Update on Magic Media Works Ltd and Conversion of existing Loan Notes
05 June 2017
Yolo Leisure and Technology plc ("Yolo") is pleased to provide an update on significant developments at its investee company, Magic Media Works Ltd ("Magic"), the home entertainment technology company.
- Magic has successfully completed a major new pre-IPO round of funding;
- Company now able to launch a new version of core product and to enter the North American market;
- Full participation in the Magic funding round by Yolo;
- Simultaneous conversion by Yolo of existing Magic Convertible Loan Notes;
- Yolo now a 41.43% shareholder in Magic; and
- FinnCap appointed by Magic to advise Company on corporate and funding strategy.
Magic has completed an issue of £1.2m of new Convertible Loan Notes (the "New Loan Notes"). £1.0m of this raise has been secured through additional funding from new and existing investors, with the balance consisting of the capitalisation of part of a loan account ("Loan Account") due to Rob Lewis, founder and CEO of Magic.
On conversion, the New Loan Notes will convert into ordinary shares in Magic at a 33% discount to the share price on an Initial Public Offering ("IPO") of Magic shares to the Stock Market. In the event that such an IPO does not occur by 1st December 2017, the New Loan Notes will thereafter accrue interest at 10% per annum. The New Loan Notes are repayable on the 1st of December 2019.
Yolo has subscribed for £500,000 of the New Loan Notes.
In addition to his investment in the New Loan Notes, CEO Rob Lewis has also subscribed for a further £600,000 of new ordinary shares in Magic through the conversion of the rest of his Loan Account, leaving a residual amount to be paid in lieu of salary.
As part of this investment round, Yolo is converting its existing holding of £1.415m Magic Convertible Loan Notes, as announced on 7 November 2016, into 2,673,661 new ordinary shares in Magic, giving it a 41.43% holding in Magic.
Following the closing of this pre-IPO funding round, Magic has appointed, with immediate effect, FinnCap Limited, one of the leading AIM Nominated Advisers and Brokers, as Corporate Finance Advisor to advise on its corporate finance strategy.
Following the above capital raises, Magic's next generation product will now launch in Q3 2017, delivering a suite of new features which will significantly differentiate the company's proposition from existing music streaming offerings.
This new product will be made available through a range of retailers, etailers and TV shopping networks in a range of territories in both North America and Europe with launch dates and further details about the products exciting features to be announced in the near future.
In anticipation of the new product's launch, Magic Works has appointed Paul Johnson (previously with Nissan, Sony and Virgin) as Chief Marketing Officer and Michael Moszynski, CEO of London Advertising, has joined Magic's Advisory Board.
Simon Robinson, Chief Executive Officer of Yolo, comments: "The closing of this pre-IPO funding round by Magic represents a significant milestone for the company. Our decision to subscribe in this funding round and to convert Yolo's existing Convertible Loan Notes in the company into a major equity holding, clearly demonstrates the Board's growing belief that our investment into Magic is now poised to deliver material and measurable near-term returns for Yolo shareholders. I am also pleased to report that YOLO's other investee companies are also performing well, and shareholders can expect news in this respect shortly."
Editors Note about Magic Media Works;
Magic Media Works mission is to connect people together through music and bring joy to the home by building remarkably simple products that anyone, and everyone can use. During the first quarter of 2017, a third of its existing customers were already using the company's devices for more than 8 hours per week.
Magic has licensing agreements with the world's major record labels, including Universal Music Group, Sony Music Group and Warner Music Group and major independents including Merlin Music and also the major music publishers, allowing users to access millions of albums and over 29 million music tracks ad-free.
For further information please contact:
|YOLO Leisure and Technology plc|
|Simon Robinson||[email protected]|
|Cairn Financial Advisers LLP|
|Sandy Jamieson, Emma Earl||+44 20 7213 0880|
|Peterhouse Corporate Finance Limited|
|Eran Zucker, Lucy Williams||+ 44 20 7469 0930|