NextPlay Technologies, Inc. a digital business ecosystem for digital advertisers, consumers, video gamers and travelers, today announced it has agreed to the sale of the company’s travel business, NextTrip Group, LLC, and its 51% ownership of Reinhart Digital TV (the 100% owner of Zappware) to Vancouver-based TGS Esports Inc. a leading esports tournament solutions provider. As consideration, NextPlay will receive nonvoting convertible preferred shares of TGS in the amount of US $12.2m. The TGS convertible preferred shares are redeemable, can be sold subject to certain transfer restrictions, or may be converted to TGS common shares and distributed to NextPlay shareholders of record once certain conditions are met. Closing of the transaction remains subject to various conditions, including (without limitation) regulatory approvals and approval of TGS’ shareholders, and is expected to occur in the second half of 2022.
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The transaction is expected to streamline NextPlay’s business operations and management, improve capital allocation, and is expected to unlock shareholder value by offering investors a pure-play investment in the Digital Media and Financial Technology sectors.
Upon closing of the proposed transaction, NextTrip and the company’s ownership interests in Reinhart/Zappware will be sold to TGS in exchange for TGS issuing (i) the newly created nonvoting preferred shares to NextPlay, and (ii) TGS common shares to William Kerby, co-CEO and a director of NextPlay, and Donald Monaco, a director of the Company, (subject to an escrow on a portion of such shares to further incentivize TGS stock performance) both of whom hold certain equity interests in NextTrip. The preferred shares include certain triggering mechanisms for conversion into common shares of TGS and distribution of such common shares to NextPlay shareholders. Concurrently with a determination to convert the preferred shares into common shares, NextPlay will set a shareholder record date for a special dividend to distribute all of the common shares of TGS held by NextPlay to NextPlay’s shareholders, on a pro-rata basis.
As a condition of closing the transaction, TGS is required to hold a shareholder meeting to approve the transaction, designation of the preferred shares and the terms thereof, a 40:1 share consolidation (reverse stock split) and related matters. Closing of the transaction remains subject to other customary conditions and approvals as well. No assurances can be provided that the closing conditions will be satisfied, or that the transaction will be consummated on the anticipated timeline, or at all.
Additionally, upon consummation of the transaction, Messrs. Monaco and Kerby will be departing from NextPlay, and will move to TGS, where they will serve as Chairman and CEO, respectively.
“We believe this transaction provides NextPlay shareholders a win-win opportunity through the restructuring and refocus of NextPlay Technologies and through the ownership and eventual distribution of TGS Esports shares,” commented Todd Bonner, NextPlay Technologies Chairman. “NextPlay Technologies will continue its focus on disrupting the online video game advertising space while completing its build out of a comprehensive suite of financial and financial technology solutions offered through its NextFinTech and NextBank divisions.”
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“By streamlining our operations and intensifying our focus on our core businesses we expect to accelerate NextPlay’s business adoption and cash flow generation,” remarked NextPlay CEO Nithinan “Jess” Boonyawattanapisut. Ms. Boonyawattanapisut will continue in her role as CEO of NextPlay while Mr. William Kerby will step down from his positions at NextPlay and will assume the Chief Executive Officer role at the new TGS Esports at closing.
Meanwhile, the combination of NextTrip and Reinhart with TGS Esports creates a company offering comprehensive online content distribution, in-person events organization with global reach and scale, and complimentary travel booking solutions. Upon closing, the newly combined TGS, Inc. company is expected to begin trading under the TGS brand name and ticker symbol (TGS: TSXV) (TGSEF: OTC) and plans to apply to uplist to a national exchange in the US (e.g., NASDAQ or NYSE) once certain conditions, including closing, are met. In the event of conversion, it is expected that free-trading TGS common shares will be distributed to NXTP shareholders of record.
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