AirMedia Refutes Report On Investment Transaction

(RTTNews) - Responding to allegations raised in an article posted on seekingalpha.com on April 28, 2015, AirMedia Group Inc. (AMCN) said it believes that the allegations and accusations set forth in the article are false and inaccurate and contain numerous errors of facts, misleading speculations and malicious interpretations of events.

On Tuesday, seekingalpha reported that AirMedia had more than doubled in the past few weeks based solely on a supposed "investment" by A share company Shenzhen Liantronics. AirMedia did not disclose the actual contract, but did put out a press release touting a $500 million valuation. The real contract revealed that there is no binding deal. In fact, Liantronics had not even conducted due diligence. Liantronics management had verified key details.

But, AirMedia today said that the claim that Liantronics has not even conducted due diligence in connection with the Transaction is erroneous. Liantronics engaged a major PRC accounting firm, a recognized PRC law firm, a qualified PRC assets appraisal company and a recognized PRC financial advisory firm to conduct due diligence of AM Advertising in March 2015.

AirMedia Group announced on April 7, 2015 to sell 5% equity interest of its PRC affiliated entity, AirMedia Group Co., Ltd. or "AM Advertising" to Shenzhen Liantronics Co., Ltd. It intends to sell the remaining equity interests of its advertising business in the foreseeable future so that we can focus our resources on the exciting Wi-Fi business.

AirMedia and Liantronics are listed companies in the United States and China, respectively.The Transaction between the two companies is arms-length and serious.

AirMedia requested and have obtained a call option which provides that "during the period of 75 calendar days after Shengshi Lianhe receives full payment from Liantronics, AirMedia may elect to sell its equity interest in AM Advertising to third parties, and if AirMedia so elect, Shengshi Lianhe will repurchase such 5% equity interest from Liantronics for an amount equal to RMB150 million plus applicable fees."

Several unrelated parties have expressed interest in buying equity interests of itsadvertising business and AirMedia would like to preserve the ability to evaluate other potential offers and enter into transactions with the party or parties that will give AirMedia the most satisfactory terms.

In exchange for our call option, Liantronics requested and has obtained a put option to revoke the Transaction after the expiration of the Waiting Period.

"Although AirMedia had consolidated net loss, our stand-alone digital frames, mega-size LED screens, traditional media in airports and unipole sign and other outdoor media out of airports, which will be the business lines left in AM Advertising after we sell the advertising business, have been profitable for years and we believe they will continue to be profitable in 2015," Herman Guo, AirMedia's chief executive officer said in a letter to its shareholders.