Audioboom renews agreement with one of its biggest podcasts

14 January 2020

(Sharecast News) - Podcast company Audioboom has renewed an exclusive sales and distribution contract with one of its most popular entertainment podcasts for 24 months, it announced on Tuesday, which included the opportunity to work with the content partner on further podcast projects.
The AIM-traded firm said that over the past year, the podcast had been downloaded more than 140 million times, and during 2019 the company sold more than 98% of the available advertising inventory against the podcast.

It said its content funding guarantee facility, announced on 17 June with SPV Investments - a special purpose vehicle owned equally by chairman Michael Tobin and the company's largest shareholder Candy Ventures - would be used to provide a guarantee of $1.75m in relation to the contract renewal.

Audioboom said the special purpose vehicle (SPV) was formed to provide minimum revenue guarantees up to an aggregate of $4m to certain leading new content providers or, on contract renewal, to existing content partners of the company.

"This secures the minimum guaranteed advertising revenue share payable to the content partners pursuant to their commercial agreements with Audioboom without tying up the company's working capital," the board said in its statement.

"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."

Audioboom noted that the first use of the SPV was announced on 17 June, and was for a guarantee of $1m in relation to the renewal of another of Audioboom's most popular entertainment podcasts.

Since then, payments made by Audioboom to the content partner had resulted in a reduction in the guarantee such that a guarantee of around $0.5m remained outstanding.

"Following the second use of the SPV set out above, the amount currently remaining available under the guarantee facility is approximately $1.8m."

Under the terms of the SPV facility, the provision of the second guarantee had led to a grant of 43,750 warrants to subscribe for ordinary shares in the company, split equally between Michael Tobin and Candy Ventures.

The exercise price of those warrants would be 330p per share each, with such warrants being exercisable for five years from grant.

A total of 68,750 warrants, following the June 2019 share consolidation and adjustment to the quantum and exercise price of the previously granted warrants, had now been issued under the guarantee facility, with the maximum number of warrants being capable of issue in that regard being 100,000.

At 1224 GMT, shares in Audioboom Group were up 4.45% at 237.62p.