YDX Innovation Announces Letter of Intent for Reverse Takeover with Moshun Media Development Corp.

Rhea-AI Summary

YDX Innovation Corp (OTC PINK:YDRMF) announced a non-binding Letter of Intent to engage in a reverse takeover with Moshun Media Development Corp. The agreement aims to transform YDX into a media and entertainment company leveraging Moshun Media's connections and capital. This transaction will potentially result in Moshun Media holding approximately 67.53% of the newly formed entity's shares. Completion of the transaction is expected by Q2 2021, subject to due diligence and shareholder approvals. Additionally, YDX is converting debt into shares to improve capital structure.

Positive

• Potential for significant capital influx and industry connections from Moshun Media.
• Transformation into a media and entertainment powerhouse could lead to enhanced revenue streams.
• Debt conversion into shares improves financial positioning.

Negative

• Current YDX shareholders will hold only 32.47% of the resulting issuer post-transaction.
• The transaction is subject to numerous conditions, creating uncertainty around completion.
• Termination of previous acquisition pursuits with Amuka Esports and Shattered Dreams might limit growth opportunities.

VANCOUVER, BC / ACCESSWIRE / March 16, 2021 / YDX Innovation Corp (TSXV:YDX)(OTC PINK:YDRMF)(FSE:APY1) ("YDX" or the "Company") announces that it has entered a non-binding Letter of Intent (the "LOI") dated March 16, 2021, with Moshun Media Development Corp. ("Moshun Media"), a non-reporting issuer in British Columbia, with respect to a proposed business combination transaction (the "RTO Transaction") that will result in the reverse take-over of YDX Innovation by Moshun Media. As part of the RTO Transaction, Moshun Media will acquire all of the issued and outstanding securities of YDX and facilitate the listing (the "Listing") of the resulting reporting issuer (the "Resulting Issuer") on the TSX Venture Exchange ("TSXV).

"Joining forces with the incredible team of Moshun Media is the opportunity we have been looking for to transform YDX into a powerful media, production, entertainment, and experiences group. Moshun Media brings vast experience and connections to prominent names of the film and music industry, as well as access to substantial capital. The team at Moshun Media have an amazing work ethic, mindset and ability to take the Company to another level. All of those factors make the RTO Transaction something that both management and the board of YDX are fully supportive of and excited to complete," stated Daniel Japiassu, CEO of YDX Innovation. Mr. Japiassu further added, "While this news may be surprising for our shareholders the Company is confident that it won't take long to show the tremendous potential that Moshun Media brings to grow in the areas where YDX already does business as well as expand go-forward opportunities. We couldn't be more excited and will work diligently to conclude this RTO Transaction as fast as possible."

About Moshun Media
Created by the experienced founders of Moshun Capital Partners, Moe Negin and Raymond Kisun, Moshun Media is a media acquisition company that integrates media experiences from esports and game development, film, live entertainment and the evolving immersive entertainment industry.

Through key acquisitions, innovative structured financing, proprietary project investment, and cradle-to-grave content management, Moshun Media will build an intelligent, asset-backed, film and entertainment media company. Their primary business is in the identification and acquisition or participation in film assets. The underlying premise stems from two key factors: first, service businesses provide a ready source for potential acquisitions due to succession; second, catalogues and libraries exist with individuals and corporate groups that may be acquired for re-release.

Following the completion of the proposed RTO Transaction, the secondary business activity is media services pro-offering recurring revenue-generating opportunities that showcase a strong blend of entertainment experiences for their audience. This includes straight-to-consumers Virtual Reality games and experiences, immersive exhibitions, and cross-media opportunities.

Raymond Kisun, co-founder of Moshun Media stated: "YDX Management represents experiences with recognized brands that mirror our mindset and collaborative approach, allowing Moshun Media to best leverage our international relationships going forward. There are no borders we cannot cross together!"

Proposed Transaction Summary
The LOI provides that the Company and Moshun Media will negotiate and enter into a definitive agreement respecting the RTO Transaction (the "Definitive Agreement"), according to which Moshun Media will acquire all of the issued and outstanding shares of YDX in exchange for the issuance of YDX shares on a one-for-one basis. It is expected that before the effect of any proposed concurrent financing, the holders of Moshun Media shares will hold approximately 67.53% of the Resulting Issuer's shares, with the remaining 32.47% held by current YDX shareholders.

According to the Letter of Intent, subject to the conditions set forth therein, YDX and Moshun Media will enter into a business combination by way of an amalgamation arrangement or another similar form of transaction which will result in YDX and Moshun Media combining their corporate existence. The parties agree that the final structure of the business combination is subject to receipt of tax, corporate and securities law advice for both YDX and Moshun Media.

As per the LOI, it is anticipated that before or concurrently with the closing of the RTO Transaction, the Company will complete a private placement (the "Financing") to raise gross proceeds agreed by the parties, to satisfy the minimum listing requirements of the TSX-V concerning working capital requirements and public distribution applicable to the Resulting Issuer.

