IFOX Investments AB (publ) agrees acquisition of Score Music Interactive Ltd

IFOX Investments AB (publ) (“IFOX”) has agreed to acquire (the “Acquisition”) 100% of all outstanding shares of Score Music Interactive Ltd (“Xhail”), which has developed a patented software to create great original music at the click of a button. As a result of this, IFOX will conduct a share issue package, change its name to Xhail Music AB (publ) and make changes to the Board of Directors and management of the company, as described below. 

The Acquisition

IFOX has agreed to, subject to completion of the Share Issues (as defined below) and approval of the Acquisition at an Extra General Meeting of the shareholders of IFOX to be held on May 13, 2020, in Stockholm (the “EGM), and subject to prior approval by the shareholders of Xhail, acquire 100% of  all outstanding shares in Xhail.

Xhail was founded by musician and businessman Mick Kiely in 2013 and is headquartered in Dublin with its main sales and business development office in West Hollywood, Los Angeles, California. The website is www.xhail.com.

Xhail puts music creation in the hands of non-musicians, it produces music using single instrument performances by real musicians. This means everyone can create great music. 

The technology is cloud-based and creates new music copyright of stunning quality in real-time. The patented technology combines stems (single instrument performances) into fully finished tracks of any chosen style and instrumental alternatives. Every new music track created is unique.

Xhail uses recorded stems to create music. Xhail’s technology uses musical mathematics to create a music track that makes sense when it is heard. Xhail selects several musical stems and assembles them into a new unique music composition. The music created by the Xhail platform is always pleasing to the user’s ear. If you want a new pop track, you get a new pop track; if you want a hip-hop track, you get a hip-hop track; or you can combine them. The applications are endless.

The current platform creates instrumental music, a further patented feature under development allows the user to upload a vocal track and the system will create great music around that vocal track.

The product is ready for commercial rollout during 2020. The target market is mainly in the consumer space but also in the B2B space.

Share Issues

Subject to the decision of the EGM, IFOX will in connection with the Acquisition, conduct a fully guaranteed rights issue of SEK 25,110,555.84 (the “Rights Issue”) combined with a directed share issue (the “Directed Share Issue”) of up to SEK 30,000,000. The subscription price for the Rights Issue and the Directed Share Issue is SEK 0.12 per share. A further SEK 24,000,000 can be raised through a green shoe option (an authorization for the Board of Directors to decide on the issue of a maximum of 250 000 000 shares in order to accommodate any oversubscription in the Rights Issue), at the same subscription price (the “Green Shoe”). The Rights Issue will at full subscription result in 209 254 632 new shares in IFOX. The Directed Share Issue will at full subscription result in 250 000 000 new shares in IFOX. The Green Shoe will upon full usage result in 200 000 000 new shares in IFOX. The Rights Issue, the Directed Share Issue and the Green Shoe are referred to as the “Share Issues”. 

Important dates for the Share Issues:

13 May, 2020                                 Extra General Meeting of shareholders, deciding on the Share Issues

20 May, 2020                                 Records day, Rights Issue

25 May – 8 June, 2020                 Subscription period, Rights Issue & Directed Share Issue

An Information Memorandum for the Rights Issue will be published ahead of the subscription period.

The consideration for all outstanding shares in Xhail amounts to a maximum of SEK 228,000,000 and will on closing of the Acquisition be paid by the issuance of one or more debt notes of the equivalent amount, that immediately will be converted to a maximum of 1 900 000 000 newly issued shares in IFOX at a subscription price of SEK 0.12 per share.

The current number of shares in IFOX (before the Shares Issues) is 69 751 544 shares.

To execute the Share Issues, and to make other necessary decisions in connection with the Acquisition, IFOX has today published summons for the EGM to be held on May 13, 2020, in Stockholm. Further details of the EGM can be found below under the sub section “the EGM”.

The Future Xhail Group

IFOX will be the new parent company in the group, with two subsidiaries in Ireland and one in the United States (IFOX together with Xhail and its subsidiaries are referred to as the “Group”). IFOX intends to apply for listing at a relevant stock exchange as soon as the Share Issues and the Acquisition has been completed.

CEO for the Group will be Mr. Peter Swartling, who is known globally for his achievements in the music industry from leading positions for BMG as well as in Sony Music in New York. He has also an entrepreneurial background, having built and sold a tech company before entering the music business. He has in recent years been the CEO of an industry company and the combination of understanding of development, music and building an organisation is a very strong background to contribute to the roll-out and growth of the Group. Mr. Swartling will be based in Stockholm.

Mr. Swartling has also introduced one of the World’s leading songwriters and producers, who also has a background as a successful businessman, to a senior role in the Group in content- and business development, based in Los Angeles. He will contribute, together with the Group’s current strong team in Dublin, to the development of the content of the platform.

Additionally, the persons involved in the Group have managed to secure a strong Board of Directors that can assist the Group in the coming build-up phase. The names of the proposed Board of Directors will be communicated ahead of the EGM.

Subject to approval of the Acquisition and completion of the Share Issues, Xhail will be the sole business of IFOX and any other agreements concerning IFOX previous business will be terminated. 

The EGM

The EGM (summons published separately in Swedish) will have the following main agenda:

• Approval of the Acquisition of the shares in Xhail
• New Articles of Association no 1 (new name, new business description, new accounting year, new limits for the number of shares and limits of the share capital)
• Decision regarding the Rights Issue
• Decision regarding the Directed Share Issue
• Decision to authorize the Board of Directors to decide on the issue of shares with deviation from the shareholders pre-emption rights
• Decision to issue warrants with attached options to subscribe for new shares (Sw: Teckningsoptioner) directed towards the senior management of IFOX
• Number of members of the Board of Directors to be elected and their remuneration
• Election of Board members (names to be provided ahead of the EGM)
• New Articles of Association no 2 (new limits for the number of shares and limits of the share capital)
• Share issue directed towards the sellers of all outstanding shares in Xhail

IFOX Investments AB (publ)

Board of Directors

Per Weithz, Chairman                   Thomas Häggkvist                          Anders Thorsell

For further information, please contact:

Anders Thorsell, for the Board of Directors

Email: anders@ifoxinvest.com

IFOX Investments AB is an investment company based in Stockholm, Sweden.