This Day On The Street
Continue to site
ADVERTISEMENT
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

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs