Golden Matrix Group Inc. (OTCMKTS:GMGID) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement
(a) On February 28, 2018, Golden Matrix Group, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Luxor Capital LLC (“Luxor”), an affiliate of the Company's Chief Executive Officer Anthony Goodman (as previously disclosed in our Form 10-Q filed on June 20, 2016), to which the Company agreed to purchase, and Luxor agreed to sell, certain Intellectual Property and Know-how to the Company (the "GM2 Asset").
Under the terms of the Asset Purchase Agreement, the Company will purchase the GM2 Asset from Luxor for an aggregate purchase price of: (i) Six Hundred Twenty-Five Million (625,000,000) shares of GMGI’s common stock, US $0.00001 par value, and valued at $0.0004 per share; and (ii) an earn out calculated at fifty percent (50%) of the revenues generated by the GM2 Asset during the 12-month period of 1st March, 2018 to 28th February 2019, payable by issuing to Luxor a convertible promissory note, or before April 30, 2019, in such amount (the “Earnout Note”), with the principal amount of the Earnout Note, and accrued and unpaid interest, convertible into shares of the Company's common stock at a rate equal to one hundred percent (50%) of the average closing price of the Company’s common stock for the seven (7) trading days prior to the holder delivering a notice of conversion to the Company. The Earnout Note shall bear interest at 4% per annum.
The GM2 Asset purchased by the Company to the Asset Purchase Agreement is expected to lead to new clients and incremental revenues by allowing the Company to offer unique IP to Social Gaming Clientele.
(b) On March 1 2018, the Company entered into a License Agreement (the “License Agreement”) with Articulate Pty Ltd. (“Articulate”), an affiliate of Mr. Goodman. to the License Agreement, Articulate will receive a license from the Company to use the GM2 Asset technology. Articulate will pay the Company a usage fee calculated as a certain percentage of the monthly content and software usage within the GM2 Asset system according to the following:
Software usage less than $100,000,000 = Usage fee of 0.25%;
Software usage between $100,000,001 and $200,500,000 = Usage fee of 0.20%; and
Software usage greater than $200,500,001 = Usage fee of 0.15%.
The foregoing description of the License Agreement and the Asset Purchase Agreement is not purported to be complete and is qualified in its entirety by reference to the complete text of the agreements filed as exhibits hereto.
Item 2.01 Completion of Acquisition or Disposition of Assets
The information contained in subparagraph (a) of “Item 1. Entry into a Material Definitive Agreement” is incorporated by reference.
The total consideration to be paid by the Company to Luxor for the GM2 Asset was determined through negotiations between the Company and Luxor. The Asset Purchase Agreement was approved by the Company’s independent member of the Board.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement by Registrant.
The information contained in Items 1.01 and 2.01 of this Form 8-K are incorporated in this Item 2.03 by reference with respect to the creation of direct financial obligations of the Company.
Item 3.02 Unregistered Sales of Equity Securities.
Since the filing of its quarterly report on Form 10-Q for the period ended October 31st 2017, the Company (the “Company”), has sold a total of 625,000,000 shares of its common stock, and issued the Earnout Note.
On February 28, 2018, the Company sold, 625,000,000 shares of the Company’s common stock, and issued the Earnout Note, to Luxor, an affiliate of the Company's Chief Executive Officer Anthony Goodman. The 625,000,000 shares of the Company’s common stock, and the Earnout Note were issued in consideration for the sale by Luxor to the Company of the GM2 Asset to the Asset Purchase Agreement (see Item 1.01 and Item 2.01 hereof).
to the terms of the Earnout Note, the holder will have the right to convert any portion of the unpaid principal amount and accrued and unpaid interest at a rate equal to one hundred percent (50%) of the average closing price of the Company’s common stock for the seven (7) trading days prior to the holder delivering a notice of conversion to the Company. The holders also have the right to assign any portion of the Earnout Note, or assign the shares to be issued upon any conversion of the Earnout Note, to other parties.
The Company will claim an exemption from the registration requirements of the Securities Act of 1933, as amended, for the issuance of the foregoing securities to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities.
Item 9.01 Financial Statements and Exhibits
Golden Matrix Group, Inc. Exhibit…To view the full exhibit click
About Golden Matrix Group Inc. (OTCMKTS:GMGID)
Golden Matrix Group, Inc. (GMGI), formerly Source Gold Corp., is engaged in providing social gaming technology. The Company’s business is focused on software technology. The Company has built a social gaming casino under the brand name, Lucky Panda 888. The Company owns social gaming intellectual property (IP) and builds white labeled social gaming platforms. The social gaming IP includes tools for acquisition, retention and monetization of users. The Company’s platform is unparalleled in both desktop and mobile applications. Its user management is optimized to accommodate both free and cost to play state of the art games. The Company has launched its iPhone application with multiple social casino games. GMGI’s social gaming software supports multiple languages, including English and Chinese. The Company has a global presence with offices in Las Vegas Nevada and Sydney Australia.