TIDMBOOM
RNS Number : 3837M
Audioboom Group PLC
27 April 2018
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR")
27 April 2018
Audioboom Group plc
("Audioboom" or the "Company")
Update on Proposed Acquisition and current trading
Issue of new GBP1m convertible loan note
Related party transaction with Candy Ventures SARL
The Board ("Board") of Audioboom (AIM: BOOM), the leading spoken
word audio on-demand platform, announces that, further to its
announcement on 13 February 2018, the process in respect of the
Company's proposed acquisition (the "Proposed Acquisition") of the
entire issued share capital of Triton Digital Canada Inc ("Triton")
and the associated fundraise (the "Acquisition Placing") continues.
However, at this stage there can be no certainty that the Proposed
Acquisition and the Acquisition Placing will complete. Furthermore,
the structure and terms of the Proposed Acquisition and the
Acquisition Placing will be different from those outlined in the
announcement of 13 February 2018.
The Company's ordinary shares of no par value ("Ordinary
Shares") will remain suspended from trading on AIM until such time
as either an admission document in respect of the Proposed
Acquisition is published or an announcement is released confirming
that the Proposed Acquisition is not proceeding. The Board expects
to be in a position to make a further announcement in these
respects within the next three weeks.
Convertible Loan Note
As highlighted in its announcement on 13 February 2018, as a
result of the Proposed Acquisition and the Acquisition Placing not
having yet completed, the Company requires further financing in the
short-term for working capital purposes, including certain of the
transaction costs incurred to date associated with the Proposed
Acquisition.
In this regard, Candy Ventures SARL ("Noteholder") has agreed to
subscribe for up to GBP1,000,000 of convertible loan notes
("Convertible Loan Notes") which have been created pursuant to a
loan note instrument ("Instrument"). The Convertible Loan Notes
attract interest at a rate of 10% per annum which is payable on the
redemption, repayment or conversion of the Convertible Loan Notes.
During the term of the loan, if the Noteholder so requires, the
Convertible Loan Notes will be secured by a fixed and floating
second charge over all the undertakings and assets of
Audioboom.
The Convertible Loan Notes, including the total amount of
accrued but unpaid interest, are convertible at the conversion
prices (as detailed below) in whole (but not part) into fully paid
Ordinary Shares:
-- automatically on (i) completion of the Proposed Acquisition
(provided that is on or before 30 June 2018) or (ii) the completion
of the fundraising next following the date of the Instrument (and
prior to 30 June 2018), pursuant to which Audioboom raises over
GBP3,000,000 in one transaction from the issue of new Ordinary
Shares to any person(s) (excluding the conversion of any
Convertible Loan Notes into Ordinary Shares and excluding any
fundraising in connection with the Proposed Acquisition) (a
"Relevant Fundraising"); and
-- at the election of the Noteholder at any time after 30 June
2018, if the Proposed Acquisition or a Relevant Fundraising has not
completed by that date.
If the Proposed Acquisition completes on or before 30 June 2018,
then the principal amount drawn down under the Convertible Loan
Notes will be converted into new Ordinary Shares at the same price
at which new Ordinary Shares are issued to investors pursuant to
the Acquisition Placing.
If the Proposed Acquisition does not complete on or before 30
June 2018 and a Relevant Fundraising is completed by such date, the
conversion price will be the higher of:
-- 2p; and
-- a price equivalent to 65% of the price at which new Ordinary
Shares are issued to investors pursuant to the Relevant
Fundraising
provided that, if the Relevant Fundraising is at a price less
than 2p per share, the conversion price will equal the Relevant
Fundraising price.
If neither the Proposed Acquisition nor a Relevant Fundraising
is completed on or before 30 June 2018, the Convertible Loan Notes
will only be convertible at the election of the Noteholder and at a
conversion price of 2p.
An arrangement fee of GBP50,000 is due and payable by the
Company to the Noteholder on the signing of the Instrument and this
will be deducted from the amount available for drawdown. In
addition, the Company will pay GBP2,500 of the Noteholder's legal
costs associated with the Convertible Loan Notes.
