NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
CALGARY, Alberta, March 13, 2019 (GLOBE NEWSWIRE) -- Gegs Capital Corp. (the "Corporation" or "Gegs") (TSXV – GEGS.P), and UMG Media Corp. ("UMG") are pleased to announce they have entered into a letter of intent dated March 5, 2019 (the "Agreement") with respect to a combination of both companies (the "Transaction") whereby Gegs will acquire all of the issued and outstanding common shares of UMG. Upon completion of the Transaction the combined company will be renamed UMG Media Ltd. (the "Resulting Issuer"). It is expected that the Resulting Issuer will be a Technology Issuer, subject to TSX Venture Exchange Inc. ("TSXV") approval. The Transaction is an arm’s length transaction.
The Transaction will be undertaken by means of a plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia). Following completion of the Transaction, Gegs will issue approximately 144,724,209 common shares (the "Gegs Shares") in the capital of Gegs to UMG shareholders, for aggregate deemed consideration of $27,500,000 (or $0.19 / Gegs Share), excluding any Gegs Shares issuable on exercise of existing UMG warrants and options, which will constitute approximately 91% of the then outstanding Gegs Shares. UMG shareholders will receive 9.0801 Gegs Shares for each UMG share they currently hold.
As of the effective date of the Transaction, all outstanding UMG warrants and options will remain outstanding and will continue to be governed by the terms and provisions of the warrant certificates and option commitments, respectively; however, the holder will be entitled upon the exercise thereof to receive Gegs Shares based on the above noted exchange ratio of 9.0801. If completed, the Transaction is expected to constitute the Corporation's qualifying transaction for the purposes of the applicable policies of the TSXV.
As part of the Arrangement, and subject to Gegs shareholder approval, the Resulting Issuer will undertake a share consolidation of the Gegs Shares (the "Gegs Consolidation"). The consolidation will occur on the basis of one consolidated share of Gegs for every two Gegs Shares outstanding.
The Corporation and UMG have also agreed that as a condition to the completion of the Transaction, UMG will complete a financing of no less than $500,000 (details of which will be provided in a future press release). This financing may be done as a private placement of UMG securities or through the exercise of currently outstanding UMG convertible securities.
Trading in Gegs Shares on the TSXV has been voluntarily halted and will remain so until the documentation required by the TSXV has been reviewed and accepted by the TSXV.
UMG, a BC incorporated company, is a premier eSports company in North America, offering gaming entertainment, live events and online play. UMG entered the eSports industry in 2016 with the acquisition of UMG Events LLC ("UMG Events") which was founded in 2012 and is actively involved in many aspects of the eSports industry. UMG is deeply ingrained in the gaming community and very well-established within the competitive gaming sector with approximately 2.1 million registered users and over 18 million matches played live and online through its platform. Readers can learn more about UMG and its eSports offerings at www.umggaming.com.
UMG is a diversified eSports company that has operations involved in
- Live Tournaments
- Online Contests
- Casino eSports Operations
- Creation and Distribution of Original Content
- eSports Tournament Operations through its proprietary tournament management app
Selected UMG Financial Information
The following table contains selected annual financial and operating information with respect to UMG and has been derived from UMG's audited financial statements for the fiscal periods ended December 31, 2017 and 2016 and management prepared financial statements for the period ended December 31, 2018:
| Audited Dec. 31, 2016 (US$) | Audited Dec. 31, 2017 (US$) | Unaudited Dec. 31, 2018 (US$) | ||||
| Total Revenue | 2,325,535 | 2,351,937 | 2,350,725 | |||
| Net Comprehensive Income (Loss) | (653,491 | ) | (2,667,149 | ) | (3,449,833 | ) |
| Total assets | 3,420,423 | 6,911,129 | 3,770,428 | |||
| Long term financial liabilities | 446,600 | 357,374 | 19,423 | |||
| Total Shareholders' Equity | 1,430,622 | 5,033,840 | 3,149,583 | |||
Management and Directors
Following the closing of the Transaction, management of the Corporation. will be comprised of Dave Antony, Chief Executive Officer; Martin Brown, Chief Operations Officer, Charidy Lazorko, Chief Financial Officer, Shelly Scism, Chief Compliance Officer, and Ryan Summers, VP of Operations.
