TORONTO, ONTARIO--(Marketwired - Dec. 15, 2016) - Mega View Digital Entertainment Corp. (the "Company") (TSX VENTURE:MVD.H) announces that, on December 14, 2016 Quan Si Kwon ("Quan") and Philip Chong ("Chong"), each being a director of the Company, have entered into an agreement pursuant to which Quan sold to Chong and Chong purchased from Quan 562,799 issued and outstanding common shares in the capital of the Company (the "Purchased Shares") at the price $0.05 per Purchased Share, totaling $28,139.95 in aggregate (the "Share Acquisition").
The Share Acquisition was exempt from the formal take-over bid requirements in applicable Canadian securities laws pursuant to the "private agreement exemption" set forth in Section 4.2 of National Instrument 62-104 - Take-Over Bids And Issuer Bids ("NI 62-104"). The exemption is available to Chong on the basis that: (i) the Purchased Shares are being acquired from not more than five persons or companies in the aggregate; (ii) the bid was not made generally to holders of common shares of the Company; and (iii) the value of the consideration to be paid for the Purchased Shares, including brokerage fees and commissions, is not greater than 115 per cent of the market price of the Purchased Shares at the date of the bid as determined in accordance with applicable Canadian securities laws.
For the purposes of determination of availability of the private agreement exemption as set forth in Section 4.2 of NI 62-104, and in accordance with section 1.11 of NI 62-104, the market price was calculated as simple average of the closing price of securities of that class for each of the business days on which there was a closing price in the 20 business days preceding December 14, 2016, the date of Share Acquisition. So calculated, the market price was determined to be $0.0442, and 115 per cent of which is $0.0508.
The Purchased Shares are being acquired for investment purposes. Depending on market conditions and other relevant factors, Chong may acquire additional common shares of the Company either on the open market or through private acquisitions, including acquisitions from treasury of the Company, or sell Purchased Shares either on the open market or through private dispositions.
Prior to completion of Share Acquisition, Chong owned directly or indirectly2,079,247 common shares of the Company ("Shares") or approximately 38.95 of the total number of issued and outstanding Shares and Quan directly or indirectly owned 563,800 Shares, or approximately 10.5% of the total number of issued and outstanding Shares. Following the completion of the Share Acquisition, Chong will own 2,643,047 or approximately 49.4% of the total number of issued and outstanding Shares and Quan will indirectly control 1,000 Shares, or approximately 0.02% of the issued and outstanding Shares.
Early Warning Reports
As Chong's shareholding prior to the Share Acquisition exceeds 10% of the issued and outstanding Shares and Quan's shareholding will drop below 10% of the issued and outstanding Shares as a result of the of the Share Acquisition, in satisfaction of the requirements of the NI 62-104 and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Early Warning reports respecting the purchase Purchased Shares by Chong and sale of Purchased Shares by Quan will be filed under the Company's SEDAR Profile at www.sedar.com.
The Company also announces that it has reached an agreement with Chong to settle Company's indebtedness to Chong totaling $50,000 and the accrued interest of 5% per annum (the "Indebtedness") pursuant to a promissory note dated July 7,2014 ("Debt Settlement"). Under the terms of Debt Settlement, the Indebtedness, being $52,216.94 is to be settled upon the issuance to Chong of 1,024,358 Shares at a deemed price of $0.05 per Shares. The Debt Settlement is subject to approval by the TSX Venture Exchange.
The Debt Settlement constitutes a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company relies on exemption from valuation and minority approval requirements of MI 61-101. The Company relies on the exemption from valuation requirement pursuant to subsection 5.5(b) of MI 61-101, as the securities of the Company are not listed or quoted on enumerated stock exchanges, and the Company relies on the exemption from minority approval under subsection 5.7 (a) of MI 61-101, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, Debt Settlement, insofar as it involves Chong, exceeds 25 per cent of the issuer's market capitalization.
Early Warning reports respecting acquisition of Shares by Chong in connection with a Debt Settlement will be filed under the Company's SEDAR Profile at www.sedar.com.
CAUTIONARY STATEMENT: Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, future plans and objectives of the Company, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are the risks detailed herein and from time to time in the filings made by the Company with securities regulators including the following: (i) the Company has stopped commercial operations and has no history of profit; (ii) investment in the common shares of the Company is highly speculative given the unknown nature of the Company's business and its present stage of development; (iii) there is no assurance that the Company will find a profitable undertaking or that it can successfully conclude a purchase of such an undertaking at all or on terms which are commercially acceptable; (iv) the directors and officers of the Company will only devote a portion of their time to the business and affairs of the Company and some of them are or will be engaged in other projects or businesses such that conflicts of interest may arise from time to time; and (v) there can be no assurance that an active and liquid market for the Company's common shares will develop and an investor may find it difficult to resell its common shares. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.