LONG ISLAND CITY, N.Y.,
May 4, 2018 /CNW/ -- Frankly
Inc. (TSX VENTURE: TLK) ("Frankly" or the "Company") intends to
settle an outstanding cash debt of USD $597,523.50 owed to certain employees and former
employees of Frankly pursuant to an employee retention plan entered
into on October 19, 2017 (the
"Retention Plan") through the issuance of 288,651 common
shares in the capital of Frankly ("Common Shares") at a
deemed price of USD $2.07 (CDN
$2.52) per Common Share (the
"Transaction"). The deemed price per Common Share is the
closing trading price of the Common Shares on the TSX Venture
Exchange ("TSXV") on the date prior to the date the board of
directors of Frankly resolved to implement the Retention Plan. The
Company entered into the Retention Plan in connection with its
previously announced strategic process. Completion of the
Transaction is subject to obtaining necessary regulatory approvals,
including acceptance of the TSXV. Frankly is choosing to settle the
outstanding indebtedness through the issuance of Common Shares to
preserve its funds for forward operations.
Background to the Transaction
On October 19, 2017, Frankly
entered into the Retention Plan to induce selected key contributors
to remain employed with Frankly and to enhance Frankly's value
during the strategic process by providing the participants in the
Retention Plan incentive benefits to help assure the success of any
strategic transaction. The Retention Plan entitled its participants
to certain cash and securities-based payments in the event the
participants remained employed with Frankly through February 15, 2018.
Related Party Transaction
The Transaction constitutes a related party transaction for
Frankly pursuant to Multilateral Instrument 61-101 - Protection
of Minority Security Holders in Special Transactions ("MI
61-101"), as certain participants eligible to receive Common
Shares in the Transaction are senior officers, and therefore
related parties, of Frankly.
Frankly is exempt from the requirements to obtain a formal
valuation for the Transaction pursuant to section 5.5(b) of MI
61-101 - Issuer not Listed on Specified Markets, as Frankly
is not listed or quoted on any of the Toronto Stock Exchange, the
New York Stock Exchange, the American Stock Exchange, the NASDAQ
Stock Market, or a stock exchange outside of Canada and the
United States other than the Alternative Investment Market
of the London Stock Exchange or the PLUS markets operated by PLUS
Markets Group plc. The Transaction is also exempt from the minority
approval requirement of MI 61-101 pursuant to section 5.7(a) of MI
61-101 - Fair Market Value Not More Than 25% of Market
Capitalization, as the fair market value of the subject of the
Transaction and the consideration paid in the Transaction, in both
cases as in relation to the interested parties, is less than 25% of
the market capitalization of Frankly.
Frankly expects to file a material change report in respect of
the Transaction less than 21 days prior to the closing of the
Transaction, which Frankly deems reasonable in the circumstances so
as to be able to satisfy the obligations due under the Retention
Plan in an expeditious manner.
About Frankly
Frankly (TSX VENTURE: TLK) builds an integrated software
platform for media companies to create, distribute, analyze and
monetize their content across all of their digital properties on
web, mobile and TV. Its customers include NBC, ABC, CBS and FOX
affiliates, as well as other leading media organizations. Frankly
is headquartered in New York.
To learn more, visit www.franklyinc.com.
Neither the 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.
Notice Regarding Forward-Looking Statements
This release includes forward-looking statements regarding
Frankly and its business. Forward-looking information is generally
identifiable by use of the words "believes," "may," "plans,"
"will," "anticipates," "intends," "could", "estimates", "expects",
"forecasts", "projects" and similar expressions, and the negative
of such expressions. Forward-looking statements in this release
include, without limitation, Frankly's intention to complete the
Transaction as described in this release and the ability of Frankly
to obtain TSXV approval. Forward-looking events and circumstances
discussed in this release may not occur in any expected timeframes
or at all. The actual results of circumstances could differ
materially from any forward-looking statement as a result of known
and unknown risk factors and uncertainties affecting
Frankly.
Forward-looking information is based on assumptions,
estimates, analysis and opinions of management that it believes to
be relevant and reasonable in light of its experience and
perception of trends, current conditions and expected developments,
and other circumstances as of the date such statements are made.
Although Frankly has attempted to identify important factors that
could cause actual results to differ materially from those
contained in any forward-looking statement, there may be other
factors that cause results not to be as anticipated.
No forward-looking statement can be guaranteed and
accordingly, readers should not place undue reliance on
forward-looking information. Except as required by
applicable securities laws, forward-looking statements speak only
as of the date on which they are made and Frankly undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
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SOURCE Frankly Inc.