KELOWNA, BC – June 6, 2018 – ProSmart Enterprises Inc. (TSXV:PROS) (“ProSmart” or the “Company”), the owner of SportgoTM, a global online network connecting sports fans, teams and brands, announces it has closed its previously announced acquisition of the issued and outstanding shares of DL Hockey Consulting (Shenzhen) Limited and DL Hockey Consulting Limited (combined, “DL Hockey” and the “Acquisitions”), pursuant to the agreement (the “Agreement”) signed on February 27, 2018 and as announced on March 5, 2018. Furthermore, the Company announces that it continues to proceed with the brokered private placement (the “Offering”) led by Mackie Research Capital Corporation (“Mackie”).
With DL Hockey, ProSmart now owns an established brand and has instant access to the Chinese hockey market, including an on-the-ground physical presence and national network of sports development relationships. This follows the announcement of the partnership with Dragon Group (see news release dated March 27, 2018) – a leading Chinese sports marketing company that is developing a WeChat app, similar in functionality to the SportgoTM online network and critical to building an online presence in China. The app, in conjunction with the DL Hockey sports camps and clubs, has the potential to greatly amplify the growth of the SportgoTM online network in China.
SportgoTM, which provides unprecedented access to the $1.3 trillion1 sports industry, works with over 1,500 governing bodies in more than 100 countries.
- China is building 650 skating rinks in preparation for the 2022 Olympic Winter Games.
- China is looking to build 70,000 soccer pitches and have 50 million adult and child soccer players by 2020.
- Chinese sports industry estimated to more than triple its US$223B (2016) value by 2025 (Bank of China report, 2017).
- In a national strategy spearheaded by the General Administration of Sport, China plans to build 100 towns dedicated as centers of sporting excellence for various disciplines in coming years.
- According to market consultancy, Analysis, the total revenue generated from sponsorship, broadcasting and fan spending on winter sports events is expected to reach 160 billion yuan (US$26 billion) by 2025.
As consideration for the Acquisitions, ProSmart has issued an aggregate of 170,620 common shares (the “Payment Shares”) with a deemed value of US$86,250. The Payment Shares are subject to a hold period of four months and one day expiring on October 1, 2018 and will also be subject to a voluntary escrow agreement to be released as to eight and one-third percent (8 1/3%) of the aggregate amount of the Payment Shares on the date that is every three months from the closing date for a period of 36 months. This is an arms-length transaction to the Company and no finder’s fees were paid in connection with the Acquisitions.
Doug Lynch, the founder of DL Hockey, enjoyed an 11-year professional career where he played in the NHL, AHL and other European leagues. Since then he has founded hockey schools in four countries and built strong relationships in the Chinese market. As part of the Acquisitions, Doug has signed a 5-year contract with ProSmart, assuming the role of VP Business Development in China.
Alan Schuler, Co-founder and CEO, states, “We’re pleased to have closed the DL Hockey acquisition in such a short space of time and have already begun work with our new partner, DGA, on integrating our online network with a specialized WeChat app. With China’s Winter Olympics in 2022, the timing for ProSmart and SportgoTM really couldn’t be better and we look forward to further accelerating our expansion into China.”
Update on Brokered Private Placement
Further to ProSmart’s news release of April 20, 2018, the Company continues to proceed with the brokered private placement (the “Offering”) led by Mackie Research Capital Corporation (“Mackie”) of up to 5,000,000 units of the Company (the “Units”) at $0.35 per Unit for gross proceeds of up to $1,750,000.
Closing of the Offering is subject to certain conditions, including, but not limited to, completion of satisfactory due diligence and receipt of all necessary regulatory approvals, including the acceptance of the TSX Venture Exchange.
On behalf of ProSmart Enterprises Inc.
Co-Founder & Chief Executive Officer
About ProSmart Enterprises Inc.
ProSmart Enterprises Inc. (TSX-V:PROS) is the parent company of SportgoTM, a global online network connecting sports fans, teams and brands and is an emerging leader in sports content marketing through online tools and mobile apps. SportgoTM works with over 1,500 governing bodies in more than 100 countries and provides unprecedented access to the $1.3 trillion sports market1 through its proprietary Marketplace Engine. SportgoTM is also the first-and-only online network to provide educational content created exclusively by hall-of-fame and professional athletes, which has been a key driver in user growth.
1 Source: Plunkett Research. Ltd.
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The shares of ProSmart Enterprises Inc. trade publicly on the TSX Venture Exchange under the symbol TSXV:PROS.
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Forward-looking Statements: Certain statements in this press release are “forward-looking statements” which reflect the Company’s current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “estimates”, “predicts” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including without limitation, those risks and uncertainties discussed elsewhere on the website at www.prosmartinc.com and in the Company’s filings on SEDAR. Investors should not place undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date hereof and is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities issued, or to be issued, under the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.