TORONTO, ONTARIO--(Marketwired - June 27, 2016) - Imperus Technologies Corp. (the "Company") (TSX VENTURE:LAB) announces that it has changed its name to Tangelo Games Corp., ("Tangelo") effective June 28, 2016, and as of the commencement of trading on that day, will trade on the TSX Venture Exchange (the "TSXV") under the symbol (TSX VENTURE:GEL).
James Lanthier, CEO of Tangelo, commented: "We are pleased to announce an amendment to our acquisition agreement with Diwip Ltd. ("Diwip"). As outlined below, this amendment provides clarity and resolves our future earnout obligations. More importantly, we now have the authority to direct and control our asset base and address several operational priorities."
Accelerating Mobile Growth
We continue to make significant progress in shifting our business towards mobile. This is essential to Tangelo's future growth, as the social casino space is migrating, along with the rest of the world, to mobile. For example, for Q1 2016, Eilers Research estimated a growth rate of 27.6% for mobile social casino games over the same quarter in 2015 while social casino games played on desktop shrank by 8.4% between the same periods.
Our desktop / Facebook business is outperforming the market standard and more importantly we are experiencing strong mobile growth. Revenue from our Spanish and Portuguese language mobile games in Q1 2016, grew an amazing 60% from Q1 2015. Spanish language mobile game revenue is also growing at an accelerating rate; from Q4 2015 to Q1 2016, revenues grew 18%, and from Q1 2016 to Q2 2016 we estimate that it will have grown 30%. Viva Mobile, our multi-game app, reached #5 in Brazil on Android, and Bingo Rider reached #12.
Mobile growth is essential to reducing Tangelo's historical weighting towards desktop revenue. Our metrics show that our business is heading in the right direction. Thanks to the amendment to the Diwip acquisition agreement we now have full control of our development resources and will now prioritize accordingly on maintaining our aggressive mobile growth, particularly in emerging markets where the competitive conditions are more favorable than the US market.
Google's recent decision to discontinue support of Flash requires decisive action on our part to ensure the widest possible audience for our games. As such, we have had to reassign development resources from new game development to re-developing our existing portfolio in HTML5. While we believe that this is the right decision for the business, and would not have been possible without the amendment to the Diwip acquisition agreement, this will have a short term impact on our revenue growth as new game launches will be delayed.
Realizing Integration Synergies
The amendment to the Diwip acquisition agreement permits Tangelo to more effectively integrate our operating businesses and begin to realize related savings. We did not have the ability to fully integrate the businesses under the original Diwip acquisition agreement. We are now moving to centralize management in Barcelona, while maintaining certain development functions in Tel Aviv, and as such, will now begin to realize the cost savings that were part of the original investment case for combining these businesses.
Impact on Guidance
The delay in bringing the businesses together due to the need to negotiate an amendment to the Diwip agreement, the allocation of development resources to deal with the shift to HTML5, and the rapid migration from desktop to mobile will mean that our consolidated business will achieve a run-rate commensurate with the previously stated guidance by the fourth quarter of 2016. Given the dynamic nature of the business and its size, the Company does not plan to provide further guidance.
Amendment to Diwip Acquisition Agreement
Tangelo announces that, subject to certain conditions, it has amended the terms of the original Diwip acquisition agreement with the founders of Diwip, Yaniv Gamzo and Udi Kantzuker, that will see them exit and resign from their full time roles as managers of the Diwip business. Pursuant to this amendment agreement, the Company will settle a portion of the year-one earnout originally owed in cash to the Diwip founders under the Diwip acquisition agreement in common shares of the Company ("Common Shares") rather than cash. In this regard, each Diwip founder will be issued the number of Common Shares equal to the Canadian dollar equivalent of US$113,010 divided by $0.10 (the "Earnout Shares") rather than receiving a cash payment of US$113,010. The issuance of the Earnout Shares is subject to, among other things, TSXV approval. The remaining portion of the year-one earnout owed to the Diwip founders will be paid in cash and Common Shares pursuant to the original terms of the Diwip acquisition agreement. All further potential payments to the Diwip founders, other than the year-one earnout, to be paid pursuant to the Diwip acquisition agreement, including the year-two earnout, are cancelled.
James Lanthier, CEO of Tangelo, commented: "We would like to thank Yaniv and Udi for their contributions to Diwip and the Company. They were trailblazers in the Social Casino space and we will strive to match their legacy of innovation as we go forward."
Credit Agreement Amendment
The Company has reached an agreement with its lenders to slightly amend certain terms of its amended credit agreement previously entered into on November 16, 2015 and amended on February 15, 2016 (the "Amended Credit Agreement"). Under the terms of the amendment, the remaining conditions of the February 15, 2016 Amended Credit Agreement have been waived and the Company has agreed to amend the exercise price for 35,000,000 non-transferrable warrants issued by the Company to its lenders on November 16, 2015 to $0.09 as previously announced on February 16, 2016 in connection with the announcement of the Amended Credit Agreement.
The Company also announces that it has granted a total of 1,097,000 stock options under its stock option plan to various individuals including certain employees, consultants and officers. The options will vest quarterly over two years, all subject to a four month regulatory hold period. All options are exercisable at a price of $0.10 per option for a period of five years from the date hereof. This grant of options is subject to any necessary regulatory or stock exchange approvals.
The Company entered into a new consulting agreement with the President of the Company, Vicenc Marti, to amend, among other things, responsibilities, salary and option entitlements. The agreement also provides for the granting and payment of certain advanced bonuses to the President.
Caution Regarding Forward-Looking Information:
Certain statements in this press release may constitute "forward-looking information" which involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this press release, such forward-looking information may use such words as "may", "will", "expect", "believe", "plan" and other similar terminology. Forward-looking information in this press release includes, but is not limited to, statements regarding financial performance, the integration of our businesses, re-developing our existing portfolio in HTML5, the amendment to the Diwip acquisition agreement and the amendment to the Amended Credit Agreement. Forward-looking information is provided for the purpose of presenting information about management's current expectations relating to the future events and the financial and operating performance of the Company, and readers are cautioned that such information may not be appropriate for other purposes. The forward-looking information involves a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, regulatory requirements, general economic, market or business conditions and future developments in the sectors of the economy in which the business of Tangelo operates. The foregoing list of factors is not exhaustive. Please see the Company's short form prospectus dated March 27, 2015, the Company's Annual Information Form dated November 11, 2015 and other documents available on www.sedar.com, for a more detailed description of the risk factors. The Company undertakes no obligation to update publicly or revise any forward-looking information, whether a result of new information, future results or otherwise, except as required by law.
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