The Board of Directors is contemplated to be comprised of David Antony, Martin Brown, Ray Antony, Scott McGregor and Hector Rodriguez. The management team and Board of Directors have extensive experience in the eSports and digital entertainment industries, along with significant experience in both the Canadian and American public markets. Background information for each of the key members are set out below.
Dave Antony – CEO, Proposed Director
Dave has over 25 years of experience assisting companies in structuring transactions, accessing capital, and corporate governance. Dave has been involved as an officer and director of many private and public companies. Dave has been involved in various industries including daily fantasy sports, digital media contests, and consulting services companies.
Martin Brown - COO, Proposed Director
Martin founded a private software development company specializing in algorithmic trading in the sports and horse racing betting markets. Martin operated it successfully for 16 years making it one of the largest private sporting markets trading companies, before selling his interest in 2013.
Charidy Lazorko - CFO
Charidy is a CPA, CGA with over 13 years of private and public company experience. Charidy has been involved as an officer in numerous companies providing financial services, with an emphasis in corporate restructuring, amalgamations and asset acquisitions, and she has acted as a financial advisor for a multitude of other private transactions in the digital asset and resources industries.
Shelly Scism – Compliance Manager
Shelly has over 7 years experience in both the financial and compliance aspects of the eSports industry. She has extensive experience in all components of user operations and compliance.
Ryan Summers – Manager of Operations
Ryan has been in the eSports industry for over 10 years, including 5 years as a pro player and recently as a manager for a professional eSports organization. He has over a decade of competition, event, and operations experience.
Trevor Wong-Chor – Corporate Secretary
Trevor is a partner at DLA Piper (Canada) LLP. and has over 30 years of experience with both private and public companies.
Ray Antony – Proposed Director
Ray has over 30 years of experience with both private and public companies. He has provided financial and corporate governance services as both an officer and director in numerous industries.
Hector Rodriguez – Proposed Director
Hector was the CEO and owner of the OpTic Gaming organization. Hector developed the OpTic brand, building OpTic into one of the largest pro eSports brands. He has helped build the eSports community for numerous titles, such as COD and Halo. He is an accomplished businessman, landing major sponsors for OpTic in recent years.
Scott McGregor - Director
Mr. McGregor has 20 years of investment banking experience. He recently served as Executive Vice President and director of Merrco Payments, a secure payment gateway that provides a fully customizable method to regulate amongst other, online and POS sales of cannabis within Canada. Mr. McGregor has his B. Comm from Queens University and a M.B.A. from Rotman School of Business (University of Toronto).
The board of directors of each of Gegs and UMG unanimously support the Transaction, and have determined that the Transaction is in the best interest of shareholders of Gegs and UMG, respectively.
Gegs intends to apply to the TSXV for a waiver from sponsorship requirements. There is no assurance that such waiver will be granted.
The proposed Transaction is not a Non Arm’s Length Qualifying Transaction pursuant to Section 2.1 of TSXV Policy 2.4 and, as such, Gegs is not required to obtain shareholder approval for the proposed Transaction. However, Gegs intends to hold a meeting of shareholders to approve certain matters ancillary to the proposed Transaction, including a consolidation and name change, effective upon or following Closing.
Trading in Gegs Shares on the TSXV is halted and will remain so until the documentation required by the TSXV has been reviewed and accepted by the TSXV.
This is an initial press release. The Corporation plans to issue a further press release once it has entered into the transaction agreement and to provide additional information related to the concurrent financing.
For further information please contact:
Dave Antony
Chief Executive Officer
(403) 531-1710
dantony@umggaming.com
Reader Advisory
Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including details about the Transaction. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks, competition from other industry participants, stock market volatility, the risks that the parties will not proceed with the Transaction, that the ultimate terms of the Transaction will differ from those that currently are contemplated and the ability to access sufficient capital from internal and external sources. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied on. Trading in the securities of Gegs Capital Corp. should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved or disapproved the contents of this press release.
All information contained in this press release with respect to the Corporation and UMG was supplied by the Corporation and UMG, respectively, for inclusion herein.
This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws.