To view the PDF file, sign up for a MySharenet subscription.

HUGE GROUP LIMITED - Voluntary announcement regarding the restructuring of Eyeballs Mobile Advertising (Pty) Ltd and other matters

Release Date: 12/11/2015 12:44
Code(s): HUG     PDF:  
Wrap Text
Voluntary announcement regarding the restructuring of Eyeballs Mobile Advertising (Pty) Ltd and other matters

HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG    ISIN: ZAE000102042
(“Huge” or “the Company”)

VOLUNTARY ANNOUNCEMENT REGARDING THE RESTRUCTURING OF EYEBALLS
MOBILE AVERTISING PROPRIETARY LIMITED, CONCLUSION OF GLOBAL
ROYALTY AGREEMENT AND UPDATE ON IMPACT OF DECLINING
TERMINATION RATES ON THE BUSINESS OF HUGE TELECOM PROPRIETARY
LIMITED

RESTRUCTURING OF EYEBALLS MOBILE ADVERTISING PROPRIETARY
LIMITED

Shareholders are advised that on or about 8 September 2015,
Huge concluded a sale of shares and claims agreement (“the
Sale Agreement”) to acquire 12 000 ordinary shares in the
ordinary share capital of Eyeballs Mobile Advertising
Proprietary Limited (“Eyeballs”), representing 12% of the
total issued share capital of Eyeballs.

The Sale Agreement was conditional, amongst other things, on
Eyeballs entering into a licencing agreement (“the Licence
Agreement”) with a subsidiary company of a global platform
operator (“the Licensee”) of Internet, e-commerce, media and
social network services (“the Licence Condition”).

The Licence Condition was fulfilled and accordingly, the
Agreement became unconditional.

As a result, Huge has increased its shareholding in Eyeballs
from 84% of the total issued share capital of Eyeballs to 96%
of the total issued share capital.

CONCLUSION BY EYEBALLS OF THE LICENCE AGREEMENT

On or about 9 September 2015, Eyeballs concluded the Licence
Agreement, which contemplates the granting by Eyeballs of an
irrevocable, non-transferable and non-exclusive licence (“the
Licence”) to the Licensee to:
1. adapt, modify and enhance the computer code and supporting
    materials that comprise the Eyeballs technology (which
    includes a media and advertising campaign management
    system and various mobile billboard applications) (“the
    Software”);
2. create adaptions, modifications and enhancements to the
    Software (“Enhancements”);
3. use the Software and Enhancements in order to develop,
    market and sell advertising rights in the form of mobile
    billboards;
4.   integrate the Software into the Licensee’s hosting
     servers; and
5.   use the Software related materials (collectively “the
     Licence Rights”).

In consideration for the granting of the Licence and the
embodying Licence Rights, the Licensee undertakes to pay
Eyeballs an uncapped licence fee equal to a percentage of the
global revenue and deemed global revenue generated by the
Licensee from its use of the Licence and embodying Licence
Rights.


The Licence Agreement has become unconditional.

The board of directors of Huge and of Eyeballs are of the
opinion that the conclusion of the Licence Agreement possibly
marks a change in the fortunes of Eyeballs. The Licensee is a
subsidiary of a global company that has the balance sheet and
reach to ensure the successful commercialisation of the
Software, including the generation of advertising revenue. In
addition, the conclusion of the Licence Agreement allows
Eyeballs to demonstrate the value of the Software to other
potential licensees.

POSITIVE IMPACT OF DECLINING TERMINATION RATES ON THE BUSINESS
OF HUGE TELECOM PROPRIETARY LIMITED

In terms of the final call termination regulations published
in Government Gazette number 38042 (30 September 2014):
1. the call termination rate to a mobile destination
    decreased by 7 cents per minute from 31 cents per minute
    to 24 cents per minute with effect from 1 October 2015 for
    operators without significant market power;
2. the call termination rate between geographic area codes
    (to a national destination) decreased by 5 cents per
    minute from 21 cents per minute to 16 cents per minute
    from 1 October 2015 for operators without significant
    market power;
3. the call termination rate within geographic area codes (to
    a local destination) decreased by 3 cents per minute from
    18 cents per minute to 15 cents per minute from 1 October
    2015 for operators without significant market power;
4. the call termination rate to a mobile destination
    decreased by 4 cents per minute from 20 cents per minute
    to 16 cents per minute with effect from 1 October 2015 for
    operators with significant market power;
5. the call termination rate between geographic area codes
    (to a national destination) decreased by 3 cents per
    minute from 15 cents per minute to 12 cents per minute
     from 1 October 2015 for operators with significant market
     power; and
6.   the call termination rate within geographic area codes (to
     a local destination) decreased by 1 cent per minute from
     12 cents per minute to 11 cents per minute from 1 October
     2015 for operators with significant market power;
     (collectively “the lower termination rates”.

Huge Telecom is a beneficiary of the lower termination rates,
which will have an anticipated positive impact on
profitability for the last four months of the financial year
ending on 28 February 2016, through the lowering of cost of
sales. Shareholders are advised that any forecast financial
information that may be contained in this announcement has not
been reviewed by the Group’s auditors.


Johannesburg
12 November 2015

Designated Adviser: Stellar Advisers (Pty) Ltd

Date: 12/11/2015 12:44:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story