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By Tom Winnifrith | Tuesday 15 May 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
I cannot hide my pleasure at today's catastrophic news from Audioboom (BOOM). Media companies should believe in free speech - Rob Proctor's outfit buckled at once forcing me to move bearcast elsewhere. And now Proctor's company faces possible bankruptcy in four weeks time. Ha fucking ha. This is a shambles.
The company had been planning a massive RTO with the £134 million purchase of Triton Digital Canda. Since Audioboom had no cash and a market cap of £33 million at suspension ( itself a rum n'coke) the scale of the proposed fund raise was always going to be a challenge. Did not Rob Proctor or his clownish brokers Cenkos and Zeus take some soundings because today we are told:
The Proposed Acquisition was to be funded, inter alia, by a placing of new ordinary shares in the Company (the "Placing"). However, in spite of significant demand, it has not been possible to complete the Placing.
Uh oh. So the deal is off. So the shares can be unsuspended right? Er...wrong.
As a result of the Proposed Acquisition and the Placing not proceeding, the Company requires further financing in the short-term for investment in additional podcasting content and working capital purposes. The Company announced on 27 April 2018 that it had issued convertible loan notes amounting to £1,000,000 to Candy Ventures SARL to assist in this regard. However, given the commercial opportunities that the Company has been working on in recent months, and the additional requirement for working capital, further equity funding will be required as soon as possible. The proceeds from the convertible loan notes will only provide the Company with sufficient working capital for a further period of up to four weeks from today's date, although the Company would take appropriate cash management measures to seek to extend such period if required.
As a result, the Company's financial position remains uncertain pending the successful completion of the further equity funding. Therefore, the Company has requested that its ordinary shares remain suspended from trading on AIM pending clarification over the Company's financial position.
Ignore all the bollocks from Proctor and his FD about "additional podcasting content". Sorry there is no FD the last one quit without explanation and the company has only just appointed a new CFO but for obvious reasons ( would you risk having an insolvency on your CV?) he is not joining the board yet.
The FACT is that as things stand without splashing out on additional content Audioboom will be out of cash and with a million quid of debt within four weeks. Okay Proctor and others could stretch that four weeks with salary deferral and by delaying payments to suppliers but you get the drift.
Indeed Proctor fesses up... unless there is a new equity raise ( to pay break costs on the Triton deal, stonking adviser fees on that aborted deal and all Audioboom's other bills) then
If sufficient further equity funding is not available in the required time horizon then, in the absence of alternative funding options, the Board considers that it would likely need to take actions to protect the interest of creditors, which may result in the ultimate winding up of the Company.
Er... so it is mega dilution or a total wipeout for shareholders. But fear not, Proctor opines:
The Board is confident that further funding will be available and it has commenced immediate action in this respect.
Hmmm. That would be the board that was confident it could raise the cash for a £134 million RTO. Whatever.
So a cash burning company with a business model that seems never to work, a history of related party deals, almost no cash left, big debts, unstated liabilities - what is not to like?
More karma vicar? have a good day Rob Proctor.
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