THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF SEEING MACHINES LIMITED Seeing Machines Limited

("Seeing Machines" or the "Company")

Capital Raising Placing and Subscription to raise £15m Australian Offer and Overseas Offer to raise up to £2m

Placing to support ongoing commercialisation of the FOVIO automotive business 13 December 2016

Seeing Machines Limited (AIM: SEE), the AIM listed technology company with a focus on operator monitoring and intervention sensing technologies and services, is pleased to announce that it has conditionally raised £15 million, before expenses, through a placing and subscription. finnCap Ltd ("finnCap"), as the Company's broker, has conducted a placing of 329,611,500 new ordinary shares in the Company ("Ordinary Shares") (the "Placing Shares" and the "Placing") with institutional investors at a price of 4 pence per share (the "Placing Price") and 45,388,500 Ordinary Shares have been subscribed for with the Company (the "Subscription Shares" and the "Subscription") at the Placing Price by its strategic investor, V S Industry Berhad and by Ken Kroeger, Chief Executive Officer of the Company.

The Placing demonstrates continued strong support by existing shareholders. In addition, the Company will provide an opportunity to certain existing shareholders to raise up to a further £2 million at the Placing Price (or an AUD equivalent) under an overseas offer and an Australian offer (the "Offers"), details of which are set out below.

The net proceeds of the Placing and Subscription, and the Offers (the "Fundraising") will provide growth capital to continue the ongoing commercialisation of the Company's technology, including the FOVIO automotive business. The Fundraising is conditional upon shareholder approval.

Terry Winters, Seeing Machines' Chairman, commented: "We are delighted with the support shown by investors in the Placing and Subscription. We are seeing strong demand for our advanced Driver Monitoring Systems from global car makers and from their tier 1 suppliers. We previously considered

spinning out our FOVIO automotive business however the Directors have resolved it is in the best interests of shareholders to retain full ownership. All our intellectual property including data, our SiP Driver Monitoring System chip and all our key staff will remain available to all Seeing Machines' target industries.

We continue to execute on our multi-sector transportation market strategy and this capital raise supports the ongoing commercialisation of our technology across these target markets, including our FOVIO automotive business. I would like to thank investors for their support, and invite eligible existing shareholders to participate in the proposed capital raising by way of the Australian Offer and the Overseas Offer."

Background to the Fundraising and Use of Funds

The Company remains focused on executing its multi-sector transportation market strategy focussed on CAT (rugged off-road), commercial fleet, automotive, aviation and rail. The Directors believe that automotive represents the largest addressable transport market for Seeing Machines' technology. The automotive industry is currently going through massive technological change driven by powerful dynamics of disruption. We believe the opportunity for Seeing Machines' core technology in semi- autonomous vehicles as part of Advanced Driver Assistance Systems ("ADAS") is significant. Most major vehicle manufacturers ("OEMs") are targeting semi-autonomous vehicles on their roadmaps with several automotive analysts predicting that Driver Monitoring Systems ("DMS") technology could be mandated within 5 to 10 years. Worldwide 88 million light vehicles were produced in 2015, with production forecast to grow to over 100 million per annum by 2020.

As previously announced Seeing Machines' DMS technology has been selected by a major OEM for use in more than 10 car models across a number of their car brands, with the first model targeted for release in 2017. The Company is currently responding to tenders from two premium European OEMs and is engaged with five global tier 1 automotive suppliers ("tier 1s") to promote its DMS solution. The Company has leased or provided 60 DMS research platforms for use across 14 automotive and tier 1 customers.

The Company's first FOVIO DMS has been designed-in by the tier 1 and the OEM as vehicle firmware. FOVIO DMS in follow on models can be delivered both as firmware and also as processor chips, once automotive qualified, to be sold to the tier 1 supplier. As previously announced, the Company has also launched a proprietary System in Package ("SiP") chip which is currently being validated for automotive applications and in the future will be a drop in solution for tier 1s and other aftermarket transport applications. The Board and management believe that in future years the SiP will enable the Company to capture a greater share of the revenue and margin in the automotive and commercial fleet markets.

Today the Company's FOVIO automotive sales relate to engineering services, and human factors services together with sales from the use of our DMS research platform, and are paid for by both OEMs and tier 1s. Automotive royalties on the Company's first production car DMS are first expected to begin to accrue in late calendar year 2017. The Fundraising will support the growing FOVIO automotive business including R&D and program engineering, business development and product manufacturing.

