VANCOUVER, British Columbia, Jan. 20, 2020 — Askott Entertainment Inc. (“Askott” or the “Company“) and Molystar Resources Inc. (“Molystar“) are pleased to announce that they have entered into an amalgamation agreement (the “Amalgamation Agreement“) whereby Molystar will acquire all of the issued and outstanding common shares of Askott, in exchange for common shares of Molystar (the “Transaction”). As presently contemplated, it is expected that the Transaction will be completed by way of a “three cornered amalgamation” between Askott and a wholly owned subsidiary of Molystar (the “Molystar Subsidiary”) pursuant to the Business Corporations Act (British Columbia) or a similar business combination transaction. A condition to completion of the Transaction is the conditional approval of the TSX Venture Exchange (“TSXV”) and the Financing (as described below).
On the closing of the Transaction, Mr. Scott Burton will be appointed as the President and Chief Executive Officer of the combined company (the “Resulting Issuer“). In addition, Mr. Ian Winter, Mr. Mathew Lee and Mr. Jeremy Hutchings will be appointed as the Resulting Issuer’s Chief Operating Officer, Chief Financial Officer and Chief Technology Officer, respectively. The Board of Directors of the Resulting Issuer will include Mr. Scott Burton, Mr. James Keane, Mr. Chris Grove and Mr. Andreas Edelmeier.
Askott, Molystar and the Molystar Subsidiary entered into the Amalgamation Agreement pursuant to which Askott and the Molystar Subsidiary will amalgamate and ultimately Molystar will continue as the Resulting Issuer and change its name to “Askott Entertainment Inc.” Under the terms of the Amalgamation Agreement:
- the outstanding common shares of Askott (the “Askott Shares“) will ultimately be exchanged for common shares of the Resulting Issuer (the “Resulting Issuer Shares“) on the basis of one Resulting Issuer Share for each Askott Share;
- the outstanding common share purchase warrants of Askott (the “Askott Warrants“) will ultimately be exchanged for common share purchase warrants of the Resulting Issuer (the “Resulting Issuer Warrants“) on the basis of one Resulting Issuer Warrant for each Askott Warrant; and
- the outstanding options of Askott (the “Askott Options“) will ultimately be exchanged for options of the Resulting Issuer (the “Resulting Issuer Warrants“) on the basis of one Resulting Issuer Option for each Askott Option.
Prior to the completion of the Transaction, Molystar has agreed to (i) complete a private placement financing for working capital purposes to raise $400,000, (ii) consolidate its common shares on a 45,000,000:1 basis, such that Molystar will have approximately 1,600,000 common shares issued and outstanding immediately prior to completing the Transaction, and (iii) issue 300,000 post-consolidation common shares of Molystar as a finders’ fee. Completion of the Transaction will be subject to a number of closing conditions, including but not limited to, shareholder approval on the part of Askott, the Financing, regulatory approval and the satisfaction of initial listing requirements of the TSXV. Sponsorship for the Transaction may be required unless exempted or waived by the TSXV and a news release will be provided if a sponsor is retained.
Proposed Financing and Structure
As part of the Transaction, Askott will conduct a private placement offering (the “Financing”) of subscription receipts (the “Subscription Receipts”) at a price $0.85 per Subscription Receipt, for gross proceeds of a minimum of $4,000,000. Askott may pay finders’ fees to finders in connection with the Financing subject to compliance with applicable securities laws and the policies of the TSXV.
Each Subscription Receipt will ultimately entitle its holder to receive, without further payment of any further consideration, one unit of the Resulting Issuer (a “Unit”), with each Unit consisting of one Resulting Issuer Share and one Resulting Issuer Warrant, with each such warrant entitling the holder to acquire one additional Resulting Issuer Share at a price of $1.25 for a period of two years following the closing of the Transaction (the “Expiry Date”). If, prior to the Expiry Date, the closing price for the Resulting Issuer Shares is $1.75 or above on the TSXV on which the Resulting Issuer Shares trade, for a period of 10 consecutive trading days, the Resulting Issuer may, at its option, accelerate the Expiry Date by notifying the holders of the Resulting Issuer Warrants with the issuance of a press release announcing such acceleration (the “Acceleration Press Release”). In this case, the Expiry Date shall be deemed to be the 30th day following the date of issuance of the Acceleration Press Release.
On the closing date of the Financing, all of the proceeds (the “Escrowed Proceeds”) will be deposited in escrow and held by an escrow agent (the “Escrow Agent”) determined by Askott. The Escrowed Proceeds shall be released from escrow to the Resulting Issuer, upon completion of the Transaction. In the event that the Transaction is not completed on or before May 29, 2020 (the “Escrow Deadline”), the Escrowed Proceeds will be returned to the holders of the Subscription Receipts and the Subscription Receipts will be cancelled and of no further force or effect but for the right to be paid the Escrowed Proceeds on a pro rata basis. The net proceeds received by the Resulting Issuer from the Financing after the release from escrow will be used for marketing, operations, hiring, additional gaming licensing, and working capital and general corporate purposes of the Resulting Issuer.
The closing of the Financing is expected to occur on or about February 21, 2020.
As of the date of the Amalgamation Agreement, Askott has 32,874,916 common shares issued and outstanding, 1,269,590 stock options and 1,470,320 common share purchase warrants issued and outstanding.
New Directors and Officers
Scott Burton, President, Chief Executive Officer and Director
Mr. Burton co-founded Askott as its CEO in 2014. Mr. Burton is a designated accountant with over 15 years of senior operational experience. It was his passion for sports and the iGaming space that first led Mr. Burton to found an award-winning peer-to-peer betting exchange in 2013. In 2014 he steered the Company into the Esports space creating the first Esports daily fantasy site, esportspools.com.
