NEW YORK, Jan. 7, 2020 /CNW/ -- Frankly Inc.
("Frankly") (TSX-V: TLK) (OTCQX: FRNKF), announces that
its Frankly Media subsidiary ("Frankly Media") has entered an
agreement with an arm's length lender, EB Acquisition Company, LLC
(the "Lender"), whereby the Lender has agreed, subject to the terms
and conditions thereof, to provide Frankly Media with a revolving
term line of credit in the principal amount of up to US$5 million (the "Loan"). In connection
with entering into the Loan, Frankly Media has drawn US$4 million under the Loan under an initial
advance. Subsequent advances may be made, subject to
customary conditions precedent to be satisfied by Frankly Media or
waived by the Lender.
Summary of Loan Terms - The Loan has a one-year term,
extendable for a second year upon the mutual agreement of Lender
and Frankly Media, and is secured by a security interest in Frankly
Media's assets, as well as a guarantee by Frankly, secured against
Frankly's assets. The Loan is subject to a US$100,000 commitment fee, payable US$50,000 within the later of five business days
following (a) the entry of the Loan agreement or (b) receipt of any
required regulatory approval. If the Loan term is extended
for a second year, an additional fee will be payable by Frankly
Media in the amount of 1% of outstanding principal balance under
the Loan as of the commencement of the second year of the Loan
term. Interest on outstanding balances of the Loan will
accrue at a rate of 10% per annum. The Loan is subject to
mandatory repayment arising upon Frankly's raising of certain
amounts of additional financing. The proceeds of the Loan
will be used to supplement Frankly Media's general working
capital.
Summary of Warrant Terms - In connection with the Loan, and
subject to TSX Venture Exchange approval, Frankly will also grant
the Lender warrants to acquire up to US$500,000 of Frankly common shares (determined
in reference to the "Market Price" of Frankly common shares
pursuant to the policies of the TSX Venture Exchange)
(the "Bonus Warrants"). Each Bonus Warrant will be
exercisable to acquire one Frankly common share with an exercise
price of C$0.50 per share. The
Bonus Warrants will have a two-year exercise period commencing on
the date of their issuance, provided that if there is full
repayment of the outstanding principal balance of the Loan within
the first year of the Loan term, or the term of the Loan is not
extended for a second year, the exercise period of the Bonus
Warrants will be reduced to one year from the date of their
issuance. The Bonus Warrants granted in connection with the
Loan will be subject to a regulatory hold period of four months
from the date of issuance.
Director Compensation – Separately, in connection with its
Board compensation plan, Frankly has granted its Chairman of the
Board, Tom Rogers, 234,101
restricted stock units (RSUs), and has granted directors
Steve Zenz and Samuel Hyun 183,210 RSUs and 29,356 RSUs,
respectively, due for Board service. These grants represent
regular quarterly amounts due for Q3 and Q4 2019 and Q1 2020.
About Frankly Media
Frankly Media provides a complete suite of solutions that give
publishers a unified workflow for the creation, management,
publishing and monetization of digital content to any device, while
maximizing audience value and revenue.
The company is headquartered in New
York with offices in Atlanta. Frankly Media is publicly traded
under ticker TLK on Canada's TSX
Venture Exchange. For more information, visit
www.franklymedia.com
Notice Regarding Forward-Looking Statements
This release includes forward-looking statements regarding
Frankly and its respective businesses, including statements
regarding Frankly's expectation that the TSX Venture Exchange will
approve the issuance of the Bonus Warrants (and the expected terms
thereof) in connection with the Loan, as well as statements
regarding future advances which Frankly Media may borrow under the
credit facility established by the Loan, which may not occur on the
timetables contemplated or at all or which may occur on terms that
materially differ from those described herein.
Forward-looking statements and circumstances discussed in this
release may not occur by certain specified dates or at all and
could differ materially as a result of known and unknown risk
factors and uncertainties affecting the parties. Material
risk factors that could cause actual results to differ materially
from those described herein include: that required regulatory
approvals in connection with the Loan will not be obtained on terms
acceptable to the Lender and Frankly or at all and risks that
Frankly may not be able to cause Frankly Media to satisfy the
conditions precedent to obtain subsequent advances under the Loan
in a timely manner, or at all. Forward looking statements depend on
certain assumptions that management deems to be reasonable in the
circumstances, but such assumptions may prove to be incorrect and
the outcome of the subject of any forward-looking statement cannot
be guaranteed. Such assumptions are based on, among other
things, management's assessment of the ability to obtain required
approvals of the TSX Venture Exchange and management's
assumptions regarding its ability to cause Frankly Media to satisfy
the conditions precedent under the Loan in respect of subsequent
advances. 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.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
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SOURCE Frankly Media
