NEW YORK, May 13, 2019 /CNW/ -- Frankly
Inc. (TSX VENTURE: TLK) ("the Company") is pleased
to announce that it has completed the first tranche of its
previously announced non-brokered private placement offering of
units for up to US$7 million (the
"Private Placement"). The Company has also completed
its previously announced acquisition of the "AMP" radio content
management system and related customer agreements from Triton
Digital, Inc. and certain affiliated entities (collectively,
"Triton").
The Private Placement – On May 10,
2019, the Company completed the first tranche of the Private
Placement, issuing an aggregate of 7,772,676 Units at a price of
C$0.35 per Unit, raising gross
proceeds of C$2,720,436.60.
Each unit ("Unit") consisted of one common share in the
capital of the Company ("Common Share") and one-half of one
warrant to acquire a Common Share (each whole warrant to purchase
one common share, a "Warrant"). Each Warrant entitles
the holder to acquire one Common Share from the Company at a price
of C$0.65 per Common Share until
twenty-four months from the date of issuance. The Common
Shares and Warrants are subject to a hold period of four-months and
one day from the date of issuance in accordance with applicable
Canadian securities legislation, as well as contractual "lock-up"
restrictions pursuant to which subscribers in the Private Placement
agreed not to dispose or otherwise transfer the economic
consequences of securities composing the Units, or securities of
the Company held prior to the completion of the Private Placement
(collectively, the "Locked-up Securities"), for eleven
months from the issue date, with 30% of the Locked-up Securities
being released from lock-up four months and one day from the issue
date, and the remainder of the Locked-up Securities being released
on a schedule of 10% of the Locked-up Securities each month
thereafter.
In connection with the Private Placement, the Company will pay a
finder's fee to a third-party finder who is a current shareholder
of the Company consisting of (i) 6.5% of the gross proceeds of the
Private Placement raised in cash, and (ii) that number of finder's
warrants as is equal to 6.5% of the securities sold in the Private
Placement. Each finder's warrant is exercisable to purchase one
Unit at the offering price of C$0.35
for a period of two years from the closing date of any applicable
tranche of the Private Placement. The finder's fee will not
be payable on subscriptions completed by the finder for the
finder's own account. The net proceeds from the first tranche of
the Private Placement were used to satisfy the Company's initial
payment obligation of US$1.75 million
under the AMP Agreement (as defined below). The Company has
received conditional approval from the TSX Venture Exchange
("TSXV") for the Private Placement, which remains subject to
TSXV final approval, and the Company expects to close one or more
additional tranches of the Private Placement in May 2019.
The AMP Asset Purchase – On May 10,
2019, the Company's Frankly Media subsidiary also
concurrently completed the acquisition of Triton's AMP business
assets, including the AMP content management platform system for
radio broadcasters, and certain customer agreements to supply AMP
services to approximately 800 radio stations. The acquisition was
completed pursuant to an asset purchase agreement (the "AMP
Agreement") between the Company and Triton dated May 1, 2019. The total purchase price to be paid
under the AMP Agreement is US$3
million, subject to adjustment in certain
circumstances. A deferred portion of the purchase price in
the amount of US$250,000 is payable
on the six-month anniversary of the initial closing date. The
acquisitions contemplated in the AMP Agreement remain subject to
the final approval of TSXV. For additional information
related to the Private Placement and the AMP Agreement, see the
Company's news releases dated May 1,
2019 and May 2, 2019, and the
associated material change report filed in connection
therewith.
"We are thrilled with the response to the Private Placement,
which is a validation of all the work we've done over the past
three years to reimagine Frankly's products and services,"
said Company CEO Lou Schwartz. "Additionally, the
AMP radio assets will allow us to extend our footprint in an
adjacent market and realize multiple synergies. We look
forward to continue building our core business as we take advantage
of new opportunities as they arise."
About Frankly
Frankly Media provides a complete suite of digital solutions for
media companies to create, manage, distribute and monetize their
content on all platforms maximizing audience engagement and revenue
potential. The company is headquartered in New York with offices in Atlanta. For
more information, visit www.franklymedia.com.
Notice Regarding Forward-Looking Statements
This release includes forward-looking statements regarding the
Company and anticipated transactions involving the Company.
Forward-looking events and circumstances discussed in this release
include statements regarding the completion of additional tranches
of the Private Placement and the timing thereof, the expected size
of the Private Placement, the use of proceeds from the Private
Placement, additional payments under the AMP Agreement, the
extension of the Company's footprint and realization of synergies
as a result of the acquisition of the AMP assets, and approval of
the Private Placement and AMP acquisition transactions by the
TSXV. The subject or results of any forward-looking statement
may not occur by any specified or expected dates or at all, and
could differ materially as a result of known and unknown risk
factors and uncertainties affecting the parties, including but not
limited to failure to obtain investor participation in the Private
Placement, market sentiment toward the Company's securities, lack
of regulatory approval for the Private Placement, and the ability
to obtain future financing proceeds or generate revenue to satisfy
any deferred purchase price obligations under the AMP
Agreement. The outcome of the subject of any forward-looking
statement cannot be guaranteed. Except as required by
applicable securities laws, forward-looking statements speak only
as of the date on which they are made, and the Company undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
Neither TSXV nor its Regulation Services Provider (as that
term is defined in policies of the TSXV) accepts responsibility for
the adequacy or accuracy of this release.
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content:http://www.prnewswire.com/news-releases/frankly-announces-closing-of-initial-tranche-of-private-placement-financing-and-acquisition-of-amp-assets-providing-services-to-over-800-radio-stations-300848653.html
SOURCE Frankly Media