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YDX Innovation Corp (2)
Symbol YDX
Shares Issued 34,615,763
Close 2021-03-16 C$ 0.135
Recent Sedar Documents

YDX to combine with Moshun Media in RTO

2021-03-16 20:27 ET - News Release

Mr. Daniel Japiassu reports

YDX INNOVATION ANNOUNCES LETTER OF INTENT FOR REVERSE TAKEOVER WITH MOSHUN MEDIA DEVELOPMENT CORP.

YDX Innovation Corp. has entered a non-binding letter of intent dated March 16, 2021, with Moshun Media Development Corp., a non-reporting issuer in British Columbia, with respect to a proposed business combination transaction that will result in the reverse takeover of YDX Innovation by Moshun Media. As part of the RTO transaction, Moshun Media will acquire all of the issued and outstanding securities of YDX, and facilitate the listing of the resulting reporting issuer on the TSX Venture Exchange (TSX-V).

"Joining forces with the incredible team of Moshun Media is the opportunity we have been looking for to transform YDX into a powerful media, production, entertainment and experiences group. Moshun Media brings vast experience and connections to prominent names of the film and music industry, as well as access to substantial capital. The team at Moshun Media have an amazing work ethic, mind set and ability to take the company to another level. All of those factors make the RTO transaction something that both management and the board of YDX are fully supportive of and excited to complete," stated Daniel Japiassu, chief executive officer of YDX Innovation.

Mr. Japiassu further added: "While this news may be surprising for our shareholders, the company is confident that it won't take long to show the tremendous potential that Moshun Media brings to grow in the areas where YDX already does business as well as expand go-forward opportunities. We couldn't be more excited and will work diligently to conclude this RTO transaction as fast as possible."

About Moshun Media

Created by the experienced founders of Moshun Capital Partners, Moe Negin and Raymond Kisun, Moshun Media is a media acquisition company that integrates media experiences from e-sports and game development, film, live entertainment, and the evolving immersive entertainment industry.

Through key acquisitions, innovative structured financing, proprietary project investment and cradle-to-grave content management, Moshun Media will build an intelligent, asset-backed, film and entertainment media company. Its primary business is in the identification and acquisition or participation in film assets. The underlying premise stems from two key factors: first, service businesses provide a ready source for potential acquisitions due to succession; second, catalogues and libraries exist with individuals and corporate groups that may be acquired for rerelease.

Following the completion of the proposed RTO transaction, the secondary business activity is media services pro-offering recurring revenue-generating opportunities that showcase a strong blend of entertainment experiences for their audience. This includes straight-to-consumer virtual reality games and experiences, immersive exhibitions, and cross-media opportunities.

Mr. Kisun, co-founder of Moshun Media, stated: "YDX management represents experiences with recognized brands that mirror our mind set and collaborative approach, allowing Moshun Media to best leverage our international relationships going forward. There are no borders we cannot cross together!"

Proposed transaction summary

The LOI provides that the company and Moshun Media will negotiate and enter into a definitive agreement respecting the RTO transaction, according to which Moshun Media will acquire all of the issued and outstanding shares of YDX in exchange for the issuance of YDX shares on a one-for-one basis. It is expected that before the effect of any proposed concurrent financing, the holders of Moshun Media shares will hold approximately 67.53 per cent of the resulting issuer's shares, with the remaining 32.47 per cent held by current YDX shareholders.

According to the letter of intent, subject to the conditions set forth therein, YDX and Moshun Media will enter into a business combination by way of an amalgamation arrangement or another similar form of transaction, which will result in YDX and Moshun Media combining their corporate existence. The parties agree that the final structure of the business combination is subject to receipt of tax, corporate and securities law advice for both YDX and Moshun Media.

As per the LOI, it is anticipated that before or concurrently with the closing of the RTO transaction, the company will complete a private placement to raise gross proceeds agreed by the parties, and to satisfy the minimum listing requirements of the TSX Venture Exchange concerning working capital requirements and public distribution applicable to the resulting issuer.

