Loop cuts links to sex toysMichael Sainsbury April 27, 2007...

Loop cuts links to sex toys
Michael Sainsbury
April 27, 2007

LOCAL mobile chatroom software group Loop Wireless has unwound last year's sale to Adultshop.com and will instead raise $5 million through a stock market float.
Allco Equity Partners chief executive Peter Yates will spend $1.25 million on a 12 per cent share in the company as it moves to cut all ties with Adultshop.
Loop will cancel shares issued to it by Adultshop and in turn issue shares to the online sex toys group's shareholders in compensation for $1.5 million spent on Loop since Adultshop bought it in a scrip deal last June.

Adultshop's 3000 shareholders will receive 20 million shares, or 33 per cent of the total.

Loop, which is headed by former ninemsn chief Martin Hoffman, was founded in late 2004 by Ian Rodwell, a "serial entrepreneur" in multimedia graphics. It previously raised money from Singapore-based investor Greg Kennedy.

Mr Hoffman said the connection with Adultshop was a "reputational" problem for Loop that affected "potential growth of the business".

Mr Hoffman will hold 3 per cent of the company.

Loop provides mobile phone companies with chatroom software using its own retail brand, MOKO (recently changed from Kink). Loop operates revenue sharing with phone companies based on customer usage.

It also provides "white label" services for companies wanting to have branded chat capability on mobiles. Such services are being provided to Big Bother, the AFL and the NRL.

Mr Hoffman said Loop would have revenues of about $1.5 million but would not make any further revenue forecasts.

"We have a solid pipeline of potential deals in Europe, North America and Australasia," Mr Hoffman said.