Agency agreement, board change & trading update

RNS Number : 4740K

SocialGO plc

24 August 2012

 



SocialGO plc (SocialGo or the "Company")

SocialGO signs distribution agreement with Catalis SE, Board Changes and Trading Update

SocialGO plc ("SocialGO") is pleased to announce that it has entered into a distribution agreement with Catalis SE ("Catalis") (the "Distribution Agreement").  Catalis is well regarded in the media industry, employing 520 staff, with operations in the UK, Europe and the USA, and working with a prestigious client list, which includes Microsoft, Hewlett Packard, Nokia, Disney, Paramount, Warner Brothers and the BBC. The Distribution Agreement with Catalis is aligned with the previously disclosed strategy for SocialGO to move from pure product development to focus more on sales and marketing.

The Distribution Agreement will see Catalis acting as an agent for SocialGO plc, providing marketing, promotion and sales support, as well as financial and creative services to SocialGO.  Catalis has valuable relationships with a range of customers, who may be potential partners for SocialGO.  Catalis also has the ability to scale support and creative services rapidly to accommodate any contract wins. The location of Catalis' offices, in both London and Los Angeles, is of particular significance to potential SocialGO partners, as the majority of present users are US-based.

Under the terms of the Distribution Agreement, Catalis will pay SocialGO a fee of £50,000 per month (the "Fee"), which will be sufficient to cover the current cost base of SocialGO.  Catalis will receive the first £50,000 of revenue per month from the SocialGO platform, including existing revenues.  Once total revenue for SocialGO products exceeds the Fee, additional gross revenues will be split 60:40 in favour of Catalis.  The entire agreement can be terminated by either party on four months notice. Under the terms of the Distribution Agreement, SocialGO will be able to continue to supply and/or license its products to third parties on a "white label" basis. 

The majority of costs associated with scaling up the business as revenues grow will be met by Catalis, out of its revenue share.   The Board of SocialGO therefore believe that SocialGO will benefit from further revenue over and above the Fee with little additional cost to its operations.  

 The Distribution Agreement will enable SocialGO to improve its worldwide reach and satisfy potential large partners that it is able to scale and grow to meet any requirement to service significant numbers of social website customers.  

Trading Update

SocialGO plc expects to issue its interim financial statements to 30 June 2012 on or before 7 September 2012.   The Company can report that revenue for the six months to 30 June 2012 is expected to be materially below that reported for the same period in 2012 although the expected loss from operations will also be lower as a result of cost reductions implemented during the period. 

Neil Goodall CEO commented:

"We are excited by the opportunity of sharing the international resources, network and facilities of Catalis. With the support of Catalis, we can really accelerate the development and profile of our platform, improving both our technology and our customer base."

Board Changes

Coinciding with this announcement, SocialGO today announces that Dominic Wheatley will move from Executive to Non-Executive Chairman of SocialGO plc.  This follows his recent appointment as the Chief Executive Officer of Catalis.

Dominic Wheatley Catalis Group CEO commented:

"Having been involved with Catalis Group as a Non-Executive Director for some time, I was delighted to recently be offered to take up the role of Chief Executive.  I realised that SocialGO would positively add to the range of services offered by the Catalis Group whilst benefiting SocialGO as a result of Catalis' distribution network."

AIM Rule 13

As a result of Dominic Wheatley, Chairman of SocialGO, being the Chief Executive Officer of Catalis, and Brett Morris, Finance Director of SocialGO, being the Group Finance Manager of Catalis, the Distribution Agreement is deemed to be a related-party transaction under Rule 13 of the AIM Rules for Companies.  The Directors of SocialGO, with the exception of Dominic Wheatley and Brett Morris, and having consulted with Deloitte Corporate Finance, consider that the terms of the transaction are fair and reasonable insofar as shareholders are concerned.

SocialGO plc
Neil Goodall, CEO	Tel: [phone]
	www.socialgoplc.com

Deloitte LLP
Oliver Rigby/Jon Hinton	Tel: [phone]
First Columbus
Chris Crawford / Kelly Gardiner	Tel: [phone]
	www.first-columbus.com

Hill & Knowlton
Rebecca Ribbans / Mark Walsh	Tel: [phone] www.hillandknowlton.co.uk

About Catalis

Catalis is a worldwide leading outsourcing provider focusing on high-end technical services relating to the creation of digital content for the film, video games and software industries. Catalis offers both testing and development services. It operates through its wholly-owned subsidiaries Testronic Labs and Kuju from locations throughout the UK, Europe and the USA.

www.catalisgroup.com

About SocialGO

SocialGO plc is a developer and provider of software and related services that allows customers to build their own online social presence, SocialGO™.  SocialGO's platform allows customers to quickly and easily create, manage and control their social media presence and provides the members of these websites with the ability to communicate and share with likeminded people in a controlled and secure environment.  SocialGO derives its revenues from subscription premiums paid by website owners and from selling value added services which allows website owners to maximise the social media experience and the revenues that can derive from creating and managing a social media presence.  SocialGO is part of the burgeoning Silicon Roundabout in London, UK.

www.socialgo.com

 

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