Conversion of significant debt to equity and
extension of short-term note delivers significantly improved debt
position for the company as it looks forward to the year ahead
Loop Media, Inc. (NYSE American: LPTV) (“Loop Media”), the free
streaming television media company for businesses which provides
over 2 billion video views every month via restaurants, retail
businesses, office buildings, doctors’ offices, airports, bars and
college campuses, has converted approximately $4.4 million of
short-term debt and accrued interest into 6,005,487 shares of Loop
Media common stock, at a conversion price of $0.74 per share – a
premium to the closing price of Loop Media’s common stock on NYSE
American on September 11, 2023 of $0.535 per share. In addition,
Loop Media has also rolled over approximately $2.3 million of
short-term indebtedness due in September 2023 into Loop Media’s
$4.0 million line of credit due in May 2025. These steps are
intended to help shore up Loop Media’s balance sheet as it moves
forward into its new fiscal year starting October 1, 2023, by
eliminating $4.4 million of indebtedness on the balance sheet and
moving $2.3 million of short-term debt into long-term debt. These
transactions eliminate 6.7 million of short-term debt from Loop
Media’s balance sheet, which constitutes a majority of Loop’s
short-term debt.
“Last week, we held an extensive board session, annual budget
meeting and business review for the challenges experienced over the
last few quarters, as well as the business plan and expectations
for fiscal 2024, and despite a challenging 2023, I am confident in
Loop Media’s business model and management team. To evidence that
confidence and to further support our business and all shareholders
and other stakeholders, I have gladly agreed to support Loop and
improve its debt position by converting a significant amount of
debt due to myself and affiliated parties into equity as well as
extending other short-term debt into longer term debt.” said Bruce
Cassidy, Chairman of Loop Media, Inc. “While the recent declines in
our share price is not a welcomed development, I am confident in
the fundamentals of the business, the overall opportunity and the
steps being taken by management to reduce costs and strengthen the
business as we seek to maintain and improve growth,” Mr. Cassidy
continued.
“We appreciate the support of our Chairman and the rest of our
board after their review of our growth plans for the coming year.
Our team intends to focus on implementing our business plan and
continue to seek opportunities to grow our business while focusing
on strengthening the bottom line,” said Jon Niermann, CEO and
Co-founder. “We believe that fiscal year 2024 will provide some
unique opportunities for us, and that through the implementation of
our business plan, we can achieve both top and bottom line
growth.”
In addition to the conversion of debt into equity and extending
the due date of certain of our short-term debt, Loop Media has
further tightened cost control and has identified certain areas for
further reductions in our SG&A for fiscal 2024, all while
maintaining our commitment to the growth of its revenue and
platform distribution. Senior Management of Loop Media is dedicated
to the business and its stakeholders and has agreed to
significantly reduce their salaries for the time being. In
addition, no management bonuses will be paid for fiscal 2023 and
several cost centers will be reduced in size while sales, revenue
and marketing will continue to aggressively expand and push forward
with the strategic plans where it makes sense to do so.
On September 12, 2023, Loop Media and Excel Family Partners,
LLLP (“Excel”) entered into a Note Conversion Agreement, pursuant
to which Excel agreed to convert $4.4 million of short-term debt,
including interest, under the Loop Media non-revolving line of
credit agreement entered into on April 25, 2022 (the “Excel 2022
Debt"), into 6,005,487 shares of Loop Media common stock at a per
share price of $0.74. Loop Media and Excel also entered into a Pay
Off Letter Agreement on September 12, 2023, pursuant to which Loop
Media paid off $2.27 million of short-term debt plus accrued
interest due September 28, 2023, under Loop Media’s secured
non-revolving line of credit loan agreement, entered into on May
31, 2023 (the “Excel 2023 Debt”). Excel agreed to convert this
amount into longer term debt due May 10, 2025, under the secured
non-revolving line of credit loan agreement entered into on May 10,
2023, between Loop Media and various lenders, including Excel (the
“2025 LOC”). As a result of these transactions, the $6.7 million in
principal and interest aggregate indebtedness under the Excel 2022
Debt and the Excel 2023 Debt will be extinguished and indebtedness
under the 2025 LOC will be increased by $2.27 million. Under the
terms of the 2025 LOC, Excel will also be issued a warrant to
purchase 209,398 shares of Loop Media common stock. The warrant has
an expiration date of May 10, 2026, and is exercisable immediately
at an exercise price of $4.33 per share. After these transactions,
outstanding principal amount of indebtedness under the 2025 LOC
will be $3.17 million.
