KIT Capital Exercises Right to Purchase $5 Million of Common Stock in Company
ROO Group (d/b/a KIT digital) Receives Funding from CEO's Investment Company
NEW YORK - April 18, 2008 - ROO Group (OTCBB: RGRP), which is in the process of changing its name to KIT digital ("the Company"), today announced that the Company has been notified by KIT Capital Limited ("KIT"), an investment company controlled by chairman and CEO Kaleil Isaza Tuzman, of its intention to purchase $5,000,000 of the Company's common stock at a price of $0.16 per share, and of KIT's willingness to receive these shares on an unregistered basis.
This purchase of 31,250,000 shares comes as a result of the exercise of KIT's previously announced right, pursuant to Section 4.5 of the December 18, 2007 Executive Management Agreement between KIT and the Company, to purchase up to $5,000,000 at $0.16 per share. As a result of the purchase notification, this right is fully exercised and extinguished.
In addition, KIT and the Company have agreed, conditional upon the approval of an independent committee of the Company's Board of Directors, that KIT will (A) waive its right under the Executive Management Agreement to purchase 51% of the Company's preferred stock; and (B) waive its right to require the Company to register the shares of common stock underlying the abovementioned $5,000,000 investment, in consideration for the issuance by the Company of a five-year warrant to purchase 2,800,000 shares of the Company's common stock at an exercise price of $0.16 per share.
Pro forma of the exercise of KIT Capital's investment right, the Company will have approximately 70,590,000 total shares of common stock outstanding and a cash position of approximately $10.3 million (based on the Company's last reported cash position as of March 28, 2008).
Kaleil Isaza Tuzman, chairman and chief executive officer of KIT digital, said, "This investment is indicative of my view that the Company presents a compelling value proposition. I would have exercised this investment right some time ago, but was waiting until we resolved the issue of the elimination of the blank-check preferred class of shares. Now that all shareholders of the Company are on the same footing, I felt it was the right time to exercise my investment right."
Robin Smyth, chief financial officer of KIT digital, commented, "Kaleil's $5 million investment into the treasury of the Company was important to our fiscal planning, and had been previously socialized to the market on several occasions. We are pleased that Kaleil has reinforced his commitment to the Company, and remain on track vis-a-vis our financial and operating plan for 2008."
About KIT digital
KIT digital (formally ROO Group) (OTCBB: RGRP) is a global service provider enabling businesses to leverage their digital media assets and provide an enhanced user experience. Through its comprehensive, customized online platform, KIT digital provides clients with an end-to-end solution to maximize the value of their online assets. Clients can publish, manage and distribute digital video content, build online communities and integrate advertising, as well as access approximately 100 KIT-syndicated channels and 40,000 KIT-syndicated videos. KIT digital has offices in Dubai, Melbourne (Australia), New York, London, and Bogotá (Colombia). For additional information, please visit www.kit-digital.com.
Forward-Looking Statements
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of ROO Group, Inc. could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rates and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.
Contact:
Investor Relations/Public Relations
Todd Fromer/Lewis Goldberg
KCSA Strategic Communications
T: +1-(212)-896-1215 / 1216
E: tfromer@kcsa.com / lgoldberg@kcsa.com
