Flexion carries out a directed issue of shares to the public with the purpose of increasing the market’s knowledge and number of shareholders
THIS PRESS RELEASE IS NOT INTENDED FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, HONG KONG, JAPAN, CANADA, NEW ZEALAND, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND, SINGAPORE, THE UNITED STATES OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION OF THIS PRESS RELEASE WOULD BE, IN WHOLE OR IN PART, SUBJECT TO LEGAL RESTRICTIONS. THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OF FLEXION MOBILE PLC. SEE ALSO SECTION “IMPORTANT INFORMATION” BELOW.
London, 29 November 2022
The Board of Directors of Flexion Mobile Plc ("Flexion" or the "Company") (Nasdaq: FLEXM) has today resolved to carry out a directed issue of shares to the public in Sweden of no more than MEUR 2.5, corresponding to approximately MSEK 25.3 (the "Offering"). The purpose of the Offering is to increase the market’s knowledge of Flexion, obtain a wider distribution of the ownership of the Company's shares to create prerequisites for a more liquid trading in the share, as well as to finance growth investments and the ongoing acquisition strategy. The subscription price for the shares in the Offering shall be equal to the volume weighted average price for the share on Nasdaq First North Growth Market ("Nasdaq First North") during the application period, which will run between 30 November up to and including 8 December 2022, with a discount of ten (10) percent.
Comment from CEO Jens Lauritzson
“Since its listing in 2018, Flexion has gained a world-leading and unique position on the mobile gaming market through our unique offering that connects game developers with new end-consumers. Our strong market position has laid the foundation for the company’s strong growth. In the most recent quarter, we reported year-on-year organic growth of 111%,” says Jens Lauritzson, CEO and co-founder of Flexion, and continues:
“Because we didn’t carry out a traditional IPO and roadshow, awareness in the Swedish stock market of Flexion has been low, which we now want to improve through this directed issue of shares to the public. Therefore, we have selected Avanza and its amazing client base to spread the message of Flexion.”
The Offering in short
- The Offering comprise no more than 2 100 000 new shares and is directed to the public in Sweden. The purpose of the Offering, and the reason for the deviation from the shareholders’ preferential rights, is to increase the number of shareholders in the Company, to create prerequisites for an increased liquidity in the share and to further increase the Company’s financial position to finance further growth.
- The subscription price for the shares in the Offering shall be equal to the volume weighted average price for the share on Nasdaq First North during the application period, which will run between 30 November up to and including 8 December 2022, with a discount of ten (10) percent.
- The Offering will amount to no more than MEUR 2.5, corresponding to approximately MSEK 25.3, and hence no prospectus will be prepared for the transaction. As the Offering can amount to no more than MSEK 25.3, the number of shares in the Offering can, depending on the final subscription price, amount to less than 2 100 000.
- Allocation in the Offering will be decided by the Company’s Board of Directors. If the Offering is oversubscribed, allocation will primarily be given to as many investors as possible with minimum lots and thereafter pro-rata to the number of shares applied for. In addition, the Board of Directors may prioritize allocation to strategic investors.
- Applications for subscription of shares shall be done on Avanza’s online platform. An application to subscribe for shares must be for a minimum of 300 shares, and thereafter in even lots of 10 shares.
- Flexion has today published an information memorandum (in Swedish) with full terms and conditions for the Offering, which is available on the Company's website and will be made available on Avanza’s website.
Background and rationale for the Offering
Flexion is a global fast growing technology company active in the market for marketing-related services to leading game developers. The business is based on distribution and marketing-related services of mobile games in the alternative app stores from companies such as Amazon, Samsung, ONE store, Huawei and as recently announced, Microsoft Store at Windows 11. Flexion is, according to the Company’s assessment, a global leader within this segment and generates, from the seven largest games in Flexions games portfolio, gross revenues corresponding to approximately MUSD 10 per game and year. The business model is highly scalable which has been proven through a low marginal cost where the cost base is relatively constant regardless of Flexion’s growth rate.
Flexion has, from several aspects, a strong and unique position on the global market for online-gaming and continues to grow strongly. Total revenue in the third quarter 2022 grew by 138 percent to MGBP 18.5 compared with the same period last year. Adjusted EBITDA increased to MGBP 1.5 and cash amounted to MGBP 10.5. Long-term growth has also been strong. Flexions revenue has grown by almost 473 percent during the period between 2018 up to and including 2021, corresponding to a compound annual growth rate (CAGR) of approximately 79 percent.
