VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 01/16/13 — Cairo Resources Inc. (TSX VENTURE: QAI.P) (“Cairo” or the “Company”) announces the following:
Termination of Letter of Intent with Newcastle Minerals Ltd.
Further to a news release of October 22, 2012 and by mutual agreement the Company and Newcastle Minerals Ltd. have terminated their Letter of Intent dated October 17, 2012 with immediate effect and without any future liability.
Acquisition of the Shares of Socialitize Limited
The Company has entered into a Share Exchange Agreement (the “Agreement”) dated January 14, 2013 with Socialitize Limited (“Socialitize”), a company incorporated under the laws of Gibraltar, and the shareholders of Socialitize (the “Shareholders”) whereby the Company will acquire all of the shares of Socialitize. Socialitize is the owner of the 2BET2 sports betting and social gambling business, primarily operated through Facebook, iPhone, Android and other mobile devices.
Acquisition Terms
Pursuant to the terms of the Agreement, the Shareholders have agreed to sell, and the Company has agreed to acquire, all the shares in the capital of Socialitize in exchange for 15,000,000 common shares in the capital of the Company (the “Acquisition”). The Company and Socialitize act at arm-s length.
The Acquisition will be an Arm-s Length Transaction (as such term is defined in the TSX Venture Exchange-s policies). None of the insiders of Cairo are insiders of Socialitize or own, directly or indirectly, any of the issued securities of Socialitize. As a result, Cairo is not required under the Exchange-s policies to seek shareholder approval of the Acquisition and should therefore be able to expedite the closing.
Conditions Precedent
The parties- obligations to complete the Acquisition are subject to the satisfaction of the usual conditions precedent including:
Trading in the Company-s common shares on the Exchange will remain halted pending completion of the Acquisition and the related transactions.
All common shares of the Company held by Principals (as such term is defined in the Exchange-s policies) on the completion of the Acquisition will be escrowed pursuant to the policies of the Exchange, which may include securities they acquire under the Financing (defined below).
Wolverton Securities Ltd. has agreed to act as the Company-s sponsor in accordance with the Exchange-s policies and will be paid a fee of $40,000 + HST in cash.
Subject to the approval of the Exchange, the Company has agreed to pay a finder-s fee of 966,667 common shares to an arm-s length party as consideration for introducing Cairo to Socialitize.
Upon completion of the share consolidation, the Acquisition and the Acquisition Financing, the Company will be classified a Tier 2 technology issuer and will have approximately 33,050,000 issued common shares, 6,866,667 share purchase warrants and 3,300,000 new options to be granted on closing of the Acquisition.
Proposed Financing
The Company proposes to complete (conditional upon and concurrently with the completion of the acceptance by the Exchange of the Acquisition) a non-brokered private placement (the “Acquisition Financing”) of C$2,000,000 through the issuance of units at a price of C$0.15 per unit. Each unit will consist of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at a price of C$0.25 for a period of two years. The proceeds of the Acquisition Financing will be allocated toward marketing and revenue generation of Socialitize-s business and for general working capital.
Name Change
Immediately prior to the closing of the Acquisition, the directors of Cairo will resolve, pursuant to the powers granted to them under the Company-s articles to change the name of the Company to a name related to its new business.
Directors and Officers
On completion of the Acquisition, it is anticipated that the directors, senior officers and insiders of the Resulting Issuer will be:
Adriaan Brink (Chairman, President, Chief Executive Officer, Secretary and Director)
Adriaan Brink has been delivering commercial grade technology solutions for the past 30 years, focussing on internet payment systems and gambling technology since 1995. Mr. Brink-s technical knowledge is complemented by his operational experience having operated the Liechtenstein Lotteries for over 10 years and being involved in a number of other online gambling ventures. He has been the founder/director of a number of public listed companies including Earthport PLC (AIM: EPO). Mr. Brink wrote the core code for the 2BET2 sports betting platform and has an intimate knowledge of the software architecture and the internet based gaming and gambling market.
Vivien Chueng (CFO)
Vivien Chuang is a Chartered Accountant (British Columbia, Canada) with several years of experience in the resource and mining sector. She worked at PricewaterhouseCoopers LLP from 2006 to 2010 and Charlton & Company from 2010 to 2011. Ms. Chuang holds a Bachelor of Business Administration degree from Simon Fraser University. Most recently, Ms. Chuang served as the Controller of CDM Capital Partners Inc.
