MSM Enters into Agreement to Merge with RTE

HIGHLIGHTS

• Binding Implementation Agreement executed with Riva Technology and Entertainment Limited (RTE) and major shareholders of RTE including the founders of RTE
• Merged entity to create a global digital media entertainment, ESports and gaming business, including having interests in Firefly Games, Galaxy Racer and investments in other complimentary global gaming businesses
• Accelerates development pathway for the Megastar Platform Version 2.0 following recent US patent examinations
• Paul Roy to be appointed as Managing Director and CEO of merged entity

MSM Corporation International Limited (“MSM” or the “Company”) is pleased to advise it has entered into a binding Implementation Agreement with Riva Technology and Entertainment Limited (“RTE”) and major shareholders of RTE, including the founders of RTE, to offer to acquire
all the issued share capital of RTE (that MSM does not already own) and undertake a merger to create a global digital media entertainment, ESports and gaming business.

Since establishing a strategic partnership with The Riva Group in 2017, MSM has developed a multi-faceted relationship with RTE, including an existing 10% equity interest in RTE as well as secured, first ranking interest free loan notes in RTE totaling US$0.95M.

RTE

Founded in 2002, with a global presence stretching from the USA to East Asia, The Riva Group has seen the opportunity of participating in the gaming industry which has evolved drastically since 1970s as technology has moved consumers towards a more connected and advanced gaming world.

The Riva Group’s wholly owned subsidiary, RTE is well positioned to take advantage of the significant growth experienced across the global gaming industry as Gen C’s behaviour has shaped the creator economy encompassing content creation, distribution and consumption.

Within a short period of time, RTE has been able to capture gaming and fan engagement’s industry key functions, from game concepts, development, monetisation, ESports, distribution and analytics, through the investment in several complementary Esports and gaming businesses.

RTE Business Lines are as follows;

• IP Sublicensing
• Distribution Rights
• Esports and Content Platform
• Complementary Companies in Gaming/ESports

Following completion of the development of the Company’s Megastar Platform Version 2.0, RTE will provide an accelerated development pathway via these various business lines to create a platform that is fully centric around fan engagement and content monetisation. RTE is continually assessing investments in other complementary entertainment, technology and gaming ventures to deliver an ecosystem of companies that all cater to the creator economy.

Upon completion of the transaction, MSM will welcome Paul Roy as Managing Director and CEO of the merged entity. For further information on RTE, please refer www.RTE.com.au

terms of merger

Based on the binding Implementation Agreement between the Company, RTE and the major shareholders of RTE, the Company will offer to acquire the 90% of the issued shares of RTE which it currently does not own from the shareholders of RTE and offer to acquire all convertible notes, loan notes and options on issue in RTE from the holders of such instruments and
securities. The consideration for the merger will be satisfied by the offer by the Company of:

1. 1,693,880,745 fully paid ordinary shares (“MSM Shares”) to the parties who are shareholders of RTE at completion;
2. 107,785,723 options to acquire MSM Shares exercisable at $0.047 each on or before 31 December 2024 (“MSM Options”) to the holders of options in RTE; and
3. 440,304,356 MSM Shares and 110,076,089 MSM Options to the holders of convertible notes and loan notes in RTE.

Completion of the merger is subject to various conditions precedent, including, but not limited to:

1. the Company receiving firm commitments to raise US$20,740,000 (A$29.2M) via the issue of 617,261,905 MSM Shares at an issue price of US$0.0336 per MSM Share (equivalent to A$0.047 per share) together with one (1) free attaching MSM Option for every four (4) MSM Shares subscribed for and issued, or such lesser amount as the parties agree in writing (“Capital Raise”);
2. all holders of shares, options, convertible notes and loan notes in RTE accepting the offers described above; and
3. the parties receiving all necessary regulatory consents, waivers or approvals required.

The funds raised from the Capital Raise are primarily to be applied to meet RTE’s contracted obligations to participate in funding rounds in several investee gaming and Esports companies that have reached agreed upon milestones, to increase RTE’s equity position in these businesses.

 

Note: The figures in the table above are indicative only and subject to change.

An investor presentation has been provided with this media release.

The Company has also agreed to issue the following securities:

1. 37,035,714 MSM Shares and 75,000,000 MSM Options as an advisory/management fee for the Capital Raise;
2. 26,482,979 MSM Shares to advisers of RTE in satisfaction of fees payable by RTE in respect of a previous capital raise;
3. 26,250,000 MSM Options and 26,250,000 options to acquire MSM Shares exercisable at $0.05 on or before 3 years from the date of issue to the advisory board of MSM; and
4. 12,500,000 MSM Options to the board of directors of MSM, subject to compliance with the Corporations Act.

The Company is also considering pursuing a listing on another securities exchange after the RTE merger transaction and capital raising are completed. Shareholders should be aware that this is currently an expression of intention only. Any such listing is subject to a number of factors which are outside of the control of the Company and there is no certainty that another listing may occur.

“We welcome Paul to the Company which is in a strong position to deliver on our vision to create a global digital media entertainment, ESports and gaming business.

“On behalf of the Board, we thank Adam as a founding director of the Company for his significant contribution to the development of the Megastar platform. We look forward to accelerating the development pathway for Megastar Version 2.0.”

“We are pleased that the merger has been completed and thank all those involved in the process. This is just the beginning of an exciting journey ahead. I am looking forward to our upcoming plans in the pipeline and growing MSM into a true TMT company, as we push boundaries in the world of gaming, content and Esports and define the industry for the next generation.”

FORWARD-LOOKING STATEMENTS

This announcement has been prepared by the Company. This document contains background information about the Company and its associated entities current at the date of this announcement. This is in summary form and does not purport to be all inclusive or complete. Recipients should
conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this announcement.
This announcement is for information purposes only. Neither this document nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.
This announcement may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction.
This document does not constitute investment advice and has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs and the opinions and recommendations in this representation are not intended to represent
recommendations of particular investments to particular persons.
Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.
No responsibility for any errors or omissions from this document arising out of negligence or otherwise is accepted. This document does include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of the Company. Actual values, results, outcomes or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and ASX Listing Rules, the Company does not undertake any obligation to update or revise any information.