Loop Media Accesses Capital and Reduces Prior Existing Debt
Insider warrant exercise and new credit facility improve balance sheet
LOS ANGELES--(BUSINESS WIRE)-- Loop Media, Inc. ("Loop®") (NYSE American: LPTV), a leading multichannel streaming platform that provides curated music video, sports, news, entertainment channels and digital signage for businesses, announced today a series of transactions resulting in the Company obtaining additional cash availability of approximately $4.0 million consisting of proceeds to the Company of approximately $1.5 million from the repricing and exercise of certain holders of warrants to purchase 1.8 million shares of Loop common stock, par value $0.0001 ("Shares") at $.80 per share (at the market under NYSE rules) and an additional $2.5 million of funds available to the Company under a new revolving debt facility. Loop also converted approximately $2.3 million in existing long-term debt into 2,910,771 Shares at $0.80 per share (at the market under NYSE rules). These transactions are with related parties and are described in more detail below and in our Annual Report on Form 10-K for the year ended September 30, 2023, which we intend to file with the Securities and Exchange Commission on December 18, 2023.
"Our team is focused on implementing our FY24 business plan, including our desire to continuously strengthen our balance sheet to support the business and allow us to focus on growing our distribution footprint and revenues," said Jon Niermann, CEO and Co-founder. "The additional funds provided by our Chairman is welcomed and evidences his support of the management team and the market opportunity for the company."
Excel Revolving Line of Credit
Effective as of December 14, 2023, Loop® entered into a Revolving Line of Credit Loan Agreement with Excel Family Partners, LLLP ("Excel"), an entity managed by Bruce Cassidy, Sr., Chairman of our Board of Directors (the "Line of Credit Agreement") for up to a principal sum of $2,500,000, under which Loop® may pay down and re-borrow up to the maximum amount of $2,500,000 (the "Line of Credit"). Our drawdown on the Line of Credit is limited to no more than twenty-five percent (25%) of the last three full months' revenue, not to exceed $1,250,000 in any quarter, and not to exceed in aggregate the outstanding debt amount of $2,500,000. The Line of Credit Agreement has a maturity date twelve (12) months from the date of formal notice of termination by Excel, and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to ten percent (10%) per year. Under the Line of Credit Agreement, we granted Excel a pari passu senior security interest.
Under the terms of the Line of Credit Agreement, on December 14, 2023, we issued to Excel a warrant to purchase up to an aggregate of 3,125,000 Shares. Each warrant has an exercise price of $0.80 per share (at the market under NYSE rules) that expires on December 14, 2026, and is exercisable at any time prior to such date, to the extent that after giving effect to such exercise, Excel and its affiliates would beneficially own no more than 29.99% of the outstanding Shares.
Excel May 2023 Secured Line of Credit Note Conversion Agreement
On December 14, 2023, Loop® entered into a Note Conversion Agreement with Excel to convert $2,328,617 in aggregate principal and accrued interest under an existing secured credit agreement (the "Note Conversion Agreement") into 2,910,771 Shares, at a conversion price per share of $0.80 (at the market under NYSE rules). The Note Conversion Agreement contains customary representations, warranties, agreements and obligations of the parties.
Repricing and Exercise of Certain Existing Warrants
On December 14, 2023, Loop® agreed to offer to amend certain existing warrants exercisable for an aggregate of up to 4,055,240 Shares (each such warrant an "Existing Warrant") to reduce the respective exercise prices thereof to $0.80 per share (at the market under NYSE rules) (such new price being referred to as the "Amended Exercise Price"), on the condition that the holder of an Existing Warrant commit to exercise such Existing Warrant. Existing Warrants exercisable for an aggregate of up to 786,482 shares of our common stock are held by Excel, and Eagle Investment Group, LLC, entities managed by Mr. Cassidy. Existing Warrants exercisable for an aggregate of up to 443,332 Shares are held by Denise Penz, a member of our Board of Directors. As of December 14, 2023, each of Mr. Cassidy and Ms. Penz have entered into an agreement to exercise their Existing Warrants, which will result in aggregate net proceeds to the Company of $983,851. Loop® has total commitments, including Mr. Cassidy and Ms. Penz, and from Holders of Existing Warrants to reprice and exercise Existing Warrants for an aggregate of 1,828,147 Shares at $.80 (at the market under NYSE rules) for an aggregate exercise price of $1.5 million. There is no assurance that other Existing Warrant holders (who are not officers or directors of the Company) will agree to the repricing and exercise of their Existing Warrants.
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 a 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, and airports in the United States.
Loop is fueled by one of the largest and most important short-form entertainment libraries, including music videos, movie trailers and live performances. Loop Media's non-music channels cover a multitude of genres and moods and include sports highlights, news, lifestyle and travel videos, viral videos and more. Loop Media's streaming services generate revenue from advertising, sponsorships and subscriptions.
To learn more about Loop Media products and applications, please visit us online at www.loop.tv
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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.
Loop Media Press Contact – PhillComm Global PR Agency
Jon Lindsay Phillips
Source: Loop Media, Inc.
Released December 18, 2023