TORONTO, Jan. 8, 2024
/CNW/ - OverActive Media Corp. (TSXV: OAM) ("OverActive" or
the "Company") is issuing this press release at the request
of the TSX Venture Exchange to provide additional details with
respect to the Acquisitions.
On January 4, 2024 OverActive
announced that it had entered into a non-binding letter of intent
on that day (the "LOI") with Goatch Global, S.L.
(operating as "KOI") and Team Randomk Esports S.L.,
(operating as "Movistar Riders") setting out the terms of
the Company's proposed acquisition of (i) certain assets used in
connection with KOI's esports operations from KOI (the "KOI
Assets Acquisition") and (ii) all of the issued and outstanding
shares of Movistar Riders (the "Movistar Riders Shares
Acquisition", and collectively with the KOI Assets Acquisition,
the "Acquisitions"). The LOI sets out the terms upon which
OverActive, Goatch and Movistar Riders have agreed to proceed with
the Acquisitions. The Acquisitions remain subject to OverActive
board approval and the execution of the definitive agreements.
Certain Historical Financial
Information
As indicated in the Company's January 4,
2024 press release, the Company expects the Acquisitions to
be accretive to adjusted EBITDA and add $10 to $12 million
in revenues in 2024. For the year ended December 31, 2022 per their audited financial
results, Movistar Riders generated operating income of CAD$237,641.28, with revenues of CAD$8,127,521.64 and expenses of CAD$7,889,880.36, in each case based on the 2022
annual exchange rate for the Canadian Dollar to European Euro of
1.37. As of December 31, 2022 per
their audited financial results, Movistar Riders had assets of
$4,180,252.13 and total liabilities
of $2,672,216.92, using the same
exchange rate mentioned above.
The assets that OverActive is acquiring from KOI consist
principally of the esports related assets, agreements, licenses,
intellectual property, and social media profiles. The upcoming
season will be the first season in which the KOI team will operate
the acquired assets and therefore these assets do not constitute an
existing business in respect of which any historical financial
information exists or can be prepared.
Movistar Riders Shares
Acquisition
The consideration payable by OverActive for the Movistar Riders
Shares Acquisition will consist of up to 30 million common shares
of the Company ("Common Shares"), of which 22.5 million
Common Shares will be issued at closing (the "Movistar Riders
Initial Consideration Shares") and up to 7.5 half million
Common Shares will be issued based on OAM's EMEA based business
achieving certain adjusted EBITDA targets during the period from
January 1, 2024 to December 31, 2028.
All of the Movistar Riders Initial Consideration Shares will be
subject to a 30-month lock up period during which the holders of
the locked-up Movistar Riders Initial Consideration Shares will not
be permitted to trade the shares without the Company's prior
consent, subject to certain customary and limited exceptions. A
portion of the Movistar Riders Initial Consideration Shares will
also be escrowed for three years following completion of the
Acquisitions to secure the indemnification obligations of the
vendors under the terms of the definitive purchase agreement in
respect of the Movistar Riders Shares Acquisition.
The Movistar Riders Shares Acquisition will be subject to a
number of conditions, including the negotiation and execution of a
definitive purchase agreement, the concurrent completion of the KOI
Assets Acquisition, the receipt of all necessary TSXV, board and
third-party approvals, and other customary conditions that will be
set out in the definitive purchase agreement.
The Movistar Riders Shares Acquisition is an arm's length
transaction and will not result in the creation of a new "Control
Person" as defined in the policies of the TSXV.
KOI Assets Acquisition
Details
As noted above, the assets to be acquired by the Company
pursuant to the KOI Assets Acquisition certain KOI esports assets
and brands and licenses, including social media and intellectual
property. In addition to acquiring these assets, OverActive will
enter into service agreements with top-tier global influencer
Ibai Llanos plus former professional
footballer and entrepreneur Gerard Piqué pursuant to which Messrs.
Llanos and Piqué will undertake a number of online and in person
activities to promote OverActive's esports teams and business (the
"Services Agreements").
The consideration payable by OverActive to KOI under the KOI
Assets Acquisition will consist of up to 30 million Common Shares,
of which 22.5 million Common Shares will be issued at closing (the
"KOI Initial Consideration Shares") and up to 7.5
half million Common Shares (the "KOI Earn Out Shares") will
be issued based on OverActive's EMEA based business achieving
certain adjusted EBITDA targets during the period from January 1, 2024 to December 31, 2028, provided that in no event will
KOI hold more than 19.9% of the outstanding Common Shares after
giving effect to its receipt of any of the KOI Initial
Consideration Shares or the KOI Earn Out Shares. OverActive will
pay Messrs, Llanos and Piqué a cash fee in exchange for their
services under the Services Agreements.
