WOW Unlimited Media Inc. Announces Closing of Second Tranche of Non-Brokered Private Placement of Unsecured Convertible Debentures

WOW Unlimited Media Inc

VANCOUVER, British Columbia, Dec. 14, 2020 (GLOBE NEWSWIRE) — WOW Unlimited Media Inc. (“WOW!” or the “Company”) (TSXV: WOW; OTCQX: WOWMF) is pleased to announce that it has closed the second tranche (the “Second Tranche Closing”) of its previously announced non-brokered private placement offering of unsecured subordinated convertible debentures (the “Debentures”) for gross proceeds of $2,061,000. On November 17, 2020 WOW! completed its first tranche ( the “First Tranche Closing”) of Debentures for gross proceeds of $2,639,000, for a total offering size of $4,700,000 (the “Offering”).
Pursuant to the Second Tranche Closing, WOW! issued 2,061 Debentures at an issue price of $1,000 per $1,000 principal amount of Debentures.The Debentures were issued pursuant to the terms of a debenture indenture entered into between WOW! and Computershare Trust Company of Canada (the “Debenture Indenture“) and will mature on November 17, 2023. Each Debenture bears interest at a rate of 9.5% per annum from the date of issue, payable in equal quarterly payments on March 31, June 30, September 30 and December 31 in each year commencing December 31, 2020.Pursuant to the terms of the Debenture Indenture, each Debenture is convertible, at the option of the holder, into common shares of the Company (“Shares”) at any time prior to the close of business on the earlier of: (i) the last business day immediately preceding the maturity date; and (ii) the date fixed for redemption, at a conversion price of $0.55 per Share. The Debentures will be subordinated to the senior indebtedness of the Company; however, the Debentures will rank pari passu with each other series of debentures issued under the Debenture Indenture or under indentures supplemental to the Debenture Indenture (regardless of their actual date or terms of issue) and, except as prescribed by law, with all other existing and future unsecured indebtedness of the Company other than senior indebtedness. The Debentures are redeemable at any time after 12 months from the date of issuance at a redemption price equal to the principal amount of the Debentures plus accrued and unpaid interest thereon.The investors who participated in the Second Tranche Closing are fully comprised of holders of the Company’s existing convertible debentures which mature on December 14, 2020 (the “Existing Debentures”). Holders of Existing Debentures that participated in the Second Tranche Closing were entitled to set off the amount to which they were entitled on the maturity date of the Existing Debentures against amounts otherwise payable in connection with their subscription for Debentures in the Second Tranche Closing. The net proceeds from both the First Tranche Closing and the Second Tranche Closing will be used first, to pay down the Existing Debentures of $4,300,000; and secondly, for general working capital purposes.Related Party TransactionsThe Offering constituted a “related party transaction” within the meaning of TSX Venture Exchange (the “TSXV”) Policy 5.9 and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as certain insiders of the Company subscribed for an aggregate of $446,000 principal amount of Debentures under the First Tranche Closing and an aggregate $1,161,000 principal amount of Debentures under the Second Tranche Closing, for a total of $1,607,000 principal amount of Debentures in connection with the Offering. The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) thereof in respect of related party participation in the Offering as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the Offering, insofar as it involves related parties, is more than 25% of the Company’s market capitalization (as determined under MI 61-101). The Company filed a material change report on November 24, 2020 in respect of the related party transaction, which disclosed the participation of the insiders in the Offering. Directors of the Company who participated in the Offering, were required to disclose their interest in the Offering and abstain from voting on the approval of the Offering.The Offering remains subject to customary conditions, including but not limited to the final approval of the TSXV, and the securities issued pursuant to the Offering are subject to statutory hold periods expiring four months and one day from either the First Tranche Closing or the Second Tranche Closing, as applicable, pursuant to applicable Canadian securities laws.Early Warning DisclosureAs part of the Second Tranche Closing, Bell Media Inc. (“Bell Media”) subscribed for $519,000 principal amount of the Debentures. If converted at the conversion price set forth herein, the $519,000 principal amount of the Debentures held by Bell Media would represent 4.11% of the outstanding common voting shares of WOW! (the “Common Voting Shares”) and 3.11% of all the outstanding voting shares (being, the Common Voting Shares and variable voting shares) of WOW! (collectively the “Voting Shares”).Immediately before the Second Tranche Closing, Bell Media owned 3,842,918 Common Voting Shares, $519,000 principal amount of the Existing Debentures and 900,000 