Closing of the proposed RTO transaction will be subject to the following conditions:

  • Execution of a definitive agreement in respect of the proposed RTO transaction;
  • Completion of satisfactory due diligence by each of YDX and Moshun Media;
  • Receipt by Moshun Media of the annual audited financial statements of YDX as of its most recent fiscal year-end, as well as such other YDX's financial statements;
  • Receipt by YDX of all financial statements of Moshun Media, which are currently being audited;
  • Approval by the shareholders of Moshun Media and the company of the RTO transaction;
  • Financing or any interim financing shall be by way of a short-term loan between Moshun Media and YDX. Additional financing will be secured under the requisite TSX-V regulations and may require payment of a finder's fee to a third party;
  • The satisfaction of all initial listing requirements of the TSX-V and all related requirements under the policies of the TSX-V;
  • The resulting issuer shall complete a name change to a new holding name acceptable to YDX and applicable regulatory authorities;
  • Receipt of all required regulatory approvals, consents, permits, waivers, exemptions and orders;
  • No breach of the obligations under the LOI or the definitive agreement.

It is currently anticipated that the proposed RTO transaction will close on or before the end of Q2 2021.

A finder's fee is due and payable equivalent to $25,000 in cash and $275,000 in common shares, and will be paid to an arm's-length party for introducing the company and Moshun Media.

The composition of the remainder of the resulting issuer's board and senior leadership team will be determined at a later date and included in a subsequent news release.

Termination of letters of intent with each of Amuka Esports and Shattered Dreams Esports

Regarding the previous announcements of the letters of intent for the acquisition by YDX of each of Amuka Esports and Shattered Dreams Esports, the company would like to announce that in light of the proposed RTO transaction with Moshun Media, all parties have decided to terminate the respective documents.

"Business opportunities and partnerships will continue to develop between the companies, but we understand that the transaction with Moshun Media should be a priority at this moment. We continue to admire and work with the incredible team of Amuka Esports and SXD. We hope that this new chapter with Moshun Media will lead to mutual opportunities in e-sports, media and entertainment, and that our collaboration can bring mutual growth to all companies," stated Mr. Japiassu, CEO of YDX Innovation.

YDX Innovation debt conversion

The company announces, further to its news release of April 16, 2020, that the Sarwal Group Enterprise Inc. is converting the current outstanding principal of a revolving loan into common shares of the company, subject to TSX Venture Exchange approval.

Specifically, the Sarwal Group will be converting $18,510 of principal, at an average conversion rate of 16 cents per share, for the issuance of 116,439 common shares of the company.

These shares will be subject to a statutory hold period of four months plus one day from the date of issuance.

About YDX Innovation Corp.

YDX Innovation is a global leader in the commercialization of immersive new technologies that incorporate virtual reality, augmented reality, e-sports and gaming. Its core business seeks to monetize through licensing its IP, developing interactive exhibitions, and through e-sports tournaments and content.

Purple Mage Advisors (PMA) is a research and data analysis firm that specializes in player recruitment and development in the gaming industry. PMA helps e-sports and gaming companies with industry reports, player recruitment, player training, data analysis and relevant statistical reporting.

Arkave VR Arena is a proprietary gaming platform that brings location-based virtual reality to any location-based event or entertainment centre. Arkave features state-of-the-art free roam technology coupled with a vast library of both in-house and third party games.

YDreams Global has developed over 2,000 interactive and immersive experiences for some of the largest global brands, including Disney, NBA, Adidas, Cisco, Nokia, Nike, Mercedes-Benz, Coca-Cola, Santander, AB InBev, Qualcomm, Unilever, Fiat and the City of Rio de Janeiro.

Render is a professional video production studio specializing in crafting video content for YouTubers, streamers, teams and brands. Render is highly specialized in gaming content but also works with a wide variety of digital media.

We seek Safe Harbor.

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