MSM Corporation International Limited (ASX: MSM) today announced the allotment of 37million shares at $0.043 per share to The Riva Group and its major shareholders.
The allotment relates to the strategic placement announced in April this year under which Riva group pledged to subscribe for $1.59 million shares. Funds raised through this placement allows MSM Corporation for the continuation of the launch of Megastar India and the expansion of their relationship with Riva Group.
However, the company is currently negotiating a separate license agreement with the Riva Group to enhance Megastar Worldwide Tournament 2 (WWT2) by including Esports and Mobile Gaming talent competitions.
In an ASX announcement dated 26 November 2018, MSM Corporation revealed its plan to utilize funds raised under the placement for ongoing optimization of the marketing and operation of competitions on the Megastar platform. Along with establishing content distribution agreements, establishing the Megastar India and other markets joint venture with the Riva Group, repayment of interim loan funds; research and development of Megastar platform and general working capital.
Further, MSM and Riva intends to incorporate a new joint venture entity to operate talent competitions in India through Megastar platform. As per the reports, it is proposed that the joint venture must pay MSM an annual royalty of 5% of gross revenue, with a minimum annual guarantee of US$500,000 irrespective of actual revenue generated. The first royalty payment will be due to be paid to MSM by 30 June 2019.
MSM Chairman, Adam Wellisch stated “In collaboration with Riva, we intend to deliver shareholder value through the acquisition, development and operation of digital entertainment products that drive revenue through the Megastar Platform."
To further raise $1.752 million, the company has inked an agreement with Emerald Capital Australia Pty Limited to act as a lead Manager for the additional capital raising via initial placement of 39 million fully paid shares at $0.008 per share and the subsequent capital raising of a further $1,440,000, pending shareholder approval.
The company also announced the appointment of Mr. Chris Jones as Non-executive director of MSM’s Board. Further, Mr. Dion Sullivan has reportedly resigned from the role of Managing Director of MSM Corporation.
The stock of MSM Corporation remains suspended as at 26 November 2018. It last traded at a stock price of $0.009 and over the past one year the stock has seen a negative performance change of as much as 95.91%.
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