This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SearchMedia Provides Business Update; Integration Program; Recent Corporate Actions

SearchMedia Holdings Limited (“ SearchMedia” or the “ Company”) (NYSE Amex: IDI) (NYSE Amex: IDI.WS) today announced recent corporate actions designed to eliminate significant cash obligations of the Company and better align the interests of our subsidiaries and shareholders.

Subsidiary Integration Equity Program : The Company’s Board of Directors has approved and authorized a capped pool of 7 million common shares to be issued to certain former owners of SearchMedia’s acquired entities (“ Integration Program”) for the sole purpose of converting and eliminating all or substantially all of the outstanding earnout liabilities of the Company which was $39.2 million as of June 30, 2011 (the “ Earnout Obligations”).

Integration of Acquired Entities : In addition to eliminating the Earnout Obligations from the Company’s balance sheet, the secondary purpose of this Integration Program is to further align the interest of our subsidiaries and shareholders and provide additional incentives for new concessions that benefit all of our operations as a group, as well as enhance the Company’s liquidity and capitalization. We expect that the Earnout Obligations will be fully eliminated within the 2 nd Quarter 2012, and that we do not need to fully utilize the shares in the Integration Program as a result of previous corporate restructuring actions undertaken to further improve performance and terminate operations which are not likely to be profitable for the Company going forward. We expect to issue the shares upon completion of the Company’s audit for the year ended December 31, 2011.

Recent Share Issuances : In the last quarter of 2011, 0.8 million common shares of the Company at an average per share price of $6.90 were issued to certain subsidiaries, namely Qingdao Kaixiang Advertising Co. Ltd., Wuxi Ruizhong Advertising Co. Ltd. and Ad-Icon Company Limited in settlement of $5.2 million of earnout obligations.

Divestiture of Subsidiary : As part of this initiative and based on a study of the performance and projections of Zhejiang Continental Advertising Co. Ltd. (“ Continental”), the Company has agreed to divest Continental back to its previous owners and eliminate the related earnout liability of $17 million in exchange for the issuance of 1 million shares of SearchMedia at a price of $2.00 per share. As of May 2, 2012, Continental’s operating results will no longer form part of the Company’s consolidated financial statements. The Company believes that the cost savings from not carrying out the remaining earnout obligations pursuant to the acquisition agreement for Continental frees up the Company’s resources for use in other more promising opportunities.

Through the divestiture of Continental and the recent share issuances to certain subsidiaries, the Company has materially reduced its outstanding Earnout Obligations from $39.2 million to $16 million while focusing on its remaining subsidiaries to build shareholder value. In addition, the improved liquidity and capitalization following these corporate actions will better allow the Company to embark on new out-of-home media initiatives and nationwide concessions. Upon the completion of the Continental transaction, the common shares outstanding for the Company will be 18.1 million. Upon completion of the Integration Program, the Company anticipates the share count to be in the range of 21 to 22 million shares and the remaining Earnout Obligations will be eliminated. By way of comparison, as of Dec 31, 2011 there were 21.7 million common shares of the Company outstanding, prior to the completion of the settlement with certain predecessor shareholders of the Company.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs