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TransGaming Proposes Change of Business to a Real Estate Financing Company

TORONTO, ONTARIO — (Marketwired) — 05/09/16 — TransGaming Inc. (TSX VENTURE: TNG) (the “Company” or “TransGaming”) announced today that it has entered into a non-binding term sheet with Plazacorp Holdings Limited (“Plazacorp”) dated April 18, 2016 through which it is proposing a change of business from one focused on the digital distribution of games for Smart TVs, next-generation set-top boxes and over-the-top devices (the “Existing Core Business”), to that of lending, investing and financing real estate transactions (the “Proposed COB”).


Following a significant erosion of shareholder value in the preceding two years, management and the board of directors of the Company undertook an extensive review process over the past few months. In addition, the Company–s Existing Core Business experienced significant headwinds since the beginning of 2016, slowing revenue growth, leading to the significant cost reductions recently undertaken. Given these challenges, management and the board of directors believe that the Proposed COB outlined below is the ideal manner to maximize shareholders– interests going forward.

The Proposed COB will be preceded by a 35:1 consolidation of the Company–s issued and outstanding common shares (the “Consolidation” and, together with the Proposed COB, the “Transaction”).

Based on TransGaming–s 116,797,889 currently issued and outstanding shares at $0.02 per share, and assuming all other factors remain constant, the proposed Consolidation would result in a consolidated share count of 3,337,082 listed shares at $0.70 per share. Following the proposed Consolidation and the closing of the Private Placement (as defined below), the Company–s total issued and outstanding shares is expected to be approximately 5,562,082 shares.

TransGaming will seek out the necessary shareholder and regulatory approval of the Transaction with a concurrent offering of subscription receipts on a private placement basis of 77,875,000 pre-Consolidation subscription receipts (or 2,225,000 post-Consolidation common shares) to Plazacorp at $0.015 per subscription receipt (or $0.525 per post-Consolidation common share) (the “Private Placement”). The gross cash proceeds of $1,168,125 from the Private Placement (the “Proceeds”) will be held in escrow and automatically converted into common shares of the Company upon completion of the Transaction. The release conditions for the Private Placement (the “Release Conditions”) are the following:

Once the Release Conditions are satisfied and the Proceeds are released from escrow to the Company, the proposed use of the Proceeds shall be used to fund real estate investments as described below. The 2,225,000 common shares (post-Consolidation) to be issued to Plazacorp upon the satisfaction of the Release Conditions would constitute forty percent (40%) of its issued and outstanding post-Consolidation shares, thereby rendering Plazacorp a Principal of the resulting issuer (the “Resulting Issuer”). If the Release Conditions are not met, the Private Placement will not close and the funds will be returned to Plazacorp without interest.

The Proposed COB is an “arm–s length transaction” for the purposes of the TSX Venture Exchange (“TSXV”) and is subject to TSXV approval. The Company intends to apply for a waiver of the TSXV–s sponsorship requirements in connection with the Proposed COB.

Once the requisite shareholder and regulatory approvals of the Transaction are received, the Resulting Issuer, which would likely be subject to the Exchange–s tier 2 initial listing requirements under its “Investment” industry segment, will immediately engage in lending, investing and financing real estate projects under the guidance of a new board of directors and management team that is conversant with investments in this new industry segment. TransGaming–s existing operations under the TSXV–s “Technology” industry segment will continue concurrently with those of the Resulting Issuer only in so far as is required to maximize the value of its GameTreeTV business.

Both Plazacorp and TransGaming acknowledge that the Resulting Issuer will be subject to both the “Technology” and “Investment” industry segments of the Exchange and their respective listing and disclosure requirements until such time as the sale of GameTreeTV is completed.


Plazacorp is a privately-held company incorporated under the laws of the Province of Ontario and involved in real-estate development, construction and financing primarily within Ontario.

Since its inception in the early 1980s, Plazacorp and its related entity, Plazacorp Investments Limited, itself a company incorporated under the laws of the Province of Ontario, have been involved in all facets of the development, financing, and construction of real estate projects including retail plazas and, since the 1990s, condominium construction primarily within downtown Toronto. Both Plazacorp Holdings Limited and Plazacorp Investments Limited are 100% owned and controlled by Mr. Anthony Heller, a resident of the Province of Ontario.