Pursuant to the terms of the Instrument, the Noteholder will
subscribe for the Convertible Loan Notes in accordance with a
drawdown schedule to be agreed between the parties, with an
expectation that all notes will be subscribed for within four weeks
of the date of the Instrument. If the Proposed Acquisition
completes, the obligation of the Noteholder to subscribe for
Convertible Loan Notes which have not at that date fallen due for
subscription will lapse.
The obligation of the Noteholder to subscribe for the
Convertible Loan Notes is subject to there being no event of
default having occurred, and which is continuing, on the due date
for payment of any subscription for Convertible Loan Notes. The
Noteholder's conversion rights are limited to the extent that the
Company has adequate shareholder authority to convert.
Unless the Noteholder has given prior notice to convert, the
Convertible Loan Notes will be repaid immediately prior to the
completion of an offer or agreement pursuant to which any person or
those acting in concert acquires the whole of the ordinary share
capital of Audioboom or a controlling interest in the share capital
of Audioboom. For these purposes a controlling interest means
shares conferring in the aggregate 50% or more of the total voting
rights conferred by all the shares in the capital of Audioboom in
issue and conferring the right to vote at all general meetings of
Audioboom.
To the extent they have not been previously converted or
redeemed, the Convertible Loan Notes, and all applicable interest,
are immediately due and repayable at par on certain customary
events of default occurring. Unless previously repaid or converted,
the Convertible Loan Notes will be redeemed at par by Audioboom on
the date falling six months after the date of the Instrument. In
addition, Audioboom has the right to prepay any of the Notes on 5
business days' prior notice in writing to the Noteholder.
While the Company has issued the Convertible Loan Notes to
provide short-term working capital, if the Proposed Acquisition and
the Acquisition Placing do not proceed, the Company will require
further financing in the short-term. In this regard, the proceeds
from the Convertible Loan Notes are expected to provide the Company
with sufficient working capital for a period of up to six weeks,
although the Company would take appropriate cash management
measures to seek to extend such period if required. If sufficient
further equity funding is not available in the required time
horizon then, in the absence of alternative funding options, the
Board considers that it would likely need to take actions to
protect the interest of creditors, which may result in the ultimate
winding up of the Company. However, the Board is confident that if
further funding is required in these circumstances, it will be
available and the Board will take such action as is required should
the need arise.
Related Party Transaction
Candy Ventures SARL will be the Noteholder. Candy Ventures SARL
is a substantial shareholder of Audioboom, having an interest in
approximately 13% of the voting rights of Audioboom, and is
therefore a related party of Audioboom as defined by the AIM Rules.
Nick Candy (90% shareholder of Candy Ventures SARL) is also
considered to be a related party of Audioboom by reason of his
shareholding in Candy Ventures SARL. Steven Smith, a director of
the Company, is also a director and 10% shareholder of Candy
Ventures SARL and accordingly he too is a related party of
Audioboom.
As such, the Instrument constitutes a related party transaction
pursuant to AIM Rule 13. The directors of Audioboom (with the
exception of Steven Smith) consider, having consulted with
Audioboom's nominated adviser, Allenby Capital Limited, that the
terms of the Instrument are fair and reasonable insofar as
Audioboom's shareholders are concerned.
Trading update
In its year end update announced on 18 December 2017, Audioboom
stated that revenues for the twelve months to 30 November 2017 were
expected to exceed GBP4.8 million (2016: GBP1.3 million) and that
an underlying EBITDA loss of GBP4.5 million was expected (including
certain one-off transactional and legal costs, which totalled over
GBP0.2 million). If these costs were excluded, it was anticipated
that the adjusted EBITDA loss for the year would be GBP4.3 million.
The Company now expects that revenues for the twelve months to 30
November 2017 will be GBP4.7 million, the underlying EBITDA loss
will be approximately GBP4.6 million and the adjusted EBITDA loss
for the year will be approximately GBP4.4 million.
