Proceeds to be loaned by Frankly to Torque Esports or a
subsidiary thereof to support proposed business combination
TORONTO, Jan. 28, 2020 /CNW/ -- Frankly Inc.
("Frankly") (TSX-V: TLK) (OTCQX: FRNKF) today
announced that it intends to conduct a non-brokered private
placement offering (the "Offering") of units
("Units"), with each Unit comprised of $1,000 aggregate principal amount of unsecured
subordinated convertible debentures (collectively,
the "Debentures") and one‑half of one common share
purchase warrant (collectively, the "Warrants"), for
aggregate gross proceeds to Frankly of a minimum of $2.5 million. Frankly intends to use the
proceeds from the Offering (net of any professional service fees
and finder's fees, if any) to provide a loan to Torque Esports
Corp. ("Torque") or a subsidiary thereof (the "Torque
Loan"). Frankly may pay a finder's fee to arm's length finders
in connection with the Offering of no more than 6% of the aggregate
subscription amount raised through subscribers introduced to
Frankly by such finder(s), provided that no finder's fees will be
paid in respect of any subscriptions made by existing shareholders
of Frankly, or to any insider of Frankly, or that is otherwise
prohibited by law.
The Offering and Torque Loan are intended to support the efforts
of Frankly and Torque as the parties work to enter into definitive
documentation in respect of the proposed business combination among
Torque, Frankly and WinView, Inc., as previously announced on
November 26, 2019 (the
"Transaction"). The anticipated terms of the Offering
(as described in further detail below) are designed to minimize
dilution to shareholders of Frankly in the event that the
Transaction is terminated or otherwise not consummated by the
Maturity Date (as defined below).
It is expected that the Debentures will bear interest at a rate
of 4% per annum, and will mature on April
30, 2020 (unless otherwise extended, the "Maturity
Date"). The Debentures are expected to be automatically
convertible into common shares of Frankly ("Frankly Shares")
immediately prior to the completion of the Transaction, at a
conversion price of $0.67 per Frankly
Share. It is expected that, in the event that the parties determine
to terminate or otherwise not pursue the Transaction, or if the
Transaction is not completed by the Maturity Date, the Debentures
will be redeemable by Frankly in consideration of a redemption
payment, payable in-kind, comprised of a pro rata assignment
of Frankly's interest in the Torque Loan to holders of Debentures,
or such other arrangement satisfactory to Frankly and investors
that results in the extinguishment or repayment of the Debentures
in exchange for the transfer of Frankly's interest in the Torque
Loan to the holders of Debentures. The Debentures will otherwise
provide for customary events of default and other terms and
conditions as are typical for investments of this nature.
The Warrants will expire upon the earlier to occur of: (i) the
date that the parties determine to terminate or otherwise not
pursue the Transaction; and (ii) two years from the date of issue,
and will be exercisable at a price of $0.90 per Frankly Share. The Warrants will
contain an acceleration provision that will entitle Frankly (or its
successor) to accelerate the expiry of Warrants if the
volume-weighted average trading price of the Frankly Shares (or
shares of the successor entity) exceeds $1.35 for a period of five consecutive trading
days.
The Offering and the terms thereof are subject to the approval
of the TSX Venture Exchange, as well as the entering into of
satisfactory documentation in respect of the Torque Loan.
Securities issued or issuable in connection with the Offering are
expected to be subject to statutory and, if required,
exchange-mandated four month hold periods.
The Torque Loan is expected to be unsecured and will bear
interest at a rate of 4% per annum. The Torque Loan will
include customary events of default, covenants, representations and
warranties and other terms and conditions as are customary for
transactions of this nature. The obligations of the borrower entity
under the Torque Loan will be guaranteed by Torque.
Closing of a first tranche of the Offering is expected to occur
on or about February 4, 2020.
The securities of Frankly have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S Securities Act"), and may not be offered, sold or
resold within the United States,
or to or for the account or benefit of any U.S. person, unless the
securities are registered under the U.S. Securities Act, or an
exemption from the registration requirements of the U.S. Securities
Act is applicable. This news release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities of
the Company, nor shall there be any sale of securities of the
Company, in the United States in
which such offer, solicitation or sale would be unlawful.
About Frankly Media
Frankly Media provides a complete suite of solutions that give
publishers a unified workflow for the creation, management,
publishing and monetization of digital content to any device, while
maximizing audience value and revenue.
Frankly's products include a groundbreaking online video
platform for Live, VOD and Live-to-VOD workflows, a full-featured
CMS with rich storytelling capabilities, as well as native apps for
iOS, Android, Apple TV, Fire TV and Roku.
Frankly also provides comprehensive advertising products and
services, including direct sales and programmatic ad support. With
the release of its server-side ad insertion (SSAI) platform, the
company has been positioned to help video producers take full
advantage of the growing market in addressable advertising. The
company is headquartered in New
York with offices in Atlanta. Frankly Media is publicly traded
under ticker TLK on Canada's TSX
Venture Exchange. For more information, visit
www.franklymedia.com
Cautionary Statement on Forward-Looking Information
This news release contains forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Frankly to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. These forward-looking
statements include, but are not limited to, statements relating to
our expectations with respect to: the Offering, the Torque Loan,
and their respective terms and conditions, and the expected timing
to complete the Offering and the Torque Loan. Often, but not
always, forward‑looking statements can be identified by the use of
words such as "plans", "expects" or "does not expect", "is
expected", "estimates", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved. In
respect of the forward-looking statements and information made in
this news release, Frankly has provided such statements and
information in reliance on certain assumptions that they believe
are reasonable at this time, including assumptions based on the
progress and expected timing to enter into definitive documentation
in respect of the Transaction, expectations concerning the timing
of completing the Offering and Torque Loan and obtaining required
approvals. There can be no assurance that any of the Transaction,
the Offering or the Torque Loan will occur, or that any of those
events will occur on the terms and conditions contemplated in this
news release. Any of the Transaction, or the Offering and Torque
Loan could be modified, restructured or terminated. Accordingly,
readers should not place undue reliance on the forward-looking
statements and information contained in this press release.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks, including but not limited to the following: the risk that
the parties are unable or unwilling to enter into a definitive
agreement with respect to the Transaction for any reason and the
risk that the Offering and/or the Torque Loan may not be completed
for any reason. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on other factors
that could affect the operations or financial results of the
parties are included in reports on file with applicable securities
regulatory authorities.
The forward-looking statements contained in this news release
are made as of the date of this release and, accordingly, are
subject to change after such date. Frankly does not assume any
obligation to update or revise any forward-looking statements,
whether written or oral, that may be made from time to time by
Frankly or on its behalf, except as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/frankly-inc-announces-non-brokered-private-placement-of-units-comprised-of-convertible-debentures-and-warrants-300994173.html
SOURCE Frankly Media
