Mirriad, Nearly 'Out Of Funds' in Feb., Now Expected To Close New Financing Round

Mirriad, the "retroactive" ad placement company which launched in the U.S. last year, has had a tough time gaining a foothold, according to a Feb. 2 memo to shareholders recently obtained by Billboard. At the time, Mirriad chairman Roger Faxon (recently announced to be joining the board of Pandora) wrote, "Without further investment we will run out of funds to operate the business in a matter of weeks."

But a Mirriad spokesperson tells Billboard that the company should soon be back in good standing, saying in a statement, "Mirriad will shortly close on a Series B round of financing from a consortium of current and new investors, which will accelerate the company's market strategy, spur revenue growth, and expand its delivery of native in-video advertising on a global basis. Mirriad's proprietary technology is well positioned to benefit from multi-screen viewing and native advertising -- both among the hottest trends in media and entertainment.  Investors recognize that we offer value to both the advertiser and content owner. This latest round will fund scale and bring Mirriad's technology to more parts of the globe, including the US."

Faxon, who was appointed Mirriad's chairman in December 2013, wrote in his initial memo that an unnamed investor was expected to pledge $7.5 million in funding to support the company’s continuing effort to penetrate the U.S. market. That $7.5 million is predicated on the the company securing a matching $7.5 million in funding. "This could not have come at a more critical moment," Faxon wrote.

The Feb. 2 memo outlined a restructuring of the company's stock and management, stating that the new investments will constitute a 40% ownership in the company, and result in the creation of a new class of shares -- "Class A Preferred" -- holders of which would be given management authority and guarantees over Mirriad's "lower-tier" shares, which would "suffer a substantial dilution" following the investment. Class A Preferred shareholders will have protection against dilution, approval rights (via majority) over the issuing of additional shares, the assumption of any debt over $500,000, company sale approval and the right to instigate a sale.

"Over the coming weeks, we will be moving with great speed to complete this transaction before we exhaust our resources," wrote Faxon in the Feb. 2 memo, "clearly the consequences of not meeting this timetable are substantial," wrote Faxon.

The news is a bit surprising considering Mirriad's unique product offering, which lets product placements -- from a billboard in the background of a shot to a bottle of whiskey on a table -- be retroactively inserted into a frame, which the company spent years developing and which helped them to secure television clients around the world, well before its partnership with Vevo last year. "We are definitely premium [-priced] advertising for premium content," COO Ted Mico told Billboard around the time of its Vevo partnership.

In other Faxon news, the former EMI chairman announced earlier this week announced an appointment to Pandora's board of directors. In a guest post for Billboard, Faxon declared Pandora was "only one part of a solution to ensuring that the creators of music have the resources they need and deserve."

Since then, the company announced a partnership with Universal Music Group, for product placements within the company's "family friendly" music videos.