The digital media platform provider said it anticipates additional funding from Raycom and implements management and board changes.
Frankly Completes Strategic Review
Frankly Inc., a digital media platform provider, has completed its previously announced evaluation of alternatives to “enhance shareholder value,” which was begun in September 2017. Additionally, the company has implemented several changes to its executive and senior management teams.
Strategic Review Process Completion
Frankly’s board of directors, led by the strategic committee, has determined the best path for the company is to pursue internal growth opportunities and focus on further optimizing its operations.
To support these initiatives, the respective boards of directors of Raycom Media Inc. and Frankly have agreed in principle to enter into an amendment of their credit agreement whereby Raycom would provide Frankly with an additional $7.5 million of funding. The $1 million Raycom advanced to Frankly in March would be included in the additional $7.5 funding. Of that, certain Frankly customers, led by Raycom, are expected to participate as lenders.
Upon entering into the amendment, the total outstanding loan balance under the amended credit agreement would be $22 million.
Given the extended timeframe of the strategic review process, the company has awarded a one-time cash bonus to members of the strategic committee, which is composed of Chairman Tom Rogers and Director Steve Zenz, for their additional services in the amount of $28,000 and $25,000, respectively.
Management and Board of Director Changes
Concurrent with the completion of the strategic review process, Frankly has reorganized its senior management team as the company enters its next stage of development.
Frankly COO-CFO Lou Schwartz has been promoted to CEO and director, succeeding Steve Chung, who is leaving the company to become chief digital officer of Fox Television Stations. Chung will continue to serve as an adviser to Frankly and the board through May.
Other management changes included:
- Controller Mike Munoz was promoted to CFO and treasurer.
- Head of Technology Omar Karim was promoted to chief product and technology officer.
- Head of Client Services Melissa Hatter was promoted to COO.
- Head of Business Development and Partnerships Jason Simpson was promoted to chief revenue officer.
- Vice President Alisa Warshawski was promoted to SVP, product.
- Vice President Matt Ehrens was promoted to SVP, engineering.
The foregoing officer appointments remain subject to applicable TSXV approval.
Operational Changes and Outlook
“In step with the strategic review process, the leadership team and I have continued to build on our operational momentum and are executing on our long-term plan to build a profitable and self-sustaining organization,” said Schwartz. “This included implementing aggressive cost rationalization efforts to reduce overhead by more than $5 million annually. I am encouraged to report that we have successfully rolled out the majority of these initiatives over the last 60 days, putting us on track to achieve cash flow profitability later this year.
“From a technology standpoint, we have also narrowed our focus and resources on key product initiatives, including our next-generation web-based CMS and cloud-based video platform. Commercially, we are focused on Frankly Local, marketing our newest workflow enhancements to our video platform, as well as growing strategic channel partnerships within the broadcast workflow ecosystem to efficiently expand our sales and distribution reach.
“Altogether, our strengthened product portfolio and growing pipeline of new business, along with our renewed operational focus and enhanced cash position, have positioned us for increasing success in the years ahead. We are encouraged by the near-term positive results of our recent efforts and are highly motivated to achieve our long-term goals for growth as well as profitability. In turn, we are looking forward to realizing a future in which Frankly has become a truly self-sustaining organization built for the many years ahead.”