Quickflix issues yet more share options in deal to avoid $5m studio royalty payments
Struggling Australian streaming and DVD rental company Quickflix (ASX:QFX) has issued yet more share options in the company to hold off debtors.
In an announcement timed for after the Australian Securities Exchange had closed for Christmas, Quickflix revealed that it has issued another 51.2m share options in the company and plans to go through yet another round of fund raising.
The options will go to major studios Quickflix had licenced video content from, for which it is unable to pay. It said the obligations covered by the deal amount to $5m, and that it has now been released from a total of $7m in obligations.
The company has been suspended from its listing on the ASX since August, at which point its market capitalisation has already fallen to $2.2m.
In its previous update to the market in October, the company revealed that as of three months ago, it had just $840,000 left in the bank and was relying on a tax rebate it had applied for of $620,000.
The deal means that the studios will be able to take up the share options at no cost at any point up to the end of October 2018.
According to today’s announcement, Quickflix has also agreed to pay further royalties from next July based on its revenues. Quickflix will now attempt to go through another round of recapitalisation. In order to do so, the company will need to persuade the market that it will be in a position to thrive alongside fast growing international players such as Netflix and local players such as Stan and Presto.
Thanks mainly to repeated recapitalisations as the company has battled to survive, there have already been 1.8bn shares issued in Quickflix.
In its last quarterly update, Quickflix said that its year-on-year revenue from customers was down by 23% and that its number of customers had declined to just over 100,000.
The troubled company is currently advertising for marketing staff.
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just kill this already
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