A portion of the KOI Initial Consideration Shares issued in
connection with the KOI acquisition will be subject to a five year
lock up period during which the holders of the locked-up KOI
Initial Consideration Shares will not be permitted to trade the
shares without the Company's prior consent, subject to certain
customary and limited exceptions. In addition, (i) 20% of the
locked-up KOI Initial Consideration Shares will be released from
lock-up on each anniversary of closing of the Acquisitions and (ii)
the KOI Initial Consideration Shares that remain subject to lock-up
may be cancelled for no consideration should there be a breach of
certain conditions. A portion of the KOI Initial Consideration
Shares will also be escrowed for three years following completion
of the Acquisitions to secure the indemnification obligations of
KOI under the terms of the definitive purchase agreement in respect
of the KOI Asset Acquisition.
The KOI Asset Acquisition will be subject to a number of
conditions, including the negotiation and execution of a definitive
purchase agreement, the concurrent completion of the Movistar
Riders Shares Acquisition, the receipt of all necessary TSXV, board
and third-party approvals (including the approval of Riot Games
Inc.) and other customary conditions that will be set out in the
definitive purchase agreement.
The KOI Asset Acquisition is an arm's length transaction and
will not result in the creation of a new "Control Person" as
defined in the policies of the TSXV.
Cautionary Note Regarding
Forward-Looking Information
This press release contains statements which constitute
"forward-looking statements" and "forward-looking information"
within the meaning of applicable securities laws (collectively,
"forward-looking statements"), including statements regarding the
plans, intentions, beliefs and current expectations of OverActive
with respect to the Acquisitions. Forward-looking statements are
often identified by the words "may", "would", "could", "should",
"will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" or similar expressions and includes information
regarding (a) the completion of the Acquisitions , (b) the benefits
expected to result from the Acquisitions by the Company, (c) the
future performance of Movistar Riders and KOI, including the
achievement of certain earn-out targets and their continued
expansion and growth, (d) the timing and anticipated receipt of
stock exchange approvals, (e) ability of the parties to enter into
definitive agreements with respect to the Acquisitions and to
satisfy the conditions to the closing of the Acquisitions , and (f)
other statements that are not historical facts.
Investors are cautioned that forward-looking statements are not
based on historical facts but instead OverActive management's
expectations, estimates or projections concerning future
results or events based on the opinions, assumptions and
estimates of management considered reasonable at the date the
statements are made. Although OverActive believes that the
expectations reflected in such forward-looking statements are
reasonable, such statements involve risks and uncertainties, and
undue reliance should not be placed thereon, as unknown or
unpredictable factors could have material adverse effects on future
results, performance or achievements of the OverActive. Among the
key factors that could cause actual results to differ materially
from those projected in the forward-looking statements are the
following: the risk that the parties may not enter into definitive
agreements with respect to the Acquisitions and that the
Acquisitions may not be completed on the terms described herein or
at all; the possibility that one or more of the closing conditions
to the Acquisitions may not be satisfied; risks associated with the
integration of the Acquisitions and the performance of Movistar
Riders and KOI following completion of the Acquisitions; changes in
general economic, business and political conditions, including
changes in the financial markets; changes in applicable laws and
regulations both locally and in foreign jurisdictions; compliance
with extensive government regulation; the risks and uncertainties
associated with foreign markets; and risk factors set out in
OverActive's annual information form for the year ended
December 31, 2021. These
forward-looking statements may be affected by risks and
uncertainties in the business of OverActive and general market
conditions, including COVID-19.
Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking statements
prove incorrect, actual results may vary materially from those
described herein as intended, planned, anticipated, believed,
estimated or expected. Although OverActive has attempted to
identify important risks, uncertainties and factors which
could cause actual results to differ materially, there may be
others that cause results not to be as anticipated, estimated or
intended and such changes could be material. OverActive does not
intend, and does not assume any obligation, to update the
forward-looking statements except as otherwise required by
applicable law.
ABOUT OVERACTIVE MEDIA
OverActive Media Corp. (TSXV: OAM) is headquartered in
Toronto, Ontario, with operations
in Madrid, Spain and Berlin, Germany. OverActive's mandate is to
build an integrated global company delivering sports, media and
entertainment products for today's generation of fans with a focus
on esports, videogames, content creation and distribution, culture,
and live and online events. OverActive owns team franchises in
professional esports leagues, including (i) the Call of Duty
League, operating as the Toronto Ultra, and (ii) the League of
Legends EMEA Championship, operating as the MAD Lions. OverActive
also leads OAM Live, an events arm that produces both live and
online events.
ABOUT KOI
KOI is the Barcelona
headquartered Esports club founded by Kosmos and Ibai Llanos in December
2021. The club currently has three teams: League of Legends,
which competes in the LVP Superliga; VALORANT, which, after a
season competing in Spain, now
competes in the VALORANT Champions Tour EMEA League; and FIFA.
ABOUT MOVISTAR RIDERS
Movistar Riders is one of the leading eSports clubs in
Spain. Its professional players
represent the Movistar Riders brand in multiple national and
international tournaments, competing in the most popular games such
as League of Legends, CS2, or VALORANT; in addition to having the
Atlético de Madrid - Movistar team
for FIFA.
The club is headquartered at the Movistar eSports Center, in
Matadero Madrid, a high-performance center where both players and
coaching staff have the most advanced means to develop their
activity at the highest level.
For more information, visit the club's official website:
https://www.movistarriders.gg/
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE OverActive Media