VANCOUVER, BC, Feb. 14,
2023 /CNW/ - BBTV Holdings Inc. (TSX: BBTV) (the
"Company"), a media tech company that uses technology enabled
solutions to help content creators and influencers become more
successful, is pleased to announce it has closed a US$16.1 million senior secured term loan (the
"Term Loan") from MEP Capital Holdings III, L.P. ("MEP"), an arm's
length investment capital firm based in New York.
The Company intends to use the proceeds of the Term Loan for
working capital and to pay off the Company's CAD overdraft facility
with a Canadian chartered bank.
Shahrzad Rafati, CEO of BBTV
said: "We plan to apply this additional liquidity to support our
path to profitability as we execute our organic growth strategies.
Since our IPO, we have invested to diversify our revenue streams,
particularly our Plus Solutions as they've proven to pay off with
strong growth. These investments position us uniquely to continue
leading the creator industry during uncertain markets. Our funding
partner, MEP Capital, also believes in the strength of our
diversified business going forward."
BBTV's Content Management business has been a prominent
contributor to the 40% revenue growth for the Company's Plus
Solutions over the last 12 months as of September 2022. In Q4 2022, BBTV signed
agreements with premier Hispanic Mixed Martial Arts (MMA) Sports
Franchise, Combate Global, and Wondery, Amazon's subsidiary podcast
network. The Company's pipeline of opportunities for Content
Management with major publishers has never been stronger.
KB Brinkley, CFO of BBTV commented: "Based on our forecasts,
through various sources of capital, we have assembled fresh
liquidity to meet our strategic objectives for the foreseeable
future while minimizing shareholder dilution. We believe that we
have also allocated additional cushion to help withstand future
macroeconomic uncertainty if it materializes along our path to
profitability."
The Term Loan bears interest at 16% per annum and matures on the
4th anniversary of the closing date of the Term Loan.
Interest is payable on a quarterly basis, with the principal
payable upon maturity. Ten million one hundred thousand (US
$10.1 million) of the Term Loan is
committed, with US $6 million being
conditional upon a performance target related to the Company's top
Base Solution Channels and Content Management business being met
for H1 2023 (the "Performance Target"). The conditional US
$6 million will nonetheless be
advanced on the closing date and interest will accrue on it from
such date.
The Term Loan is secured by a perfected, sole first-priority
security interest in all tangible and intangible assets of the
Company and its Canadian and U.S. wholly-owned subsidiaries, now
existing or acquired (the "Loan Security"), subject to certain
carve-outs or pari passu rights in favour of UFA Film und
Fernseh GmbH ("UFA") which holds a convertible promissory note from
the Company due May 26,
2026. MEP and UFA entered into an intercreditor
agreement providing, among other things, for the priorities of the
two lenders with respect to the Loan Security. All of the Company's
active direct and indirect wholly-owned subsidiaries acted as
co-borrowers of the Term Loan.
In connection with the Term Loan the Company issued MEP a share
purchase warrant (a "Warrant") to purchase in aggregate that number
of Subordinate Voting Shares that is equal to 2% of the Company's
fully diluted Subordinate Voting Shares as determined on the
"Warrant Share Calculation Date" (see further details below),
provided that MEP shall not be permitted to exercise the Warrant to
acquire beneficial ownership of, or control or direction over,
securities of the Company carrying more than 9.9% of voting rights
attached to the Company's outstanding voting securities. The
Warrant Share Calculation Date is (a) the date MEP determines to
exercise the Warrants; (b) the date of conversion of the first of
the Company's securities convertible into Subordinate Voting Shares
on a non-fixed price basis that results in one percent (1.0%) or
more of such Subordinated Voting Shares being issued and
outstanding on a fully-diluted basis, and (c) the closing date of
the Company's next equity financing for not less than US$5 million
led by a non-affiliated reputable investor. The Warrants are
exercisable at CAD$0.01 per Subordinate Voting Share for a period
of 8 years, with the Warrants being exercisable at the option of
the holder on a cashless basis. The Warrants entitle MEP to
certain standard anti-dilution protections for reclassification and
corporate reorganizations. In the event the Performance Target is
not met, then the number of Subordinate Voting Shares issuable upon
exercise of the Warrants will be reduced to 1% of the Company's
fully diluted Subordinate Voting Shares. The Warrants and the
Subordinate Voting Shares issuable upon exercise of the Warrants
are subject to a four month hold period from the date of closing in
accordance with applicable Canadian securities laws and a hold
period under applicable United States securities laws.
