VANCOUVER, BC, Oct. 7, 2020 /CNW/ - LEAF Mobile Inc. (TSXV:
LEAF) ("LEAF" or the "Company") announces that it has
entered into a letter of intent (the "LOI") dated
October 6, 2020 with East Side Games
Inc. ("East Side Games").
Acquisition
Pursuant to the LOI, LEAF will acquire all of the securities of
East Side Games (the "Acquisition") for $150 million (the "Purchase Price"), the
payment of which will be comprised of $50
million in cash, and that number of LEAF common shares
("LEAF shares") that will represent 50% of the issued and
outstanding LEAF shares on Closing.
Completion of the Acquisition is conditional upon, among other
things, LEAF obtaining conditional approval from the Toronto Stock
Exchange to list the LEAF shares for trading on that exchange.
The Acquisition will be completed on a "cash free, debt free"
basis, and thus the Purchase Price will be subject to adjustment to
reflect same.
East Side Games is currently a "control person" of LEAF by
virtue of holding more than 20% of the issued and outstanding LEAF
shares. As such, completion of the Acquisition will be
subject to, among other things, LEAF obtaining all necessary
shareholder approvals.
The Acquisition is subject to numerous conditions precedent,
including but not limited to the following:
- Satisfactory due diligence investigations by each party of the
other, including without limitation, the audited financial
information of East Side Games when available;
- The negotiation and execution of definitive agreements;
- Receipt of all necessary prior approvals, including LEAF
shareholder approval and the approval of the TSX Venture Exchange;
and
- Receipt of conditional approval of the Toronto Stock Exchange
for the listing of the LEAF shares at Closing, as described
above.
There is no assurance that all of the conditions precedent will
be satisfied or waived, or that the Acquisition will close on the
basis outlined above, or at all.
In conjunction with the completion of the Acquisition:
- LEAF may change its name to better reflect its resulting
corporate and business structure;
- There will be a change of management within LEAF;
- LEAF will undertake an equity financing to raise at least
$50 million; and
- The issued and outstanding LEAF shares at Closing (including
those issued under the Acquisition and the financing) will be
consolidated on a basis of up to ten (10) "old" shares for every
one (1) "new" share.
East Side Games
East Side Games is a private British
Columbia company based in Vancouver, British Columbia. It is a
leading publisher and developer of mobile games. Founded in 2011 by
game industry veterans, it has created chart topping hits for top
Hollywood brands as well as Canadian superstars The Trailer Park
Boys. This year, East Side Games has been recognized with
numerous awards such as a "top 50 game maker in the world" award,
as one of Canada's top small and
medium employers, as well as one of Canada's fastest growing companies.
Financing
LEAF will undertake an equity financing of its securities for
gross proceeds of at least $50
million. Terms of the financing will be announced once
settled. However, under the terms of the Acquisition, the
LEAF shares comprised in any securities offered under the financing
will not exceed more than 25% of the issued and outstanding LEAF
shares at Closing.
Taken together, the Acquisition and the financing will
constitute a "reverse takeover" under the policies of the TSXV.
Management
Upon completion of the Acquisition, the directors and officers
of the Resulting Issuer will be as follows:
Darcy Taylor - CEO and
Director
Darcy is currently CEO and a director of LEAF, and has over 20+
years of senior executive experience building successful companies
and brands spanning Asia,
Europe and North America. He
has a proven track record in senior leadership roles in private and
public companies, including IMG, Logic Technologies, JT
International S.A. and MASEV Communications Inc. His
experience includes corporate, agency and entrepreneurial
environments across Fin Tech, Blockchain, FMCG/CPG, Sports &
Entertainment, and Digital Marketing & Media industries.
Mark Leung - CFO
Mark is currently CFO of LEAF, and has over 15 years of
experience in finance and accounting. He has diverse industry
experience, including investment management, telecommunications and
gaming.
Jason Bailey - Chief Revenue
Officer
Jason is a founder and CEO of East Side Games. Jason is a true
entrepreneur, having founded many successful businesses over the
past 20 years. He is also a mentor to and investor in a variety of
Canadian start-ups and tech companies. Jason started his climb in
the games industry when he was the BC ColecoVision Champion in
1983. He was also a founder of Super Rewards, which he sold
in 2009, a social game monetization platform which helped pioneer
the "free to play" game model that is ubiquitous today.
