Intema Solutions (ITM.V) announced today that it has completed the first tranche of its non-brokered private placement of subscription receipts. The private placement is being undertaken by the Company in connection with its previously announced transaction, whereby Intema will acquire all of the issues and outstanding securities of Livestream Gaming Ltd.
To kick this off, let me start by giving a brief introduction to tranches and how they relate to a private placement. Put simply, tranches are a collection of securities that are separated and grouped based on various characteristics and then sold to investors. Furthermore, tranches can have different maturities, credit ratings, yields, and interest rates. With this in mind, Intema has completed the first tranche of its non-brokered private placement consisting of 11,420,000 subscription receipts at a price of $0.50 each for aggregate gross proceeds of $5,710,000.
The subscription receipts were issued pursuant to a subscription receipt agreement entered into between Intema and the subscription receipt agent. According to the terms of the agreement, each subscription receipt will be automatically exchanged into one unit of Intema, for no additional consideration or action on the part of the holder, upon the satisfaction of certain escrow released conditions in connection with the aforementioned transaction to acquire Livestream Gaming. These conditions include the satisfaction of all conditions precedent to the transaction, Intema not being in breach or default of any of its covenants or obligations under the subscription receipt agreement, and the escrow agent receiving a notice from Intema that all conditions precedent to the transaction have been satisfied or waived.
Getting to the Point
Each unit consist of one common share of Intema and one-half of one common share purchase warrant of the Company. With that being said, each warrant entitles the holder to purchase one common share at an exercise price of $0.90 for a period of 12 months from the date of issuance. Intema intends to use the net proceeds raised under the private placement entirely to fund the proposed transaction of Livestream Gaming. Investing mumbo jumbo aside, what does this mean for Intema? Livestream Gaming owns the LOOT.BET esports bookmaker platform, a world leader in esports betting. Keep in mind, the LOOT.BET betting handle was CAD$92.2 million for the year ended December 31, 2020. Moreover, Livestream Gaming recorded unaudited gross gaming revenue of CAD$4.8 million and a net profit of CAD$114,792 for the year ended December 31, 2020. With this in mind, Livestream Gaming is expected to becoming a substantial asset for Intema as the Company continues to expand its presence in the esports and gaming market.
In its latest press release, Intema also briefly mentioned that it had terminated its non-binding Letter of Intent (LOI) to acquire Advertiise Technologies Inc., which was originally announced on April 14, 2021. According to Intema, the Company had been carrying out due diligence in order to complete a valid and viable transaction. After analyzing the potential of this investment, Intema concluded that it was in the best interest of its shareholders to no longer pursue the acquisition of Advertiise. The Company’s proposed acquisition of Advertiise was on the backburner for quite a while, however, Intema’s proposed acquisition of Livestream Gaming could provide immediate benefits. After all, LOOT.BET boasts more than 450,000 registered users and has received exposure as a regular sponsor for professional tournaments and teams like Digital Chaos.
Intema Solutions is currently halted on the TSX Venture Exchange.
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