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Subsequent Events
3 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

Note 17 — Subsequent Events

 

In July 2020, the Company completed the previously announced acquisition of 100% of the issued and outstanding equity interests of PodcastOne pursuant to the Stock Purchase Agreement, dated as of May 7, 2020. The Company acquired 100% of the issued and outstanding equity interests of PodcastOne and issued to the sellers 5,363,636 shares of its common stock. The Company did not assume any outstanding options to acquire any shares of capital stock of PodcastOne and such options were terminated and cancelled in connection with such acquisition. As of the filing of this Quarterly Report, the Company has not yet determined the accounting for the PodcastOne transaction, and pro-forma information is not yet available.

 

In July 2020, the Company entered into a Securities Purchase Agreement, as amended on July 30, 2020, with a certain existing institutional investor pursuant to which, subject to the satisfaction of certain closing conditions on the Closing Date, the Company agreed to sell, in a private placement transaction, for a cash purchase price of $15.0 million, the Company's 8.5% Subordinated Secured Convertible Note in the principal amount of $15.0 million. In addition, on the closing date of the transaction (the "Closing Date"), the Company agreed to issue to the Purchaser 800,000 shares, as amended, of its common stock (the "Shares"). Subject to satisfaction of closing conditions, the Note and the Shares will be issued in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended. If the transaction is consummated, the note shall mature on the second anniversary of the Closing Date, accrue interest at 8.5% per year, payable quarterly in cash in arrears, and shall be convertible into shares of common stock at a conversion price of $4.50 per share at the Purchaser's option, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations. The closing of the private placement transaction is subject to various customary closing conditions and other conditions, including, among others the Company repaying in full the outstanding obligations to its senior secured lender and the agreements with the senior lender being terminated. In connection with the execution of the Securities Purchase Agreement, the Company provided a prepayment notice to its senior secured lender on July 31, 2020 of its intention to prepay in full, by August 31, 2020, all of its senior secured convertible debentures disclosed in Note 8 — Senior Secured Convertible Debentures.  

  

In July 2020, the Company issued to a certain music licensor 2,415,459 shares (the "Shares") of its common stock at a price of $4.14 per share, to satisfy the Company's payment obligation in the amount of $10.0 million owed to such music licensor (the "Threshold Amount").  In the event that the value of the Shares as of September 30, 2020 is less than the Threshold Amount, the Company agreed to make an additional cash payment to such music licensor in an amount equal to the difference between (i) the Threshold Amount and (ii) the sum of (x) the net proceeds of any sales of the Shares by the music licensor plus (y) the aggregate value of the Shares not sold by the music licensor as of such date. The shares were issued pursuant to the Company's effective shelf Registration Statement on Form S-3, as amended (File No. 333-228909), which was filed with the SEC on December 19, 2018 and went effective on February 7, 2019 (the "Registration Statement"), and a prospectus supplement related to the offering of these shares filed with the SEC on July 22, 2020. The Company did not receive any cash proceeds from the offering of these shares.

 

In July 2020, the Company issued directly to a certain institutional investor and another investor a total of 1,820,000 shares of the Company's common stock for cash consideration of approximately $7.5 million at a price per share of $4.14. The Company intends to use the net proceeds for repayment of debt of up to $5.0 million, working capital and general corporate purposes. The offering of the shares was made pursuant to the Registration Statement, and a prospectus supplement related to the offering filed with the SEC on July 23, 2020.

  

In August 2020, the Company and Mani Brothers 9200 Sunset (DE), LLC, the landlord of its principal executive offices in West Hollywood, entered into the Occupancy Agreement. Pursuant to the agreement, the Company agreed to issue MBRG Investors, LLC as the designee of the landlord 95,436 shares of its freely-tradable common stock (the "Shares"), at a price per share of $4.14, in full satisfaction of the Company's payment obligation of approximately $395,000 to the landlord. The offering of these shares were made pursuant to the Registration Statement and prospectus supplement related to the offering, which was filed with the SEC on August 11, 2020, and the final settlement and issuance of these shares was on August 11, 2020.