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 4^th 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.

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/

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: [email protected]

Investor Relations: [email protected]

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.

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