Jason Reed (Chief Marketing Officer)
Jason Reed is a business analyst with the ability to take concepts and ideas and convert them to enticing and usable software. After graduating in 1993 with a B.Sc. (Maths/Comps), Mr. Reed started work in the Investment Banking sector developing software applications for clients such as RBS, Deutsche Bank, Singer and Friedlander, Natwest Stockbrokers and Barclays Capital. For the past 7 years he has operated Reedus Design – a successful marketing and website design company located in Spain.
Tim Streatfeild-James (Director)
Based in Gibraltar, Tim Streatfeild-James worked for the Barclays Group for over 25 years initially in London. He then worked internationally for Barclays in Vanuatu before moving on to hold senior and board level positions in South Korea, the Caribbean, Africa and ultimately as the Country Director in Gibraltar. Since leaving Barclays in 2007 Tim has set up and managed his own successful consultancy business in Gibraltar named Riara Consultants Ltd. that specialises in the financial services sector. He currently holds regulated non-executive directorships covering insurance, banking and experienced investor funds.
Ian Sherrington (Director)
Ian Sherrington is best known in the industry for creating the first ever online sportsbook in January 1996 for Intertops Sportwetten of Salzburg, Austria. As Technical Director of Intertops since 1983, the online sportsbook established a series of industry firsts including the first sportsbook to accept single match bets across the board. Following the success of the online sportsbook, Ian was one of the first to integrate an online casino and established the renowned Intertops affiliate program. During 2003, Ian founded Mahjong Mania in Montreal, Canada. Mahjong Mania created the first aggregated cash-play Mahjong game and was successful in signing up many of the best-known online casinos and software suppliers. Since then Ian has been active as a consultant to a number of notable gaming companies including Microgaming, Crownstar and Netsurf Media.
Kal Malhi (Director)
Mr. Malhi brings to Cairo a wealth of experience in the mineral exploration business. Mr. Malhi has been president of BullRun Investments Inc., a privately held corporation, since 2007. BullRun Investments currently has several properties under option arrangements with TSX-V listed companies, including Cap-Ex Ventures Ltd., Ridgemont Iron Ore, Encanto Potash Corp. and Arrowstar Resources Ltd.
About Socialitize Limited
The business currently operated or undertaken by Socialitize is the design, implementation and operation of sports betting as a social gambling game for use through Facebook, known as 2BET2.
2BET2 focuses on sports betting and games built around the concept, combining the lure of sports betting with the social nature of Facebook. It has achieved strong growth on Facebook currently adding over 5000 new players per day.
Players are monetized through a number of complementary strategies. Players may purchase additional BB$ (in-game currency) when they run low or so that they may bet on more events in larger amounts. Players are also encouraged to purchase features and prestige in the game. Socialitize will also pursue referral revenues (where such activity is legal and in accordance with Facebook terms) whereby players who purchase items or spend money at synergistic websites will generate commission revenues for the company. Socialitize will also seek to generate revenues with new group orientated features such as clubs and tournaments, where individuals will be required to subscribe in order to participate.
2BET2 is also available as a web app on Apple iPhone and Android devices and will be released in more formats over coming months. Mobile apps are a core focus for the company.
General
Cairo is a capital pool company and the Acquisition and accompanying Acquisition Financing will constitute the Company-s Qualifying Transaction.
The completion of the Acquisition, the Company-s name change and the change of its business are subject to a number of conditions, including but not limited to, satisfactory due diligence, all necessary approvals including the acceptance of the Exchange. There can be no assurance that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Filing Statement yet to be prepared in connection with the transaction, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading of the securities of the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Kal Malhi, President, CEO and Director
Statements in this press release relating to the completion of the proposed acquisition of Socialitize Limited, including completion of the concurrent financings, may be “forward-looking statements” or “forward-looking information” under applicable securities laws. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Cairo Resources Inc. 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 plans or expectations include market prices; availability of capital and financing; general economic, market or business conditions; receipt of necessary minority shareholder approvals; receipt of and timeliness of government or regulatory approvals; regulatory changes; and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
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 RELEASE.
Contacts:
Cairo Resources Inc.
604-646-1553
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