Brian Wideen - VP
Finance
Brian is currently VP Finance of LEAF, and has vast experience
in executive roles in small and large companies, including in
telecom, video games and media. His experience includes
thirteen years at Electronic Arts Canada, running large franchises
including as Chief Operating Officer for "Need For Speed".
Brian is also a co-founder of CineCoup Media (now "The Coup
Company"), building a digital media platform to find, finance and
distribute content. Brian is also a co-founder of Beats Easts
Life Incorporated, a hospitality company with restaurants in
Toronto. He currently also holds the role of VP Finance for
Growthworks Capital Ltd. ("GWC").
Derek Lew - Director
Derek is currently a director of LEAF, and the President, CEO
and a director of GWC, and the President, CEO and/or a director of
certain managed funds and operating subsidiaries of GWC, all of
which are active venture capital investors. Derek is also a
partner with Initio Group Inc. ("Initio"), a Vancouver-based early stage angel investment
firm, and is a lawyer with experience in corporate, commercial and
real estate law. Derek has also served as Chair of the
British Columbia Innovation Commission (now "Innovate BC") through
2013 to 2018.
Mike Edwards -
Director
Mike has a wealth of experience in building and scaling consumer
technology companies in private and public markets. He was a
co-founder of AreaConnect.com, a consumer content company acquired
by Marchex, a NASDAQ-listed company, in 2008; a co-founder of Wyley
Interactive, a mobile game engagement platform, acquired by Zynga,
a NASDAQ-listed company, in 2014; a co-founder of Creative Labs, a
venture capital-backed startup foundry that builds consumer
technology companies by leveraging the Creative Artist Agency's
access to talent and audience; a co-founder of Ground Control, a
conversational skill and AI platform launched on the Amazon Alexa
platform, and a co-founder of Guild eSports PLC, an e-sport gaming
franchise co-founded with David
Beckham and listed on the LSE.
Other Matters
Trading of the LEAF shares will remain halted pending completion
of the Acquisition, subject to earlier re-commencement of trading
only upon TSXV approval and the filing of required materials with
the TSXV as required by their policies.
LEAF has not engaged a sponsor in connection with seeking TSXV
approval with respect to the Acquisition. It intends to seek
a waiver from any such requirement to engage a sponsor.
Completion of the Acquisition is subject to a number of
conditions, including but not limited to TSXV acceptance and
majority of the minority shareholder approval. The
Acquisition cannot close until the required shareholder approval is
obtained. There can be no assurance that the Acquisition 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 Acquisition, any information released or received with respect
to the Acquisition may not be accurate or complete and should not
be relied upon. Trading in the securities of LEAF should be
considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed
Acquisition and has neither approved nor disapproved of the
contents of this news release.
Additional information in connection with the Acquisition and
the financing will be provided in subsequent news releases.
About LEAF
LEAF Mobile Inc. (TSX.V: LEAF) is a leading creator of
counterculture mobile games. Headquartered in Vancouver, with a premier development studio,
LDRLY, based in Nanaimo, British
Columbia, the company is highly skilled in intellectual
property, mobile game development, marketing and publishing. LEAF's
culture is anchored in creativity, data insights and execution,
delivering highly engaging games that produce enduring player
enjoyment. With over a decade of experience in game development and
marketing, LEAF has consistently delivered high-grossing original
and licensed IP titles that include Cheech & Chong Bud Farm, Bud Farm Idle Tycoon,
Bud Farm Grass Roots and
Bud Farm 420. Our game titles
are available worldwide on the App Store and Google Play. LEAF
leverages successes in platform, IP, marketing, development and
data analysis to maximize value for our global network of
constituents, from players to talent to shareholders and
beyond.
For more information and to keep current on LEAF, visit
www.leafmobile.io and join our online communities at Linkedin,
Twitter, Facebook, and Instagram.
ON BEHALF OF THE BOARD
Darcy Taylor
CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains "forward-looking information" within
the meaning of applicable securities laws. Such information
includes, without limitation, information regarding the completion
of the proposed Acquisition, and the anticipated management of LEAF
subsequent to the completion of the Acquisition.
Although the Company believes - considering the experience of
its officers and directors, current conditions and expected future
developments and other factors that have been considered
appropriate - that the expectations reflected in this
forward-looking information are reasonable, undue reliance should
not be placed on them as the Company can give no assurance that
they will prove to be correct. Actual results and developments may
differ materially from those contemplated by these statements. The
statements in this news release are made as of the date of this
release. The Company is under no obligation, and expressly
disclaims any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as expressly required by
applicable law.
SOURCE Leaf Mobile Inc.