Mr. Burton is considered an Esports thought leader and pioneer of the Esports betting space having presented on the topic at betting conferences globally. Before Askott, he co-founded Tedbets.com, an award-winning peer-to-peer wagering platform (2014 ‘Game to Watch’ – ICE).
Ian Winter, Chief Operating Officer
Mr. Winter began working with software companies in 1999, when he structured and managed a corporate technology portfolio as a risk & relationship manager at Scotia Capital. Beginning in 2003, he served in the role of COO at Yummy Interactive, a Vancouver-based provider of technology solutions for the secure digital delivery of PC games. In 2007, Mr. Winter was one of the architects and co-founders of MMX Software, the backbone of one of the world’s leading online poker networks.
In 2012, Mr. Winter assumed the role of CEO at Jetpack Interactive and transitioned the company from a concept start-up to a specialty game development studio, fulfilling engagements with AAA publishers, including Electronic Arts, Amazon Game Studios, and Sony Interactive Entertainment.
Mr. Winter joined Askott in 2019. He holds a Bachelor Of Arts (Economics) from Queen’s University and an MBA from the University Of British Columbia.
Mathew Lee, Chief Financial Officer
Mr. Lee is a Chartered Accountant with a Bachelor of Commerce Degree from the University of British Columbia and is a member of the Chartered Professional Accountants of British Columbia. Mr. Lee brings a broad depth of financial experience in both public and private company operations across various sectors, including mineral resources and financial services. Mr. Lee’s prior experience includes appointments as CFO for Metallic Minerals Corp. and Group Ten Metals Corp. Prior to that he worked as the CFO for Chemesis International Inc., CFO for Mirasol Resources Ltd., controller for AP Capital, Manager of Operations for Raymond James Ltd. and Accounting Manager for Smythe LLP.
Jeremy Hutchings, Chief Technology Officer
Mr. Hutchings, who co-founded Askott as its CTO in 2014, is a proven solutions architect and expert of transactional, real-time and distributed systems. He combines over 30 years of development experience and constant process improvement, with over a decade of senior management and leadership in multiple business areas, including gaming. Having fostered multiple startups through M&A, and excelling with companies such as Lockheed Martin, Cable & Wireless and Metrolyrics CBS Interactive, he understands the paths taken by both successful startups and multinational corporations.
Mr. Hutchings is passionate about people and learning, taking IT capacity, social, organizational dynamics, market forces, stakeholder, and corporate strategy into consideration in strategic decision-making. As a lifelong learner, he has just chosen his second MSc (in Cyber Security) and continues to ensure organizational learning throughout Askott.
James Keane, Director
Mr. Keane is a pioneer in the online gaming space as a key member of the founding ParadisePoker.com team in 2001. Mr. Keane helped grow Paradise into one of the top 3 poker sites in the world and oversaw its acquisition by Sportingbet in 2005. Mr. Keane remained with Sportingbet holding Manager Director roles for ParadisePoker.com and subsequently Emerging Markets. After the sale of Sportingbet to William Hill and GVC, Mr. Keane consulted in both the online and brick and mortar casino world on growth, M&A, and business execution strategies. Mr. Keane is currently the CEO of a social casino games developer, taking the role after structuring and executing the sale of a social casino game developer to KSG in 2016
Chris Grove, Director
Chris Grove is a partner at Eilers & Krejcik Gaming where he heads the firm’s sports betting practice. His research and insights are regularly cited by policymakers, media, publicly-traded companies, and financial analysts. Grove is also a founder and managing partner at SGIF, a VC fund investing in startups focused on the legal U.S. sports betting opportunity.
Andreas Edelmeier, Director
Mr. Edelmeier has 25 years experience working in the finance and capital markets industries. He is currently President of Braemar West Capital which invests in private and public companies. He was previously a Partner at Strata Partners in London where he focused on private equity investments and M&A. Prior thereto he was at Credit Suisse First Boston in London where headed the European Technology Private Placements group, and was a Vice President at JP Morgan Chase (Chase Manhattan) where he worked in private equity and acquisition finance roles. He started his career with Deloitte & Touche Management Consultants. He has an MBA degree from London Business School, a BBA from Simon Fraser University and is a CPA, CMA.
Askott Entertainment Inc.
Askott Entertainment is a Vancouver based software development company that has been building award-winning online betting and daily fantasy software since 2013. Askott recently launched its Chameleon Gaming Platform. In addition to powering Askott’s own direct to consumer sites, Chameleon provides licensed operators a complete turnkey esports betting, daily fantasy, and casino-style games platform. There are currently three sites operating on the platform with additional partners going live in 2020.
Molystar Resources Inc.
Molystar’s principal business activities have historically been the exploration of mineral resource properties. All of Molystar’s properties were sold or abandoned during 2010 and Molystar currently has no business operations nor generates any operating income or positive cash flow.
Investors are cautioned that, except as disclosed in press releases issued by Askott or Molystar, information with respect to the Transaction may not be accurate or complete and should not be relied upon.
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to the transactions contemplated under the Amalgamation Agreement, the Transaction, the Financing, the requisite regulatory and shareholder approvals in respect thereof, the completion of the Financing and the use of proceeds thereof, and proposed future transactions the Company may undertake and their expected timing. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Askott and Molystar to control or predict, that may cause Askott and Molystar’s actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: the risk that the Transaction will not be approved by the TSX Venture Exchange and that the Financing will not be completed; the Company may not obtain additional partners, that the actual use of proceeds may differ from those currently stated; risks and uncertainties related to the Transaction not being completed in the event that the conditions precedent thereto are not satisfied; the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, currency fluctuations; regulatory restrictions, liability, competition, loss of key employees and other related risks and uncertainties. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements.
Contact: Scott Burton, Chief Executive Officer Email: [email protected]