Acquisition
TRANS-GLOBAL RESOURCES NL 1999-07-20 ASX-SIGNAL-G
HOMEX - Perth
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ACQUISITION OF 100% OF INTERMEDIA INTERACTIVE SOFTWARE INC. (USA)
ACQUISITION OF REMAINING 70% OF INTERNET CASINO REVENUE
PLACEMENT AND CONVERTIBLE NOTE ISSUE TO US INVESTORS
Trans-Global Resources N.L. (TGL) is pleased to announce that the
recent strategic visit to North America has culminated in a number of
significant new initiatives for the Company. The Directors envisioned
that once brokers and investors in North America became informed of
the Company's existing activities and its vision for the future that
this would culminate in substantial US participation in the Company's
securities. The Directors believe that the matters outlined below, as
well as underpinning the financial stability for the future of the
Company, presents a clearly integrated series of initiatives for the
continued development of the Company's revenue generating interactive
home entertainment businesses.
The Directors anticipate that substantial revenues will be generated
from a percentage share of regulated casinos' net revenue from
Internet Casino Gambling, sponsorship, pay to play, advertising, game
development, access and marketing fees, revenue stream from digital
television and existing revenue streams resulting from the
acquisition of InterMedia.
(A) Acquisition of InterMedia Interactive Software Inc.
Trans-Global is pleased to announce that it has entered into a Letter
of Intent ("LOI") with the principals of InterMedia Interactive
Software Inc. ("InterMedia") a profitable Philadelphia USA based,
Internet, multimedia design and consulting agency.
Pursuant to the LOI and subject to TGL shareholder approval TGL will
acquire 100% of the issued capital of InterMedia for USD 3 million
(AUD 4.5 million) on the basis of:
a) USD 1.75 million cash; and
b) USD 1.25 million in shares - comprising 9,000,000 TGL shares.
Founded in 1991, InterMedia designs and develops advanced Internet
and multimedia systems for a diverse client base. InterMedia's
services include: (i) Internet strategy development; (ii) creative,
design, and technology development; (iii) content development; (iv)
multimedia and Internet development for the consumer markets; and (v)
application and client/server development. By combining its
professionals' collective talents and experience, InterMedia have
demonstrated a clear understanding of the Internet and multimedia
landscape. Over the past 8 years, InterMedia has developed the
disciplines and methodology required to successfully manage product
development for a diverse client-base, ensuring that each project is
completed with exceptional quality, on-time, and within budget.
The multi-disciplinary team of software professionals at InterMedia
consists of information technology strategy consultants, user
interface designers, software engineers, media designers, project
managers and quality assurance engineers. The combined skill set of
its professionals provides InterMedia with mastery of the critical
skills required to implement projects from concept to completion.
The InterMedia acquisition adds the following to TGL:
* The US presence required to successfully execute its interactive
home entertainment Strategy.
* Highly experienced team with skills in Internet strategy
development, creative concept development, and consumer software
development.
* An on-going revenue stream.
The Directors of TGL strongly believe that this acquisition will
complement the technology developed by the GET Group. With
InterMedia's team coordinating and managing the development of TGL's
intellectual assets, the Directors believe that TGL will be able to
achieve global dominance in the rewards-based home entertainment
industry.
Further details regarding the activities of InterMedia are attached.
(B) Acquisition of Remaining 70% of Internet Casino System Revenues
The Company has reached agreement with the GET Group to acquire the
remaining 70% interest in the net revenue stream from Internet Casino
Gambling giving TGL an exclusive licence with respect to 100% of the
net revenue from this activity. Although GET Group will retain the
intellectual property rights to this system, TGL will now be entitled
to receive all income generated from this activity.
The consideration for the acquisition, which will be subject to
independent valuation and shareholder approval, will be AUD 8.0
million comprised of:
1) AUD 2 million cash; and
2) 30 million new shares in the capital of TGL
The proposed acquisition further strengthens the relationship between
TGL and the GET Group, which should result in considerable immediate
revenue flows as the GET Group's Internet Casino Gambling software
nears the successful completion of the validation process.
(C) Placement and Convertible Note Issue
The Company has arranged a series of fundraisings to clients of
Adolph Komorsky Investments Inc. ("AKI"), a New York based Brokerage
House, totalling USD10.74 million (AUD 16.08 million) on the
following basis:
(1) Initial subscription for up to 16 million new shares in the
capital of TGL at a subscription price of AUD 20 cents per share
raising AUD 3.2 million (USD 2.14 million). These funds will be
predominantly applied towards the acquisition of 100% of the Issued
capital of InterMedia Interactive Software Inc. and for working
capital purposes. This allotment is being undertaken in accordance
with Chapter 7 of the Australian Stock Exchange Listing Rules.
(2) AKI have also agreed, subject to the approval of TGL
shareholders, to subscribe for a total of USD 8.6 million (AUD 12.87
million) of 8% convertible redeemable notes:
2.1 First Tranche
USD 4.3 million (First Tranche) of the 8% Convertible Redeemable
Notes are convertible within 12 months of the date of allotment
at an exercise price of USD 0.50 (or the AUD equivalent) and must
automatically convert when TGL shares trade above USD 0.60 for 30
days trailing average.
2.2 Second Tranche
USD 4.3 million (Second Tranche) of the 8% Convertible Redeemable
Notes are convertable with 18 months of the date of allotment at
an exercise price of USD 0.80 (or the AUD equivalent) and must
automatically convert when TGL shares trade above USD 1.00 for 30
days trailing average.
Full details of the terms and conditions of the Convertible Notes
will be provided to shareholders for their consideration.
NEXT STEPS
Going forward, the Directors will further outline plans for the
reward-based entertainment market and also put in place a world class
management and marketing team capable of building a premium global
consumer brand. Additional capital requirements, which are to be
supported by the proposed Convertible Note Issue outlined above, will
be rapidly identified for use in brand and technology development.
SUMMARY
The initiatives outlined above provide TGL with the opportunity to
establish the strong presence in the US needed to successfully
achieve a dominant position in the global home entertainment
industry. These initiatives when combined with the recent
announcement of a joint venture with the Ed Fishman Group with
respect to the Online Game Show Channel will establish TGL as a
leading participant in the interactive home entertainment industry.
On finalisation of formal documentation with respect to the above
matters. Mr Ed Fishman and a representative of InterMedia will join
the board of TGL.
It is anticipated that the change of name to Trans-Global Interactive
Limited will become effective on or about 22 July following the
expiration of the prescribed Australian government gazetting period.
Further details in respect to the above announcements will be made
public in the Notice Of Meeting and accompanying Information
Memorandum, which will be distributed to shareholders in due course.
The Directors believe the announcements contained above will provide
significant business opportunities for the Company and its
shareholders.
B J Frost
EXECUTIVE CHAIRMAN
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