In the first quarter of 2018 (November 2017 - February 2018),
the Company's KPIs have demonstrated significant growth compared to
the same period in 2017:
-- Unique file requests ("UFRs"): Q1 2018 UFRs totaled 181
million, compared to 149 million in Q1 2017, an increase of over
20% despite changes to how Audioboom now measures UFRs which has
impacted the latest total. The changes reflect Audioboom continuing
to take the lead on transparency and best practice in industry
reporting
-- Monthly unique users: 82.3 million for February 2018,
compared to 58.4 million for February 2017, an increase of over
40%
-- Available advertising impressions: Audioboom created a total
of 633 million advertising impressions in the quarter, up from 304
million in the same period last year, an increase of over 100%. The
"live read" inventory element of this total continues to show
impressive growth with a total of 235 million, up more than 12%
quarter on quarter (Q4 2017: 209 million)
-- Content channels: Audioboom hosted 12,948 content channels as
at 28 February 2018, an increase of approximately 30% on the prior
year (28 February 2017: 10,005). Continued growth in content
channels is particularly encouraging given the Company's
implementation of paid subscriptions for smaller podcasts that are
not suitable for monetisation through advertising
The rationalisation of non-profitable channels, together with
the aforementioned change to how UFRs are measured, has resulted in
some reduction in monthly unique users and UFRs in Q1 2018 compared
to Q4 2017, against a significant increase in "live read" available
advertising inventory. The Board believes that this demonstrates
the Company's determination to reduce costs whilst improving
overall efficiency.
Trading for the quarter remained in line with the Board's
expectations in respect of revenue and underlying EBITDA (adjusted
for the costs of the Proposed Acquisition and Acquisition Placing).
Subject to the positive trading seen in the first quarter being
sustained in the second and third quarters, the Board expects to
see significant growth in revenue for 2018 compared to 2017.
Enquiries:
Audioboom Group plc
Rob Proctor, Chief Executive Officer Tel: +44(0)20 7403 6688
Allenby Capital Limited (Nominated adviser Tel: +44(0)20 3328 5656
and joint broker)
David Hart / Alex Brearley / Asha Chotai
Cenkos Securities plc (joint broker Tel: +44(0)20 7397 8900
to the Acquisition Placing)
Stephen Keys / Mark Connelly / Callum
Davidson / Nick Searle
Zeus Capital Limited (joint broker to Tel: +44(0)20 3829 5000
the Acquisition Placing)
Nicholas How / Ben Robertson / Richard
Short / John Goold
Walbrook PR Limited (PR & IR Advisers) Tel: +44(0)20 7933 8780
Paul Cornelius / Sam Allen or audioboom@walbrookpr.com
About Audioboom
Audioboom is a global podcasting platform that consolidates the
business of on-demand audio, making content accessible,
wide-reaching and profitable for podcasters, advertisers and
brands. Audioboom operates internationally, with operations across
North America, Europe, Asia, Australia and Latin America, and
addresses the issue of disparate podcast services by putting all of
the pieces of the puzzle together under one umbrella, creating a
user-friendly, economical experience.
Audioboom hosts more than 12,000 content channels, with key
content partners including Associated Press (US), "Athletico Mince"
(UK), The BBC (UK), Edith Bowman (UK), "The Heart of It with Estée
Lalonde" (UK), India Today (India), "News Roast" (UK), "No Such
Thing As A Fish" (UK), Red FM (India), "The Totally Football Show"
(UK), "Untold: The Daniel Morgan Murder" (UK), and "Undisclosed"
(US).
Original content produced by Audioboom includes "The 45th" (US),
"I Almost Knew That" (India), "Corinne Bailey Rae: The Heart Speaks
in Whispers" (UK), "Ctrl Alt Win Podcast" (India), "Deliberations"
(US), "InBox (US), "It's Happening with Snooki & Joey" (US),
"Mission To Zyxx" (US), "The Russell Brand Podcast" (UK) and "Very
Bad Words" (US).
The platform receives over 60 million listens per month and
allows partners to share their content via Apple Podcasts,
BookMyShow, Deezer, Google Play, iHeartRadio, Saavn, Spotify,
Stitcher, Facebook and Twitter as well as their own websites and
mobile apps.
For more information on Audioboom visit audioboom.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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