About BBTV
BBTV is a global media and technology company headquartered in
Vancouver, Canada. The Company's
mission is to help content creators become more successful. With
creators ranging from individuals to global media brands, the
Company provides comprehensive, end-to-end Solutions to increase
viewership and drive revenue powered by its innovative technology,
while allowing creators to focus on their core competency – content
creation. In December 2021, the
Company had the fourth most unique monthly viewers among digital
platforms with more than 600 million globally, who consumed more
than 35 billion minutes of video content [1].
(www.bbtv.com)
[1] Calculations and classifications made by the Company based
on data from Comscore's "Top 12 Countries = December 2021 comScore Video Metrix Media Trend –
Multi-Platform – Top 100 Video Properties Report"; Top 12 countries
represent ~50% of world's digital population.
Links to SEDAR filings, conference call recordings and press
releases are available on the investor website at:
https://investors.bbtv.com/
About MEP Capital
MEP Capital is an investment firm focused on opportunities in
the media and entertainment industries, providing support to the
creative community. Across digital media, music, film &
television, gaming, and live events, MEP partners with leading
industry operators to finance projects, acquire assets, and invest
in businesses. MEP invests through long-term oriented funds, with
committed capital from institutions, family offices, and
high-net-worth individuals. Learn more at http://www.mepcap.com
For further information please contact:
Media Relations: pr@bbtv.com
Investor Relations: ir@bbtv.com
Forward-looking Statements
This press release contains "forward–looking information" and
"forward-looking statements" within the meaning of applicable
securities laws (collectively, "forward-looking information").
Forward-looking information is not information about historical
facts but instead represents the Company's intentions, beliefs,
plans, goals, objectives and strategies regarding future events and
results. Forward-looking information contained in this press
release includes, without limitation, that the Company's pipeline
of opportunities for Content Management with major publishers has
never been stronger; based on our forecasts, through various
sources of capital, we have assembled fresh liquidity to meet our
strategic objectives for the foreseeable future while minimizing
shareholder dilution; we believe that we have also allocated
additional cushion to help withstand future macroeconomic
uncertainty if it materializes along our path to profitability; in
the event the Performance Target is not met, then the number of
Subordinate Voting Shares issuable upon exercise of the Warrants
will be reduced to 1% of the Company's fully diluted Subordinate
Voting Shares; and the Company's intent to use the proceeds
of the Term Loan for working capital and to pay-out the Company's
CAD overdraft facility with a Canadian chartered bank.
Forward-looking information is necessarily based on a number of
estimates and assumptions that the Company considered appropriate
and reasonable as of the date such information is given, including
but not limited to the assumptions that the Company's pipeline of
opportunities for Content Management with major publishers will
translate into some additional Content Management clients for the
Company on a profitable basis for the Company; our forecasts for
meeting our strategic objectives are accurate; the cushion we have
allocated to help withstand future macroeconomic uncertainty is
sufficient to achieve that objective; and that any adverse changes
in the macroeconomic climate will not be more adverse to our
business than the changes we have anticipated as being possible in
our forecast models.
Forward-looking information is subject to known and unknown
risks, uncertainties, and other factors, many of which are beyond
the Company's control, that may cause actual results, performance
or achievements to be materially different from those expressed or
implied by such forward-looking information, including but not
limited to the risk that the Company's assumptions on which its
forward-looking information is based may not be accurate; the
Company's significant reliance on its relationship with one digital
platform; the impact of the continuing COVID-19 pandemic and of the
current recessionary environment; the risks of potential claims of
infringement by the Company or its content providers of third party
intellectual property and other rights; changes in laws and
regulations; the effect of competition; the Company has a
history of losses and negative cash flow; and the Company's need
for additional capital; as well as other factors discussed in
the Company's Final Long Form Prospectus dated October 22, 2020, its Annual Information Form
dated March 29, 2022 and in our
MD&A dated November 14, 2022 each
filed on sedar at www.sedar.com and in the
Company's other filings with the Canadian securities regulatory
authorities at www.sedar.com. The Company does not
undertake any obligation to update any forward–looking information,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable law.
BBTV-F
SOURCE BBTV Holdings Inc.