Business
Podcast Content Funding Guarantee Arrangement
Podcast Content Funding Guarantee Arrangement.
About this update from Audioboom Group Plc
[{"type":"text","content":"\n \nRNS Number : 3910C Audioboom Group PLC 17 June 2019 \n\nThis announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 (\"MAR\").\n \n \n17 June 2019\n \nAudioboom Group plc\n(\"Audioboom\", the \"Group\" or the \"Company\")\n \nPodcast content funding guarantee arrangement \n \nUp to US$4m of payment guarantees for new and existing leading podcasts \n \nIssue of warrants at 3.3p per share \n \nRelated party transactions\n \nAudioboom (AIM: BOOM), the leading global podcast company, has agreed a new content funding facility with SPV Investments Ltd, a special purpose vehicle ('SPV'), which has been established and is owned equally by Michael Tobin, the Company's Chairman, and Candy Ventures sarl, the Company's largest shareholder. \n \nThe SPV will provide minimum revenue guarantees to certain leading new content partners of the Company. In addition, the SPV will provide minimum revenue guarantees to certain leading existing Audioboom content partners when these contracts are being renewed. The SPV will provide guarantees of up to US$4 million in aggregate, to secure the minimum guaranteed advertising revenue share payable to the content partners pursuant to their commercial agreements with Audioboom. The provision of guarantees remains very much an exception when negotiating terms with content partners and the guarantees from the SPV will be used only to secure leading, high profile, high revenue producing podcasts.\n \nThe use of third-party guarantees will allow Audioboom to sign and renew certain leading podcast talent without tying up working capital. In return, Audioboom will pay the SPV 8% of the net advertising revenue (after paying the content partner its share) received by Audioboom from podcasts for which the guarantee has been provided. In addition, the underlying providers of the guarantees will be granted 2.5 million warrants to subscribe for ordinary shares in the Company for every US$1 million of guarantee provided, subject to a maximum of 10 million warrants. The exercise price of these warrants will be 3.3p per share each, with such warrants being exercisable for five years from grant.\n \nInitial use of the facility\n \nThe first use of the SPV will be for a guara...