VANCOUVER, BC, Feb. 5, 2021 /CNW/ - LEAF Mobile Inc. (TSXV:
LEAF) ("LEAF" or the "Company") is pleased to
announce that it has completed its previously announced acquisition
(the "Acquisition") of East Side Games Inc.
("ESG").
"We are tremendously excited to officially welcome East Side
Games, a leading Canadian publisher and developer of mobile games,
to the LEAF Mobile family," said Darcy
Taylor, Chief Executive Officer of LEAF Mobile Inc. "ESG has
an outstanding track record of bringing world class franchises to
life and providing top tier mobile experiences to their users. The
values and a purpose-driven mentality within ESG's team culture are
strongly aligned with LEAF's. We are confident that this
acquisition will generate significant long-term shareholder value
and we look forward to continuing to add top-tier, like-minded
studios to the LEAF Mobile family moving ahead."
"The team at ESG is extremely excited to take this massive next
step in our journey. By amalgamating our assets and talent with
LEAF Mobile, we become one of, if not the leading, publicly traded
mobile game company in Canada.
Now, together with LEAF, we look to supercharge our game growth and
secure new IP licenses, while adding bench talent and
diversifying our successful game portfolio. In my new role as Chief
Revenue Officer of LEAF Mobile, I look forward to executing our
M&A strategy and building development partnerships for our
IdleKit platform. We are confident that the framework we have built
in the IdleKit product will change how game development is done
industry wide," states Jason Bailey,
cofounder of ESG and now Chief Revenue Officer of LEAF Mobile.
The Acquisition
Pursuant to the Acquisition, LEAF acquired all of the issued and
outstanding securities of ESG, such that ESG is now a wholly-owned
subsidiary. In consideration, ESG paid a purchase price of
approximately $159 million, after
reflecting positive adjustments for ESG's cash and working capital
at closing. Payment was comprised of approximately $19 million in cash, and the issuance of
444,444,444 common shares of LEAF ("LEAF Shares").
The remainder of the purchase price is contingent upon LEAF
reaching certain milestones. If LEAF receives $100 million in gross revenue, on a consolidated
basis, on or before February 5, 2022,
the ESG securityholders will receive an additional $10 million in cash, and an additional
$10 million payable in cash and/or
LEAF Shares at the direction of Jason
Bailey, as representative of the ESG
securityholders. Further, if LEAF receives $150 million in gross revenue in the subsequent
12 month period (ending February 5,
2023), the ESG securityholders will receive a further
$10 million cash, and a further
$10 million in cash and/or LEAF
Shares, at the direction of Jason
Bailey, as representative of the ESG securityholders. If
LEAF Shares are selected, they will be issued at $0.225 per share, to a maximum of 88,888,888 LEAF
Shares.
The LEAF Shares issued under the Acquisition are subject to
"lock-up" agreements for a period of 36 months in favour of Eight
Capital, Haywood Securities Inc., Paradigm Capital Inc. and Scotia
Capital Inc. (collectively, the "Agents"), agents of LEAF
with respect to its recently completed offering (the
"Offering") of subscription receipts (the "Subscription
Receipts"). Please see LEAF's news release dated
February 4, 2021 with respect to the
Offering. One-third of such shares will be released from the
"lock-up" agreements on an annual basis.
New Directors and Officers
On completion of the Acquisition, Jason
Bailey, chief product officer of ESG, has been appointed as
Chief Revenue Officer of LEAF, and as a director to LEAF's board of
directors.
Additionally, Mike Edwards,
Jonathan Bixby and Birgit Troy have each been appointed as
directors of LEAF. Mr. Edwards will also serve as the Chair of
LEAF's board of directors.
Darcy Taylor, Ian MacLeod and Mark
Rutledge have resigned as directors of LEAF. Mr.
Taylor will continue in his role as CEO of LEAF. LEAF thanks
Messrs. MacLeod and Rutledge for their service.
A total of 24,000,000 incentive stock options have been granted
to Mr. Taylor and the directors, exerciseable at $0.225 per share for a period of five years,
subject to LEAF's incentive stock option plan.
Conversion of Subscription Receipts
Concurrent with the completion of the Acquisition, the
Subscription Receipts of LEAF will convert automatically into LEAF
Shares on a one-for-one basis, such that 102,222,221 LEAF Shares
will be issued. The conversion will take effect on
February 8, 2021.
Proceeds from the Offering were released from escrow and used
primarily to fund the payment of the cash consideration payable
under the Offering. Additionally, Haywood Securities Inc.
received an advisory fee of 4,268,825 LEAF Shares.
Graduation to Toronto Stock Exchange
LEAF has also received approval to list the LEAF Shares for
trading on the Toronto Stock Exchange. As a result, the LEAF
Shares will be delisted from the TSX Venture Exchange. Trading
of the LEAF Shares on the TSX Venture Exchange will remain halted
until delisting. Trading of the LEAF Shares under the symbol
"LEAF" will commence on the Toronto Stock Exchange at the open of
markets on February 10,
2021.
About East Side Games
East Side Games, was founded in 2011 and has become of the most
recognised independent developer and publisher of free to play
mobile games. Headquartered in Vancouver,
British Columbia, they have focused on making the best
narrative idle games in the business, and creating the technology
for developers to tell amazing stories.
With a track record of over a decade of producing successful
titles. ESG currently publishes and operates successful franchise
titles including Archer: Danger Phone, Dragon Up: Idle
Adventure, The Goldbergs: Back to the 80s, It's Always Sunny: The
Gang Goes Mobile and Trailer Park Boys Grea$y Money.
East Side Games was recently recognised on the "Top 50 Mobile
Game Makers 2020" list compiled by Pocket Gamer Biz, on the
"Canada's Top Small & Medium
Employers" list compiled by Canada's Top 100, as well as on the
"Canada's Top Growing Companies
2019" list compiled by Globe & Mail Report on Business and 2020
Red Herring Top 100 North America Winners.
East Side Games strongly believes in community-driven design,
making games built for fans by fans, and having the best culture
around. Their games and their team have the same goal; to be
inclusive and for everyone.
For more information, visit www.eastsidegames.com.
About LEAF
LEAF Mobile Inc. (TSXV: LEAF) is a leading free-to-play mobile
game group, creating engaging games that produce enduring player
loyalty. Our studio groups entrepreneurial culture is anchored in
creativity, execution and growth through a diverse portfolio of
original and licensed IP mobile games that include; Archer:
Danger Phone, Dragon Up: Idle Adventure, The Goldbergs: Back to the
80s, It's Always Sunny: The Gang Goes Mobile and Trailer Park Boys
Grea$y Money. Cheech & Chong Bud
Farm, Bud Farm Idle Tycoon, Bud Farm Grass Roots and Bud Farm 420.
We are headquartered in Vancouver,
Canada, and its common shares will be listed for trading on
Toronto Stock Exchange. Our games are available worldwide on
the App Store and Google Play. For further information, please
visit: www.leafmobile.io and join our online communities at
Linkedin, Twitter, Facebook, and Instagram.
ON BEHALF OF THE BOARD
Darcy Taylor
CEO
Suite 909 - 510 Burrard Street, Vancouver, BC, V6C 3A8
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.
SOURCE Leaf Mobile Inc.