September 30, 2019 Admission to Trading on AIM

Released 07:00 30-Sep-2019


RNS Number : 0936O

Entertainment AI PLC

Entertainment AI plc

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

Admission to Trading on AIM

Strong Launch

Entertainment AI plc (EAI: AIM), a leading technology and media platform company focused on providing its global automotive and lifestyle audiences and its strategic partner audiences with real-time access, in a frictionless way, to "in the moment" opportunities from more relevant short form video content to "one-click" e-commerce, is pleased to announce its admission to AIM and initiation of trading as at 8am today.  As set forth in the highlights, EAI is well-positioned along all business dimensions to occupy a leadership position in the coming "Third Wave of TV" as telecoms, content and technology sectors combine to capture a share of changing global market.

The Group's subsidiaries - GTChannel, Inc (audience and content base), Tagasauris, Inc (AI and machine learning technologies) and Entertainment AI, Inc (strategic relationships and data analytic technology) - have begun to execute the EAI business plan ahead of closing and AIM launch in order to gain a fast start on AIM.

A more detailed background to the Company and its capital formation is set forth in the admission document which can be found on the Company's website, www.entertainmentai.co.uk.

Highlights at Launch

·     EAI installed audience base of automobile and associated lifestyle enthusiasts growing rapidly

o  1H 2019 actuals - GTChannel subsidiary's MCN YouTube audience at 6.5 billion video views, up 88% (1H 2018: 3.4 billion)

o  1H 2019 actuals - GTChannel subsidiary's MCN gross advertising revenue at $8.7 million, up 107% (1H 2018: $4.2 million)

o  Q3 audience and gross revenue continuing to grow strongly

·     EAI's AI and machine learning technology being integrated with GTChannel content and audience base and being tested with strategic partners

o  Tagasauris working with GTChannel affiliated content creators and partners to test new "micro-moment" offerings for core growth plan

§ 70 million unpaid subscriber base available to monetize with premium offerings

o  Complementary sales pipeline for software as service licensing initiated

§ Working with strategic partner Sumitomo to deliver a pilot for Rugby World Cup in Tokyo

§ Working with strategic partner Water Intelligence plc on pilot for Insuretech / home services market

·     Accomplished board, management team and board of advisors assembled to assist with corporate development (bios in Admissions Document and web site)

o  Significant experience on AIM

o  Significant public company leadership experience at Fortune 500 companies in media and technology

o  Significant experience with global mergers and acquisitions and strategic licensing

·     Well capitalized at launch

o  £8.6 million raised from strategic partners and UK first-tier institutions

o  Oversubscribed offering

o  Complete allocation of EIS/VCT offering along with non-EIS/VCT investment

Dr. Patrick DeSouza, Chairman of Entertainment AI stated, "We believe strongly that Entertainment AI can bring significant shareholder value and provide leadership in a new video-first world, where global consumers demand frictionless access to content and e-commerce opportunities.  On behalf of the management team, we appreciate the leadership of Rodger Sargent and Jon Hale in creating this opportunity along with the Blockchain Worldwide shareholders. Moreover, we are both excited and gratified for the opportunity to work with a high calibre board and top small cap funds that one typically doesn't see come together at this stage of a company's journey.  We aim high and to deliver."

Entertainment AI

Tel: +1 203 654 5426 or
+44 (0)7775 701 838

Patrick DeSouza, Chairman

Todd Carter, CEO

Scott Schlichter, Executive Director

Adrian Hargrave, CFO

Dowgate Capital Ltd (Joint Broker and Research Coverage)

Tel: 020 3903 7715

Stephen Norcross

Paul Richards/Thomas Like (Analysts)

WH Ireland (Joint Broker and Nomad)

Adrian Hadden / James Sinclair-Ford / Matthew Chan

Tel: 020 7220 1666

Terms and definitions used in this announcement have the meanings given to them in the announcement made and admission document published by the company on 11 September 2019 and 27th September 2019 unless the context provides otherwise.

Information on Entertainment AI PLC

The Group consists of three associated companies in the technology and media sector and is principally headquartered in Los Angeles with strategic relationships in the UK. The Group is composed of complementary assets: GTChannel combines a network of affiliated creators, a catalogue of streaming content and a fast growing global audience; Tagasauris owns AI and machine learning intellectual property that can deliver more video-based opportunities to GTChannel's ecosystem of viewers and creators; and Entertainment AI has data analytic technology and material contracts with strategic partners. Together these assets should enable the Group to synergistically unlock value for content creators and consumers.

EAI Group's mission is to be a first mover in a video-first world or what is seen to be the coming Third Wave of media distribution following the broadcast and cable eras. The Third Wave will be marked by full mobility and interactivity with content available 24/7 on mobile devices. One early example of the Third Wave is Instagram's March 2019 pilot launch with select brands enabling consumers to purchase "in-app" while viewing pictures. EAI Group's objective is to embrace the Third Wave by enhancing consumers' experiences on video, enabling interactivity with the video and providing frictionless access to a multiplicity of discovery opportunities; encouraging video sharing among social communities; and even fulfilling impulse purchases from what audiences see in the video.