The offer and sale of the securities described above are being
offered in a private placement under Section 4(a)(2) of the
Securities Act of 1933, as amended (the “Securities Act”), and
Regulation D promulgated thereunder and, along with the shares of
common stock underlying the warrants, have not been registered
under the Securities Act, or applicable state securities laws.
Accordingly, the securities issued in the private placement and the
shares of common stock underlying the warrants may not be offered
or sold in the United States except pursuant to an effective
registration statement or an applicable exemption from the
registration requirements of the Securities Act and such applicable
state securities laws.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any of the securities described
herein, nor shall there be any sale of these securities in any
state or other jurisdiction in which such an offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such state or other jurisdiction.
About Loop Media, Inc.
Loop Media, Inc. (“Loop Media”) (NYSE American: LPTV) is a
leading digital out of home (“DOOH”) TV and digital signage
platform optimized for businesses, providing free music video,
news, sports, and entertainment channels through its Loop TV
service. Loop Media is the leading company in the U.S. licensed to
stream music videos to businesses through its proprietary Loop
Player.
Loop Media’s digital video content reaches millions of viewers
in DOOH locations including bars/restaurants, office buildings,
retail businesses, college campuses, airports and on free
ad-supported TV platforms and at local gas stations on GSTV
terminals in the United States.
Loop is fueled by one of the largest and most important short
form entertainment libraries that includes music videos, movie
trailers and live performances. Loop Media’s non-music channels
cover a multitude of genres and moods and include movie trailers,
sports highlights, lifestyle and travel videos, viral videos and
more. Loop Media’s streaming services generate revenue from
advertising, sponsorships, and from subscriptions.
To learn more about Loop Media products and applications, please
visit us online at Loop.tv
Follow us on social:
Instagram: @loopforbusiness
X (Twitter): @loopforbusiness
LinkedIn: https://www.linkedin.com/company/loopforbusiness/
Safe Harbor Statement and Disclaimer
This news release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including, but not limited to, Loop Media’s expected 2023
results, ability to compete in the highly competitive markets in
which it operates, statements regarding Loop Media’s ability to
develop talent and attract future talent, the success of strategic
actions Loop Media is taking, and the impact of strategic
transactions. Forward-looking statements give our current
expectations, opinion, belief or forecasts of future events and
performance. A statement identified by the use of forward-looking
words including "will," "may," "expects," "projects,"
"anticipates," "plans," "believes," "estimate," "should," and
certain of the other foregoing statements may be deemed
forward-looking statements. Although Loop Media believes that the
expectations reflected in such forward-looking statements are
reasonable, these statements involve risks and uncertainties that
may cause actual future activities and results to be materially
different from those suggested or described in this news release.
Investors are cautioned that any forward-looking statements are not
guarantees of future performance and actual results or developments
may differ materially from those projected. The forward-looking
statements in this press release are made as of the date hereof.
Loop Media takes no obligation to update or correct its own
forward-looking statements, except as required by law, or those
prepared by third parties that are not paid for by Loop Media. Loop
Media’s SEC filings are available at www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230913476401/en/
Loop Media Press Contact – PhillComm Global PR Agency Jon
Lindsay Phillips jon@phillcomm.global
Investor Relations – Loop Media ir@loop.tv
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