TIDMBOOM
RNS Number : 0393O
Audioboom Group PLC
15 May 2018
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR")
15 May 2018
Audioboom Group plc
("Audioboom" or the "Company")
Withdrawal from proposed acquisition
Continuing suspension of trading pending further fundraising
The Board ("Board") of Audioboom (AIM: BOOM), the leading spoken
word audio on-demand platform, announces that, further to its
announcements on 13 February 2018 and 27 April 2018, the Company's
proposed acquisition (the "Proposed Acquisition") of the entire
issued share capital of Triton Digital Canada Inc ("Triton") will
not be proceeding.
The Proposed Acquisition was to be funded, inter alia, by a
placing of new ordinary shares in the Company (the "Placing").
However, in spite of significant demand, it has not been possible
to complete the Placing.
Continuing suspension of trading
The Proposed Acquisition would have constituted a reverse
takeover under the AIM Rules. As a result, and in accordance with
Rule 14 of the AIM Rules, the Company's ordinary shares were
suspended from trading on AIM on 13 February 2018.
As a result of the Proposed Acquisition and the Placing not
proceeding, the Company requires further financing in the
short-term for investment in additional podcasting content and
working capital purposes. The Company announced on 27 April 2018
that it had issued convertible loan notes amounting to GBP1,000,000
to Candy Ventures SARL to assist in this regard. However, given the
commercial opportunities that the Company has been working on in
recent months, and the additional requirement for working capital,
further equity funding will be required as soon as possible. The
proceeds from the convertible loan notes will only provide the
Company with sufficient working capital for a further period of up
to four weeks from today's date, although the Company would take
appropriate cash management measures to seek to extend such period
if required. As a result, the Company's financial position remains
uncertain pending the successful completion of the further equity
funding. Therefore, the Company has requested that its ordinary
shares remain suspended from trading on AIM pending clarification
over the Company's financial position.
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. The Board is confident that
further funding will be available and it has commenced immediate
action in this respect.
Break Fee
As set out in the Company's announcement on 13 February 2018,
the Company is party to an offer letter (the "Offer Letter") with
Triton and Triton's controlling shareholder, Vector Triton Holdings
(Cayman) 2, L.P. ("Vector"), in respect of the Proposed
Acquisition. The Offer Letter contains binding provisions in
respect of the payment of fees if the parties withdraw from the
Proposed Acquisition under certain circumstances. Following its
withdrawal from the Proposed Acquisition for the reason set out
above, the Company is obliged to pay a break fee (the "Break Fee")
to Triton or Vector. The Break Fee is GBP700,000 and is required to
be satisfied by 13 June 2018 as to GBP90,000 in cash and the
balance by the allotment and issue to Triton or its shareholders of
16,600,000 ordinary shares of Audioboom deemed fully paid up. The
ordinary shares issued will be subject to a three-month lock-in
period on market standard terms and any sales of ordinary shares
must be on an orderly market basis through Audioboom's brokers
(provided they provide market competitive terms).
Application will be made for 16,600,000 ordinary shares in
Audioboom to be admitted to trading on AIM in due course following
the restoration of trading in the Company's ordinary shares.
Other information
In the Company's announcement of 13 February 2018 regarding the
Proposed Acquisition, it was highlighted that in conjunction with
the Proposed Acquisition, the Company intended to make certain
changes to its Board structure, including the appointment of new
executive and non-executive directors. These changes will now not
occur. Rob Proctor, the current Chief Executive Officer of the
Company, will remain in this role.
In addition, the Company announces the appointment of a new
Chief Financial Officer, Brad Clarke. Mr Clarke is a Chartered
Accountant, having qualified with Grant Thornton in 2009. He has
extensive experience of working in finance in the media industry
and joins from fellow AIM listed company Brave Bison Group plc,
where he was Group Finance Director. Brad previously worked for
News UK for over five years progressing through roles in Internal
Audit, Group Reporting and latterly being the Financial Controller
of the Handpicked Collection. It is proposed that he may join the
Board in due course and a further announcement would be made at
that time.
Further, the Company will not be performing a consolidation of
its ordinary shares at this time and the name of the Company will
remain Audioboom Group plc.
Given that the Company will continue to derive the majority of
its revenues in US Dollars yet currently reports its results in
Sterling, the Board still proposes that the Company move to
reporting in US Dollars for the year ending 30 November 2018. The
results for the year ended 30 November 2017 will be reported in
Sterling.
The Company provided a trading update and its key performance
indicators for the first quarter of the year ending 30 November
2018 in its announcement of 27 April 2018.
Audioboom strategy
In line with its previously stated strategy, Audioboom is
committed to attracting the best-established podcasts and
podcasters to its platform. Top tier podcasts allow Audioboom to
maximise revenue returns by exploiting its now proven in-read
advertising sales channels. In order to implement such a strategy,
Audioboom will likely be required to provide minimum guarantees
against annual revenue potential and advances and signing fees, in
addition to promotional and development budgets.
Additionally, Audioboom will continue to roll out its Audioboom
Original productions, thus enhancing its long-term IP position and
improving its overall gross margins.
Geographically Audioboom is fully committed to growing its
market share in its key markets of the USA and UK, whilst
continuing to develop strong local partnerships in Germany, France,
India and Australia.
Rob Proctor, CEO of Audioboom, commented: "Whilst the Board is
naturally disappointed that we were unable to raise the necessary
funds to complete the Proposed Acquisition, I am pleased to report
that our efforts to consolidate our customer base and attract more
commercially viable podcasts are progressing well, with a growing
proportion of our overall inventory being focussed on the lucrative
in-read advertising space. The further reduction in the number of
smaller, unsustainable podcasts on our platform will allow us to
further reduce our monthly operating costs. Overall Audioboom
continues to run a tighter, more compact operation, which will
ultimately lead to a stronger more vibrant business. I look forward
to updating shareholders in the near future with regards to the
Company's proposed further equity fundraising."
Enquiries:
Audioboom Group plc
Rob Proctor, Chief Executive Tel: +44(0)20 7403
Officer 6688
Allenby Capital Limited (Nominated Tel: +44(0)20 3328
adviser and broker) 5656
David Hart / Alex Brearley
/ Asha Chotai
Walbrook PR Limited (PR & IR Tel: +44(0)20 7933
Advisers) 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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