Spriza Media Inc.
TSX VENTURE : SPZ

Spriza Media Inc.

February 01, 2017 11:00 ET

Spriza Media Inc. Enters into Merger Agreement to Acquire Fanlogic LLC, Announces Proposed New CEO and Board Members, Share Consolidation and Private Placement

CALGARY, ALBERTA--(Marketwired - Feb. 1, 2017) -

NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES

Spriza Media Inc. (the "Corporation") (TSX VENTURE:SPZ) is pleased to announce that it has entered into an arm's length merger agreement with Fanlogic LLC ("Fanlogic"), (a Virginia company) to acquire all of the outstanding equity interests of Fanlogic (the "Proposed Transaction"). Pursuant to the Proposed Transaction, the Corporation will consolidate its common shares on a 5:1 basis and issue 19,000,000 post-consolidation common shares, at a deemed price of $0.15 for a deemed value of $2,850,000 to the Fanlogic securityholders.

The Proposed Transaction

The Proposed Transaction is subject to, among other things, receipt of the requisite approval of Fanlogic, final approval of the TSX Venture Exchange (the "Exchange") and standard closing conditions, including the conditions described below. Subject to satisfactory completion of due diligence, the parties expect to close the Proposed Transaction on or before February 3, 2017 (or such other date as may be mutually agreed in writing between the Parties ("Closing").

As a condition of closing the Proposed Transaction, concurrently with, or immediately prior to the closing of the Proposed Transaction, Spriza will undertake a share consolidation of Spriza Shares (the "Consolidation"). The consolidation will occur on the basis of one consolidated share of Spriza (a "Spriza Consolidated Share") for every five (5) Spriza Shares outstanding.

Upon completion of the Proposed Transaction, the former Fanlogic securityholders will hold approximately 46% of the Spriza Consolidated Shares (without giving effect to the Offering (as defined herein)) and the Spriza Shareholders will hold approximately 54% of the Spriza Consolidated Shares (without giving effect to the Offering).

All Spriza Consolidated Shares issued pursuant to the Proposed Transaction will be freely tradable under applicable Canadian securities legislation but will be subject to contractual restriction on resale of six months. In addition, certain Spriza Consolidated Shares issued in the United States or to or for the benefit of U.S. Persons (as such term is defined under Regulation S of the United States Securities Act of 1933, as amended (the "U.S. Securities Act")) will be "restricted securities" within the meaning of Rule 144(a)(3) of the U.S. Securities Act.

None of the securities to be issued pursuant to the Proposed Transaction have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

About Fanlogic

Fanlogic has developed a multiple sports and social gaming platform, this platform operated commercially for more than 2 years, and had excellent customer feedback on user experience.

Spriza offers a proven customer acquisition platform utilizing contests, competitions and lotteries. With the integration of Fanlogic's social gaming software, Spriza now offers its brands and agencies an even more immersive and interactive platform.

The platform is coupled with the Spriza subscriber network of millions of users which provides brands and agencies access to an active audience that consumes brand driven promotions and incentives in a single sign on environment.

The merger of Fanlogic's gamification software and expertise will enhance Spriza's incentive platform, providing agencies and brands a deeper offering; increasing Spriza's market relevance in social gaming for advertising and licensed revenue opportunities. Gamification is an effective way to attract audience, drive brand engagement and deepen lead generation. The Gamification market is expected to reach $10.02 billion by 2020.

Randy Brownell of Fanlogic says "a recent article in Ad Age states that the total digital advertising spend worldwide in 2017 is predicted to be $547 billion; the combination of our incentive marketing companies affords us an opportunity to claim our portion of that total digital spend".

Please visit www.fanlogic.com and www.spriza.com for further information.

New Board Members and CEO

In connection with the completion of the Proposed Transaction, Randy H. Brownell III and Graham Webster will join the Board of Directors and Scott Seguin and Charanjit Hayre will resign from the Board of Directors. The Board of Directors will then be comprised of David Antony (Chairman), Randy Brownell, Rob Danard, Jay Cowles and Graham Webster.

Following closing, management of the Corporation will be comprised of Randy Brownell (CEO), Rob Danard (President), Jay Cowles (COO), Chris Robbins (CFO) and Trevor Wong-Chor (Corporate Secretary).

Randy H. Brownell III, Proposed Director and CEO

Mr. Brownell is an international executive with over 25 years of diverse experience at the most senior management levels in publicly traded companies dealing in technology and gaming. He has a global track record of success marked by a hands on entrepreneurial operating style with demonstrated and documented skills in spearheading innovation, structuring and managing acquisitions, start-ups and new product introductions. Randy has a Masters in International Management/Finance from the American Graduate School of International Management (Thunderbird).

Graham Webster, Proposed Director

Mr. Webster is an experienced gaming executive, particularly in the highly regulated environment of lotteries and lottery technologies. Graham is a founder of Fanlogic. Previously he was Commercial Director of Betex Group PLC, a provider of lottery technologies. He qualified as a Solicitor in the UK in 1995 with the international law firm Ashursts before spending over 12 years in corporate finance, advising and raising money for SMEs trading on the AIM market of the London Stock Exchange.

The Offering

The Corporation intends to complete a non-brokered private placement of up to 16,666,667 units ("Units") at $0.15 per Unit for total gross proceeds of up to $2,500,000 (the "Offering"). Each Unit will consist of one Spriza Consolidated Share and one warrant ("Warrant"). Each Warrant will entitle the holder thereof to acquire one additional Spriza Consolidated Share at a price of $0.50 per Common Share for a period of two (2) years after the issuance of the Warrant ("Expiry Date").

If, at any time after the expiry of the four (4) month hold period applicable to the Common Shares and Warrants comprising the Units, the closing price of the outstanding Common Shares on the Exchange, is greater than $0.75 for a period of 10 consecutive trading days, the Corporation may, at its option, accelerate the Expiry Date by giving notice thereof to all holders of Warrants, and, in such case, the Warrants will expire on the date which is the earlier of: (a) the 30th day after the date on which such written notice is given by the Company; and (b) the Expiry Date.

Depending on market conditions, the Corporation reserves the right to increase the maximum gross proceeds under the Offering, subject to the approval of the Exchange. The Corporation may pay a finder's fee or commission in connection with the Offering.

The Offering proceeds are expected to be used for transaction costs, marketing of the Spriza/Fanlogic brand, new sales staff, and working capital.

Trading Halt

Trading in the Shares will remain halted pending receipt and review by the Exchange of certain required final documentation from the Corporation. Trading is expected to resume following the review of the final materials by the Exchange. A further press release will be issued in advance of the trading date.

Reader Advisory

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including details about the business of the Corporation and the use of proceeds from the Offering. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks, competition from other industry participants, stock market volatility, and the ability to access sufficient capital from internal and external sources. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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