GTChannel engages with its consumers through YouTube and other social media platforms. More specifically, it is a multichannel network ("MCN"). A MCN is defined as a network that affiliates with content creators and offers services that include programming assistance and product and audience development. As creators deliver more content, the MCN becomes more attractive to consumers, which in turn attracts advertisers. MCNs tend to focus on specific audiences or themes. GTChannel's theme is automobiles and other lifestyle goods and services.

GTChannel's principal revenue driver today is (Google-owned) YouTube ad revenue. In 2018, the GTChannel MCN generated US$11.4m of gross ad revenue (before deduction of YouTube and content creator commissions), an increase of more than 200 per cent. from 2017 matching the growth trajectory of the MCN's video views. Based on 1H 2019 actuals, GTChannel is continuing its upward trajectory. Through its MCN, it continues to cater to a global audience with over 6.3 billion video views (12.6 billion on a projected annualised basis) and a network of approximately 10,000 short-form video content creators. Further, there are approximately 70 million non-paying YouTube subscribers across GTChannel's MCN creator partner channels. These subscribers form a dedicated audience from which to further upsell products.  GTChannel currently manages approximately 370,000 videos and provides for 54 billion watch minutes on a projected annualised basis (having generated 27 billion minutes of watch time in the first six months of 2019). This growing viewership growth during 1H 2019 has translated into continued sales growth (1H19 gross advertising income of $8.7m (1H18: $4.2m)).

Tagasauris is an AI and machine-learning technology company with proprietary processes and intellectual property (patent with an early priority date, trade secrets, and know-how) for enriching videos to enlarge the base of opportunities served to consumers. Tagasauris' processes, a combination of AI and human annotation (crowdsourcing), create data derivative assets from underlying media assets in a process conceptualized as a "Micro-moments Factory" - an extension of Google research into consumer behaviour. An analysis, enrichment, and linking process breaks apart each video by tracking objects in a video and, then tagging and linking various object tracks or segments in the video so that additional opportunities (related content and products) can be identified. The resulting micro-moments can be published, indexed and discovered by search engines and served to audiences, such as GTChannel's, interactively while they are watching videos. Audiences can share these micro-moments on social networks and instant messaging platforms. The video opportunities are offered in a panel underneath the GTC video player in an unobtrusive way. Tagasauris' technology has been used at Disney and HBO to enrich content and consumer experience.

The Group's growth plan seeks to expand GTChannel's revenue base; moving from an advertising led model into other revenue channels such as paid subscriptions, corporate sponsorships, e-commerce and strategic licensing.  GTChannel has an Owned and Operated Site ("O&O").  This site and its content offerings will be used to harness data derived from Tagasauris' technology to create such additional revenue channels. However, while EAI Group's MCN and O&O strategy will focus in the near-term on GTChannel's MCN and O&O automotive and lifestyle audiences, Tagasauris will provide brands and strategic partners with access to its proprietary enabling technologies to enrich video for other audience channels and passion groups. Entertainment AI already has two licensing opportunities which are being developed with strategic investors in this IPO - Sumitomo Corporation, a global trading and investment company with various audiences from sports to food, and Water Intelligence plc, an AIM-traded company with audiences, especially homeowners, interested in water leak prevention and sustainability. Prior to closing and admission toa trading, EAI has worked with Sumitomo and with EAI's UK technology partners to develop a comprehensive pilot for Sumitomo's coverage of the Rugby World Cup.  Given that the trend is toward a video-first world for many audiences, Entertainment AI plans to launch a "software as a service" offering.

EAI Group seeks to disrupt the competitive landscape emerging from the tectonic shift taking place in the telecommunications, media and technology markets as consumers rapidly transition to short form video content on mobile screens. Telecom giants, such as AT&T and Altice, and tech giants, such as Facebook and Amazon, are moving fast to reposition themselves ahead of the Third Wave by acquiring content, audiences and technology for direct streaming and to harness personal audience data to create Netflix-style platforms. The objective is to take audiences one step further: rather than simply viewing short-form video content on mobile devices, viewers will be able to engage interactively with micro-moments introduced through Tagasauris' enriched video process. Viewers can play, pause, and resume watching and share videos and the most memorable, extreme, emotional, funny, best, cool parts of videos that they love on social media networks such as Facebook and Twitter.

Ticker Symbols and Total Voting Rights

Upon Admission, the Company's name will be Entertainment AI plc with ticker EAI and ISIN GB00BK6SHS41. In addition, and in accordance with the provisions of the Disclosure and Transparency Rules of the Financial Conduct Authority, the Company confirms that, all of the Ordinary Shares have equal voting rights and none of the Ordinary Shares are held in Treasury. The total number of voting rights in the Company upon Admission is therefore 49,957,876. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.

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