The Australian gaming company replied to Mission New Energy's claims of non-payment after terminating the proposed RTO.
SYDNEY, Jan. 23, 2019 /PRNewswire/ -- In a press release issued by Mission New Energy (MBT:ASX MNELF:OTC) last week, the renewable energy company claimed that sums were outstanding and owed to it by PlayUp Ltd.
The amount claimed concerns Pre-Trigger holding costs totalling $43,000. The terms between Mission New Energy (MBT) and PlayUp Ltd expressly provided that "Pre-Trigger holding costs are payable on Trigger". The Trigger event did not occur.
MBT originally sought to acquire PlayUp in a Reverse Take Over (RTO), with representation that it would trade PlayUp on the ASX and NASDAQ.
MBT represented to PlayUp Ltd that it had a fully compliant ASX listing, however during due diligence PlayUp Ltd discovered that MBT is suspended from trading pursuant to Listing Rule 17.6 for non-payment of annual listing fees. PlayUp also discovered that MBT was not contrary to its representation capable of trading on the NASDAQ. There were other material misrepresentations made by MBT during the due diligence process.
An RTO is generally used as a fast track to public listing and can often be problematic due to the history of the public shell company, and propensity for existing investors to seek an early liquidity event.
PlayUp CEO, Mr Daniel Simic, stated that MBT had failed to comply with basic requisitions made during the due diligence process, and or respond to inquiry made when concerns over the misrepresentations were raised, and because of that PlayUp Ltd determined any agreement with MBT.
"During our due diligence into MBT we identified several areas of concern that were not adequately addressed, and that were quite disparate to what MBT had represented to us. Ultimately, they failed to deliver on what they had initially represented," he said.
"We requested meetings with their executive team to table and discuss these concerns which were not responded to. It left PlayUp with no alternative but to terminate."
PlayUp sought independent advice on the proposed RTO, which revealed several areas of significant concern rendering the proposed transaction untenable. These concerns included the disclaimer on MBT's own press releases which said:
"THE ASX HAS EXPRESSED CONCERN TO MBT IN RELATION TO THE PROPOSED TRANSACTION AND THE SUITABILITY OF THE COMPANY TO BE LISTED ON THE ASX POST-COMPLETION OF THE TRANSACTION."
In addition to the representation issues, MBT failed to provide sufficient documentation to fulfil its obligation under the terms of the agreement to meet "MBT Success", and or generally exhibited a lack of want of progression towards completion. Its conduct demonstrated to PlayUp Ltd that a listing on the ASX and or the NASDAQ could not eventuate, and even if it did it would not meet the timing requirements of PlayUp Ltd for Q2 2019.
In terms of material non-disclosure, MBT failed to provide any accurate or reliable financial accounting concerning the position of its creditors, or those of its subsidiaries, which could have significant impact on its ability to trade, or its financial position, post completion of the proposed acquisition. Requisitions raised by PlayUp Ltd during the due diligence process concerning those matters were ignored.
The decision to terminate the RTO with MBT was based upon professional advice, and supported by investors. Consequently PlayUp Ltd is seeking alternate options to list on the NASDAQ and ASX over the course of 2019.
PlayUp Limited is a Universal Gaming Platform offering Daily Fantasy Sports, sports and race betting, fantasy stables, eSports, and casino table games. PlayUp makes up the team behind the PlayChip and operates PlayUp.com, ClassicBet, Draftstars, Betting.Club, TopBetta, and MadBookie. PlayUp Limited will deliver the world's first fully-integrated, blockchain enabled global fantasy sports, online sports betting and gaming ecosystem.
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