Communicators

Crowd Mobile Reaches an Agreement to Refinance Debt –Reducing interest expense and significantly increasing working capital

Crowd Mobile Limited (ASX: CM8)

ASX Release

Highlights:

         Crowd Mobile refinances its term debt with a new €10.80m (AUD$16.12m) facility at a significantly reduced interest rate of 6.25% (compared to previous rate of 12%).

         The new Facility provides additional funding to assist with growing the business and driving marketing initiatives.

         The Track Vendors have agreed to an extension to their consulting agreements and an extension to the Oct 2016 vendor loan payment by a further 12 months to Oct 2017.

         The business continues to perform materially in line with March 2016 quarter.

Crowd Mobile Limited (ASX: CM8 & FWB-XETRA: CM3, “Crowd Mobile”, or “the Company”) is pleased to announce that it has secured a senior secured convertible note facility (“Facility”) from a leading US based fund manager (“Lender”) to replace the Company’s existing senior loan facility from its European debt provider. The Company will seek shareholder approval at an Extraordinary General Meeting (“EGM”) to complete the refinancing which is expected to be held on 1st August 2016.

CEO Domenic Carosa said: "We are very pleased to achieve a more flexible and cost effective refinancing outcome with this new Facility. Our ability to increase the Facility at more attractive rates reflects the strength of the Company’s asset portfolio and cash flows. This new Facility immediately improves the level of the Company’s working capital, which will help advance the Company’s further growth."

Terms of the Note

ï‚·         Face value of €11.80m (AUD$17.61m) and maximum proceeds of €10.80m (AUD$16.12m).

ï‚·         Interest rate of 6.25% (compared with 12% on the previous facility).

ï‚·         Cash repayments have a 1.5% premium and stock repayments a 10% VWAP discount

ï‚·         The term is for 30-months with principle and interest repayments to be made monthly.

ï‚·         The initial draw down will be circa €8.55 million (AUD$12.76m). Upon completion, these funds will be used to retire existing senior debt and provide extra working capital for the Company.

ï‚·         The Facility is denominated in Euro as this provides a natural currency hedge given most of the Company’s revenues and earnings are in Euro.

ï‚·         The Company intends to repay principle and interest in cash and retains the flexibility to repay via equity throughout the life of the Facility, at the Company’s election.

ï‚·         The Lender can convert all or a portion of the Facility into CM8 shares during the term at a fixed conversion price of 30% above the closing share price at the time of the EGM; subject to certain limitations.

Vendor Payments and Consultancy

Under the terms of the agreement for the Track acquisition (dated 31/10/2015), CM8 entered into consultancy agreements with the Track vendors (“Vendors”) to ensure continuity of operations during the crucial acquisition period and post settlement.

CM8 and the Vendors continue to collaborate well and this has led to the successful extension of the current consulting agreements with the Track Vendors until 31 December 2016. Crowd Mobile views this as a positive outcome as it retains the services of these individuals for a period of 14 months.

The Company will be making the scheduled earn-out payment to the Vendors for the Track acquisition of €2.50m (AUD$3.73m) on 30 June 2016 from existing cash reserves.

CM8 has also reached an agreement with the Vendors to defer the first Vendor payment of €2.0m (AUD$2.99m) scheduled for October 2016 to October 2017. This 12-month extension serves as a strong endorsement of the CM8 management team and performance of the business as the Vendors have willingly extended their payment term and indeed their ongoing operational involvement. The Vendors currently hold approximately 10% of the Company.

These changes greatly strengthen the advisory and operational team while preserving the balance sheet and allowing CM8 to manage its cash flow requirements

Consolidated Position and Operations

The CM8 business continues to generate positive free cash flow and EBITDA on a month to month basis, with the June 2016 quarter results expected to be materially consistent with the prior quarter.  The Company should be in a position to provide unaudited full year results for FY16 in early August 2016.

A summary of the debt obligations post the implementation of the Facility is set out below:

Post the initial draw-down of €8.55m (AUD$12.76m) under the Facility and payment of the Track acquisition earn out, the Company will have approximately AUD$5.0 million in cash and an additional €2.25m (AUD$3.36m) available as undrawn funding. The Company is able to draw down on the remainder of the Facility based on meeting certain EBITDA covenants.

Further information in relation to the Facility will be available in the Company’s Notice of Meeting & Explanatory Memorandum.

The Company will also be holding a Webinar sometime in July, further details will be provided in due course.

Jett Capital Advisors LLC of New York and RK Equity Advisors, LLC (Broker-Dealer services provided through Pickwick Capital Partners, LLC member FINRA SIPC) acted as financial advisor in connection with this transaction.

---ENDS---

For further information, please contact:

Crowd Mobile:                                                                     

Domenic Carosa                                                                                                 

Chief Executive Officer                                                                                   

M: +61 411 19 69 79                                                        

E: dom@crowdmobile.com                                         

Finance enquires:

Christian Shaw

Chief Financial Officer

M: +61 433 634 706

E: Christian@crowdmobile.com

About Crowd Mobile

Crowd Mobile is a mobile-first company with a world-leading platform that provides personalised expert advice that go beyond Google. Operating across 50 countries and 30 languages, the Company has partnered with over 160 mobile carriers to enable users to pay for its products and services through their mobile phone or with Google or Apple Pay. Crowd Mobile, which has also developed a diverse range of products in the m-payment, entertainment and infotainment space, is listed on the Australian and Frankfurt stock exchanges.