Alongside a strong organic growth, Flexion aims to add more services to its customer base, which is fully in line with the Company’s strategy of being a complete service partner to game developers. This expansion phase commenced in early 2022 when the Company acquired the leading gaming influencer marketing agency Audiencly and invested in Liteup Media, also a player within influencer marketing in the gaming industry. Through these investments, Flexion intends to take a leading position in this segment as well.
In order to increase the market’s knowledge of Flexion, number of shareholders and to increase the liquidity in the trading of the share, the Company’s Board of Directors has decided to carry out the Offering. The Company’s assessment is that the market in which Flexion operates will continue to grow and that there may arise additional interesting investment opportunities. A strengthened financial position gives the Company opportunities to continue its successful strategy.
The Offering
The Offering comprise no more than 2 100 000 new shares and the subscription price for the shares in the Offering shall be equal to the volume weighted average price on Nasdaq First North during the period 30 November up to and including 8 December 2022, with a discount of ten (10) percent. No commission will be paid for subscribed shares. The Offering is only distributed in Sweden. The Offering cannot amount to more than MEUR 2.5, corresponding to approximately MSEK 25.3, and hence the number of shares in the Offering can, depending on the final subscription price, amount to less than 2 100 000.
Upon full subscription in the Offering, the Company will receive proceeds of approximately MSEK 25.3, before deduction of transaction costs, which are expected to amount to approximately MSEK 2.3. The Offering can entail a dilution, based on the number of shares in Flexion prior to the offer, of not more than approximately 3.9 percent of the number of shares and votes in the Company, through an increase in the number of shares of not more than 2 100 000.
In order to enable delivery of shares to investors in connection with the allocation in the Offering, the major shareholder Mobile Sensations Ltd, a fully-owned company by Jens and Per Lauritzson, has lent 2 100 000 shares to Avanza Bank AB.
Indicative time schedule
- An information memorandum (in Swedish) has today, 29 November 2022, been published and is available on the Company's website.
- The application period will run between 30 November up to and including 8 December 2022, and applications for subscription of shares shall be Avanza Bank AB at hand no later than 8 December, at 17.30 CET.
- The outcome of the Offering is expected to be announced around 9 December 2022.
- Information regarding allocation is expected to be given around 9 December 2022, by means of a contract note.
Advisors
Avanza Bank AB acts as financial advisor and Gernandt & Danielsson Advokatbyrå acts as legal counsel to Flexion in connection with the Offering.
For more information contact:
Niklas Koresaar
Chief Financial Officer
+44 207 351 5944
This information was submitted for publication, through the agency of the contact persons set out above, on 29 November 2022, at 18:00 (CET).
Important information
The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in Flexion. No prospectus will be prepared. Any invitation to the persons entitled to subscribe for shares in Flexion is made solely through the information memorandum which Flexion published today, 29 November 2022. No action has been taken, or will be taken, by Flexion to allow an offer to the public in jurisdictions other than Sweden. This press release may not be released, published or distributed, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, South Korea, Switzerland, Singapore, the United States or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in a manner that contravenes such restrictions or would entail such requirements. Failure to comply with this instruction may result in a violation of applicable securities laws. No new shares have or will be registered under the United States Securities Act of 1933, as amended (“Securities Act”), or securities legislation in any state or other jurisdiction in the United States and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or transferred, directly or indirectly, into or within the United States, other than pursuant to an exemption from, or in a transaction that is subject to, the registration requirements of the Securities Act. The Offering is not aimed for individuals with residence Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, South Korea, Switzerland, Singapore, the United Kingdom, the United States nor in any other jurisdiction where participation would require additional prospectus, registration or other arrangements aside from what is required under Swedish law system.
Forward-looking statements
This press release contains certain forward-looking statements that reflect Flexion’s current views and expectations of future events, as well as financial and operational development, including statements regarding the Offering and statements regarding guidance, planning, outlook and strategies. Words that are "intended", "assessed", "expected", "planned", "estimated", "can", and other terms that imply indications or predictions regarding future developments or trends and which are not based on historical facts, are forward-looking information. Although Flexion believes that these statements are based on reasonable assumptions and expectations, Flexion cannot guarantee that such forward-looking statements will be realized. Since these forward-looking statements include both known and unknown risks and uncertainties, actual outcomes may differ materially from what is stated in forward-looking information. Forward-looking statements in the press release are valid only at the time of the press release and are subject to change without notice. The Company makes no commitment to publish updates or revisions to forward-looking statements as a result of new information, future events or the like in addition to what is required by applicable laws or stock market regulations.