Coronavirus

Internal Documents Show KAABOO Founders Raised $57M in Equity and Held $9.2M in Debt Before It Was Sold

Jon Foreman of Switchfoot
Taylor Hill/Getty Images

Jon Foreman of Switchfoot performs during the 2019 KAABOO Del Mar Festival at Del Mar Race Track on Sept. 14, 2019 in Del Mar, Calif.

Editor's Note: This story accompanies Billboard's report KAABOO Festival Was Almost Canceled, So Why Are the Founders Suing the Man Who Saved It?

The KAABOO festival in Del Mar was facing a serious liquidity crisis before it was sold to a group led by former partner Jason Felts on Sept. 12, according to financial documents obtained by Billboard.

In an Oct. 11 letter mailed to investors one month after the $10 million closed, founders Bryan Gordon and Seth Wolkov detailed the circumstances that created a liquidity crisis for the the five-year-old festival and brand and laid out the pro-forma debt and equity capitalization of the festival brand prior to the sale with total debt, liabilities and equity equally $69 million. 

Here's how those costs broke down   

DEBT

$1.8 million in the form of a talent deposit loan ffrom Gemini Finance, which held a lein on the festivals assets. This loan was repaid with the proceeds of the sale.

$2.3 million from a senior loan from an unknown source that would increase to $2.6 million on Nov. 1, 2019.

$3.9 million due to Blue & Silver, an investment entity controlled by the family of Dallas Cowboys owner Jerry Jones covering half of the expense overages for KAABOO Texas.

$1.1 million owed to Dart, the festival's partners in the Cayman Islands

LIABILITIES

$1.6 million listed in accounts payable 

$805,000 listed at accrued transaction costs and investment banking fees

EQUITY

$13.6 million in convertible preferred equity raised through a series a round 

$9.2 million in common equity from outside investors

$31.9 milion listed as total management invested equity

$3.1 million in management incentive pool vested equity


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.