Toronto-based Imperus Technologies Corp (TSX-V: LAB) has entered into an agreement to secure US$28 million from Third Eye Capital Corp. The funding, which comes in the form of a senior secured term loan facility, will help fund the company’s acquisition of Akamon Entertainment Millennium SL, a developer and publisher of social games. The deal was announced in September. Third Eye Capital is a Canadian provider of private secured loans for under-appreciated mid-market companies.
Imperus Announces US$28 Million Financing for the Akamon Acquisition
TORONTO, ONTARIO–(Marketwired – Nov. 4, 2015) – Imperus Technologies Corp. (“Imperus” or the “Company”) (TSX VENTURE:LAB)(FRANKFURT:ISX)(FRANKFURT WKN:A12B58) is pleased to announce that it has executed a commitment letter (the “Commitment Letter”) with Third Eye Capital Corporation providing for, subject to the completion of definitive documentation and certain conditions, a senior secured term loan facility in the principal amount of US$28 million (the “Acquisition Facility”). The net proceeds from the Acquisition Facility will be used by the Company to fund the purchase price of the previously announced acquisition (the “Acquisition”) of all of the issued and outstanding shares of the social gaming company Akamon Entertainment Millennium, S.L. (“Akamon”). For further details on the Acquisition, see the Company’s press releases dated September 8, 2015 and September 28, 2015.
Imperus has entered into the Commitment Letter with Third Eye Capital Corporation, as agent on behalf of certain lenders (collectively, “TEC”), for the Acquisition Facility to fund the Acquisition. The Acquisition Facility will be effected by way of an amendment to the existing Credit Agreement dated January 30, 2015, as amended (the “Credit Agreement”), between the Company, as borrower, certain subsidiaries of the Company, as credit parties, and TEC. The Acquisition Facility will be coterminous with the existing senior secured term loan facility in the principal amount of US$39 million under the Credit Agreement (together with the Acquisition Facility, the “Imperus Facilities”), maturing on January 30, 2018, subject to acceleration by TEC on certain events of default and the Company’s right to repay the Imperus Facilities under certain circumstances. The Imperus Facilities bear interest at the rate of 12% per annum, calculated and payable monthly in arrears. A deposit of US$3,000,000 on account of prepaid interest will be prepaid by the Company from the proceeds of the Acquisition Facility and will be refunded to the Company on a pro-rata basis in the event that all or a portion of the Acquisition Facility is repaid within 12 months following the closing of the Acquisition.
The Credit Agreement will be amended to require the Company to repay US$2,000,000 per quarter of the principal amount outstanding under the Imperus Facilities, commencing April 1, 2016. The Company will also be required to make principal repayments under the Imperus Facilities in certain other circumstances prior to maturity.
Without modifying the existing fees and expenses payable by the Company under the Credit Agreement, the Acquisition Facility will be subject to a one-time placement fee of US$560,000, a one-time commitment fee of US$420,000 and a one-time closing fee of US$420,000. If TEC has not received principal repayments of at least US$14,000,000 from Imperus on or before the 90th day following the closing date for the Acquisition, the Company will be subject to a one-time carrying fee of US$1,000,000 payable to TEC.
In addition, subject to TSX Venture Exchange (“TSXV”) approval and applicable securities laws, the Company will issue to TEC 15 million non-transferrable common share purchase warrants exercisable at the market price (as determined in accordance with the policies of the TSXV) in connection with the announcement of the Acquisition Facility (the “Market Price”), which will expire on January 30, 2018, being the same expiry date as for the existing 20 million non-transferrable common share purchase warrants (the “Existing Warrants”) issued by the Company to TEC in connection with the Credit Agreement, and the Company will amend the exercise price of the Existing Warrants such that it equals the Market Price.
The Acquisition Facility will be secured by, among other things (i) a first priority security interest in all of the present and future real and personal property of Imperus and its subsidiaries (including Akamon upon completion of the Acquisition), (ii) blocked account agreements covering the bank accounts of Imperus and its subsidiaries (including Akamon upon completion of the Acquisition), (iii) guarantees provided by the subsidiaries of Imperus (including Akamon upon completion of the Acquisition), (iv) the assignment of certain third party licensing, revenue sharing and partnership agreements of Akamon to the extent commercially practical, and (v) a pledge of the shares of the subsidiaries of Imperus (including Akamon upon completion of the Acquisition).
Imperus and TEC will amend the Credit Agreement and enter into and amend, as applicable, related security and financing documents, instruments and agreements, all in form and substance satisfactory to TEC (the “Loan Documentation”). The Loan Documentation will contain usual and customary terms and covenants and certain of the existing financial, operational and other covenants within the Credit Agreement will be amended. The Acquisition Facility is subject to certain conditions including but not limited to completion of due diligence by TEC, negotiation and completion of Loan Documentation, concurrent closing of the Acquisition, payment by the Company of the fees and expenses of TEC, and customary regulatory approvals, including the approval of the TSXV.
In connection with the Commitment Letter the Company has received a waiver from TEC related to certain defaults under the Credit Agreement.
Imperus Technologies Corp., the parent company of Diwip, is a developer of social and mobile gaming for PC, Mac, iOS and Android platforms. Diwip designs, develops and distributes its top ranked social casino-themed games within online social networks (such as Facebook) and mobile platforms (such as Android or iPhone). All of Diwip’s games are free to play and generate revenue primarily through the in-game sale of virtual coins.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution Regarding Forward-Looking Information:
Certain statements in this press release may constitute “forward looking statements” which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this press release, such statements may use such words as “may”, “will”, “expect”, “believe”, “plan” and other similar terminology. These statements include, but are not limited to, the negotiations related to and closing of the Acquisition Facility and the closing of the Acquisition. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. The forward looking statements involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, the ability of the Company to finance the Acquisition including pursuant to the proposed terms and conditions of the Acquisition Facility, regulatory requirements, general economic, market or business conditions and future developments in the sectors of the economy in which the business of Imperus or Akamon operate. The foregoing list of factors is not exhaustive. Please see the Company’s short form prospectus dated March 27, 2015, the Company’s Annual Information Form dated December 6, 2014 and other documents available on www.sedar.com, for a more detailed description of the risk factors. The Company undertakes no obligation to update publicly or revise any forward looking statements, whether a result of new information, future results or otherwise, except as required by law.
KIN Communications Inc.
Mr. Arlen Hansen
Imperus Technologies Corp.
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