The Company previously considered spinning out the FOVIO automotive business. The Directors have resolved it is in the best interests of shareholders to retain full ownership, with all of the Company's

intellectual property including data, its SiP DMS chip and all of its key staff remaining available to all Seeing Machines' target industries now and in the future. Data acquired in use on road is mutually beneficial to the Company's FOVIO automotive, fleet and other programs. The Directors believe that in future the FOVIO SiP will support cost reduction of our Guardian fleet and other Seeing Machines products.

The Board believes that the Fundraising is in the best interests of all Shareholders and can place the Company in a stronger position to capitalise on the significant global opportunities for its products.

Current Trading and Outlook

Fleet Guardian sales are expected to show strong growth in the second half of the financial year as subscriptions for connected vehicles gain momentum internationally. Revenue in FY16 benefitted from full recognition of the CAT licensing revenue leading to a record year. Revenues in FY17 are expected to show underlying sales growth year on year in all target markets, however there will not be another large license fee from CAT. All license fee instalments payable by CAT to Seeing Machines relating to the licence to manufacture and distribute the DSS product, save for US$1.5 million due in January 2019, have been brought forward and have now been received by Seeing Machines. Seeing Machines' CAT revenues are expected to build during the year reflecting royalties on both DSS hardware sales and monthly monitoring fees.

Seeing Machines expects to appoint to the Board a CAT senior manager who will be joining as a non- executive director in January 2017. The new director will be joining in order to further strengthen the relationship between the two companies and drive safety related revenues for both companies under the existing global agreement for product development, licensing and distribution. Further details in relation to the expected appointment will be announced in due course.

Details of the Placing and Subscription

The Company will issue 329,611,500 Placing Shares and 45,388,500 Subscription Shares at 4 pence per Ordinary Share, subject to shareholder approval. Application will be made to the London Stock Exchange for the Placing Shares and the Subscription Shares to be admitted to trading on the AIM market ("Admission") and Admission is expected to occur on 16 January 2017, assuming shareholders give approval.

Pursuant to a placing agreement, dated 13 December 2016 between finnCap and the Company (the "Placing Agreement"), finnCap has conditionally agreed, as agent of the Company, to use its reasonable endeavours to procure investors for the Placing Shares. The Placing is conditional upon, inter alia, Admission becoming effective on or before 8.00 a.m. on 16 January 2017 (or such later time and/or date as the Company and finnCap may agree, but in any event by no later than 8.00 a.m. on 31 January 2017), shareholder approval and the Placing Agreement having been entered into and the agreement having not been terminated prior to Admission. The Placing Shares and Subscription Shares will rank equally in all respects with the existing Ordinary Shares. Neither the Placing nor the Subscription are being underwritten by finnCap.

Shareholder Approval - Notice of General Meeting

Under the Company's Constitution the Directors may issue new shares up to a cap of 15 per cent. of the Company's issued shares in any twelve month period (with certain exceptions). The total number of Placing Shares and Subscription Shares exceeds this 15 per cent. cap, and accordingly shareholder approval is required for the Directors to issue the Placing Shares and Subscription shares.

It is anticipated that a notice of meeting will be sent to shareholders, and to those who hold depositary interests, on or around 16 December 2016 for a General Meeting to be held on or around 12 January 2017. A further announcement will be made in due course.

Director Participation

Ken Kroeger, the Company's Chief Executive Officer, is subscribing for new Ordinary Shares in the Subscription. His participation and resultant interest following Admission is set out in the table below:

Director/key executive

Existing interest in Ordinary Shares

Number of

Subscription Shares

Total interest

following the Subscription

Percentage of enlarged

share capital following Admission, pre completion of the Offers

Ken Kroeger

5,139,768*

388,500

5,528,268*

0.38%

*Includes Ordinary Shares and vested shares issued in 2012, still held by trustee.

Related Party Transactions

Substantial shareholder

V S Industry Berhad ("VSI") through its wholly owned subsidiary V S International Venture Pte. Ltd. has conditionally agreed to subscribe for 45,000,000 Subscription Shares under a subscription agreement at the Placing Price. As a substantial shareholder of the Company, VSI is a related party for the purposes of the AIM Rules for Companies. The independent directors (being all of the Directors, excluding YK Ng) consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the subscription by VSI are fair and reasonable insofar as the Company's shareholders are concerned.

Director

Ken Kroeger has conditionally agreed to subscribe for 388,500 Subscription Shares under a subscription agreement at the Placing Price. As a director of the Company, he is a related party for the purposes of the AIM Rules for Companies. The independent directors (being all of the Directors, excluding Ken Kroeger) consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the subscription by Ken Kroeger are fair and reasonable insofar as the Company's shareholders are concerned.

Seeing Machines Limited published this content on 13 December 2016 and is solely responsible for the information contained herein.
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