non-transferable Share purchase warrants of the Company (the “Warrants”), representing (a) 17.47% of the outstanding Common Voting Shares and 13.05% of all the outstanding Voting Shares, on a non-diluted basis, and (b) 21.61% of the outstanding Common Voting Shares, and 16.35% of all the outstanding Voting Shares on a partially-diluted basis, assuming the conversion of the Existing Debentures and the full vesting and exercise of the Warrants (but assuming no exercise, conversion or exchange of any other convertible or exchangeable securities of WOW! by other holders). Immediately following the Second Tranche Closing, Bell Media owns 3,842,918 Common Voting Shares, $519,000 principal amount of the Debentures and 900,000 Warrants, representing (a) 17.47% of the outstanding Common Voting Shares and 13.05% of all the outstanding Voting Shares, on a non-diluted basis, and (b) 23.86% of the outstanding Common Voting Shares, and 18.18% of all the outstanding Voting Shares on a partially-diluted basis, considering the same assumptions as to prior the Second Tranche Closing.Bell Media subscribed for $519,000 principal amount of the Debentures in replacement of the $519,000 principal amount of the Existing Debentures. Depending on various factors including, without limitation, conditions in the securities markets and general economic and industry conditions, Bell Media’s business or financial condition, and other factors and conditions Bell Media deems appropriate, Bell Media may develop plans in the future to subscribe to, purchase, or sell securities of WOW!, to solicit proxies, or to otherwise participate in any significant transaction involving WOW! to maintain rights and privileges, such as board rights, associated with its current ownership position as provided in the investor rights agreement entered into between Bell Media and WOW! On August 31, 2018. At the moment, Bell Media has not developed any such plans. Bell Media will be filing an early warning report under the SEDAR profile of WOW! at www.sedar.com. A copy may also be obtained by contacting BCE Investor Relations, at 1-800-339-6353 or investor.relations@bell.ca.This press release does not constitute an offer of securities for sale in the United States or to “U.S. persons” as such term is defined in Regulation S promulgated under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”). The Company does not intend to register the securities being offered under the U.S. Securities Act or applicable state securities laws, and securities may not be offered or sold to persons in the United States absent registration or an exemption from such registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or the selling security holder and that will contain detailed information about the Company and management, as well as financial statements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.About WOW!WOW! is creating a leading animation-focused entertainment company by producing top-end content and building brands and audiences on engaging media platforms. The Company produces animation in its two established studios: Mainframe Studios in Vancouver and Frederator Studios in Los Angeles. The Company’s media offerings include Channel Frederator Network on YouTube, as well as WOW! branded programming on Crave, Canada’s premier streaming entertainment platform, owned by Bell Media. The Voting Shares are listed on the TSXV (TSXV: WOW) and the OTCQX Best Market (OTCQX: WOWMF).Forward-Looking Statements:This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as “forward-looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “may”, “will”, “project”, “should” or similar words, including negatives thereof, suggesting future outcomes.In particular, this press release contains forward-looking statements relating to, among other things: the size of the Offering, and the intended use of the net proceeds of the Offering. Such statements reflect management’s current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by WOW!, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward-looking statements included in this press release, the Company has made various material assumptions, including, but not limited to general business and economic conditions; the Company’s ability to raise additional funding; capital expenditure programs and other expenditures by the Company and its customers; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; and changes in business strategy or development plans.Forward-looking statements are not a guarantee of future performance and are subject to and involve a number of known and unknown risks and uncertainties, many of which are beyond the control of the Company, which may cause the Company’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in the Company’s Management’s Discussion and Analysis for its year ended December 31, 2019, which has been filed with the Canadian Securities Administrators and is available on the System for Electronic Document Analysis and Retrieval at www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.Further information available at: Website: www.wowunlimited.co
Contact: Bill Mitoulas, Investor Relations
Tel: (416) 479-9547
Email:


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