the Company was David Halley,
Chief Executive.

 

Enquiries:

 Gfinity Plc                    David Halley      +44 (0)7516 948427

 Beaumont Cornish Limited       Roland Cornish    +44 (0)207 628 3396

 Nominated Adviser and Broker   Michael Cornish   www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk/)

 

Further Information

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.

Forward Looking Statements

Certain statements in this announcement are or may be deemed to be forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'' ''could'' "should" ''envisage''
''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those
variations or comparable expressions including references to assumptions.
These forward-looking statements are not based on historical facts but rather
on the Directors' current expectations and assumptions regarding the Company's
future growth, results of operations, performance, future capital and other
expenditures, competitive advantages, business prospects and opportunities.
Such forward looking statements reflect the Directors' current beliefs and
assumptions and are based on information currently available to the Directors.
A number of factors could cause actual results to differ materially from the
results discussed in the forward-looking statements including risks associated
with vulnerability to general economic and business conditions competition
environmental and other regulatory changes actions by governmental authorities
the availability of capital markets reliance on key personnel uninsured and
underinsured losses and other factors many of which are beyond the control of
the Company. Although any forward-looking statements contained in this
announcement are based upon what the Directors believe to be reasonable
assumptions. The Company cannot assure investors that actual results will be
consistent with such forward looking statements.

 

 

ENDS

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