Plazacorp is recognized as one of Toronto–s leading residential development companies, having completed nineteen (19) high-density condominiums with approximately 6,500 units over the past 20 years, with an additional ten (10) projects currently underway at varying stages of development. Plazacorp utilizes more than $100 million in equity capital within projects currently underway, which are valued in excess of $1 billion.


Following receipt of shareholder and regulatory approval for the Transaction and Private Placement, the management team and board of directors of the Resulting Issuer will be reconstituted as outlined below.

Specific financing needs for the first Resulting Issuer private placement will be dependent upon net available cash within TransGaming following the restructuring or sale of its GameTreeTV business.

The Resulting Issuer intends to effect additional capital raises to facilitate continued investment into real estate construction projects either already underway or planned.

The Resulting Issuer will invest in varied types of instruments to fund real estate development projects. Subject to shareholder approval, the initial investments will be into projects currently under development by Plazacorp Investments Limited or a related entity. As additional capital becomes available, the Resulting Issuer intends to invest in non-Plazacorp related real estate developments as well.


Within the real estate industry, financing for real estate developments is currently secured through a mix of internally available funds, quasi-equity and debt (unsecured and secured) investments from high net worth individuals, family offices and select institutional investors. This excludes the larger component of construction financing which is primarily provided by the Schedule I banks in Canada.

However, such investment opportunities have been largely available only to accredited investors. Additionally, due to a lack of direct investment/participation options available to the average retail investor, a significant source of capital for this sector remains untapped within Canada.

The Proposed COB will result in the Company becoming a real estate financing entity which will be listed on the TSXV, providing the average retail investor, together with a wider segment of the institutional investor base, with the opportunity to participate in the real estate development sector within the Greater Toronto Area and within Ontario to a larger extent.


As required by the TSXV–s listing requirements for an Investment Issuer, the Company will adopt an investment policy to govern its investment activities. The investment policy will set out, among other things, the investment objectives and strategy based on the fundamental principles set out above. The final investment policy will be posted on the Company–s website and filed on SEDAR prior to the completion of the Transaction.


The Resulting Issuer plans to seek shareholder approval to establish a new board of directors comprised of at least five (5) individuals, three (3) of whom would be independent of Plazacorp. They include: Mr. Anthony Heller, President Plazacorp Investments Limited, Mr. Sruli Weinreb, Founder and Managing Partner Plaza Capital Inc., Mr. Brice Scheschuk, CEO Globalive Capital and Globalive Communications and current Chair of TransGaming–s Board, Mr. David Roff, Partner Globalive Capital, and one or two additional independent directors.


The Resulting Issuer intends to maintain a relatively small operations team comprised of only two (2) individuals at the outset of the New Listing:

All other functions including corporate legal counsel will be externalized, given the relative size of the entity and the Resulting Issuer–s desire to generate significant earnings to enable maximum distribution to shareholders.

The new board of directors and management team as described would constitute all of the Insiders of the Resulting Issuer.


The Company intends to change its name to “FinDev Inc.” or such other name as the board of directors may determine is appropriate and to select a corresponding trading symbol at the time of the formal name change, subject to TSXV approval.


The Transaction and Private Placement will require the approval of the shareholders of the Company. The Company expects to hold a meeting of its shareholders (the “Meeting”) to obtain this approval as soon as reasonably practicable in the Company–s first fiscal quarter. A majority of shareholders present at the Meeting must approve the Transaction and Private Placement for them to proceed.

Further information regarding the Meeting, the Transaction and the Private Placement will be provided by way of press release as it becomes available and will also be provided in the management information circular to be prepared and mailed to the Company–s shareholders in respect of the Meeting. A copy of the circular will also be filed on SEDAR.

Completion of the Transaction is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of TransGaming Inc. should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

On behalf of the Company,

Dennis Ensing, CEO

Neither 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.

Forward-Looking Statements

Certain statements in this document may constitute “forward-looking” statements, which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such statements use words like “may”, “will”, “expect”, “continue”, “believe”, “plan”, “intend”, “would”, “could”, “should”, “anticipate” and other similar terminology. These statements reflect current assumptions and expectations regarding future events and operating performance and speak only as of the date of this document. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the “Risk Factors” section of the Company–s the most recently filed Annual Report which is available on SEDAR at .

Although the forward-looking statements contained in this document are based upon what we believe are reasonable assumptions, we cannot assure investors that our actual results will be consistent with these forward-looking statements. We assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances, except as required by securities law.

TransGaming Inc.
Dennis Ensing

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