Closing of the proposed RTO Transaction will be subject to the following conditions:

1. Execution of a Definitive Agreement in respect of the proposed RTO Transaction;
2. Completion of satisfactory due diligence by each of YDX and Moshun Media;
3. Receipt by Moshun Media of the annual audited financial statements of YDX as of its most recent fiscal year-end, as well as such other YDX's financial statements;
4. Receipt by YDX of all financial statements of Moshun Media, which are currently being audited;
5. Approval by the shareholders of Moshun Media and the Company of the RTO Transaction;
6. Financing or any interim funding shall be by way of a short-term loan between Moshun Media and YDX. Additional financing will be secured under the requisite TSXV regulations and may require payment of Finder's Fees to a third-party;
7. The satisfaction of all initial listing requirements of the TSXV and all related requirements under the policies of the TSXV;
8. The Resulting Issuer shall complete a name change to a new holding name acceptable to YDX and applicable regulatory authorities;
9. Receipt of all required regulatory approvals, consents, permits, waivers, exemptions and orders; and
10. No breach of the obligations under the LOI or the Definitive Agreement.

It is currently anticipated that the proposed RTO Transaction will close on or before the end of Q2-2021.

A Finder's Fee is due and payable equivalent to $25,000 in cash and $275,000 in common shares, and will be paid to an arm's length party for introducing the Company and Moshun Media.

The composition of the remainder of the Resulting Issuer's board and senior leadership team will be determined at a later date and included in a subsequent news release.

Termination of Letters of Intent with each of Amuka Esports and Shattered Dreams Esports
Regarding the previous announcements of the Letters of Intent for the acquisition by YDX of each of Amuka Esports and Shattered Dreams Esports, the Company would like to announce that in light of the proposed RTO Transaction with Moshun Media, all parties have decided to terminate the respective documents.

"Business opportunities and partnerships will continue to develop between the companies, but we understand that the transaction with Moshun Media should be a priority at this moment. We continue to admire and work with the incredible team of Amuka Esports and SXD. We hope that this new chapter with Moshun Media will lead to mutual opportunities in esports, media, and entertainment and that our collaboration can bring mutual growth to all companies" - stated Daniel Japiassu, CEO of YDX Innovation.

YDX Innovation Debt Conversion
The Company announces, further to its news release of April 16, 2020, that The Sarwal Group Enterprise Inc. (the "Sarwal Group") is converting the current outstanding principal of a revolving loan into common shares of the Company, subject to TSX Venture Exchange approval.

Specifically, the Sarwal Group will be converting $18,510 of principal, at an average conversion rate of $0.16 per share, for the issuance of 116,439 common shares of the Company.

These shares will be subject to a statutory hold period of four months plus one day from the date of issuance.

About YDX Innovation
YDX Innovation Corp. (TSXV:YDX :: www.ydxinnovation.com) is a global leader in the commercialization of immersive new technologies that incorporate virtual reality, augmented reality, esports and gaming. Its core business seeks to monetize through licensing its IP, developing interactive exhibitions and through esports tournaments and content.

Purple Mage Advisors - www.purplemage.com - Purple Mage Advisors (PMA) is a research and data analysis firm that specializes in player recruitment and development in the gaming industry. PMA helps esports and gaming companies with industry reports, player recruitment, player training, data analysis and relevant statistical reporting.

Arkave VR Arena - https://sales.arkavevr.com/ - is a proprietary gaming platform that brings location-based virtual reality to any location-based event or entertainment centre. Arkave features state-of-the-art free roam technology coupled with a vast library of both in-house and third-party games.

YDreams Global - www.ydreamsglobal.com - has developed over 2,000 interactive and immersive experiences for some of the largest global brands including Disney, NBA, Adidas, Cisco, Nokia, Nike, Mercedes-Benz, Coca-Cola, Santander, AB InBev, Qualcomm, Unilever, Fiat and the City of Rio de Janeiro.

RENDER - www.render.gg - Render is a professional video production studio specializing in crafting video content for YouTubers, Streamers, Teams and Brands. Render is highly specialized in gaming content, but also works with a wide variety of digital media.

More Information:
Daniel Japiassu
Director and CEO
dj@ydx.rocks
(604) 704-6466

contact@ydxinnovation.com | www.ydxinnovation.com | www.youtube.com/ydreamsglobal

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

This news release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation: execution of a Definitive Agreement, any potential Financing and the successful closing of the RTO Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. The Company's statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of the Company's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the RTO Transaction, including: that the Company's assumptions in making forward-looking statements may prove to be incorrect; general adverse market conditions and competition; the inability to finance operations and/or obtain any future strategic investment necessary to implement new technologies; the inability to build a sustainable, conscientious company with a stronger presence online through new products in esports and VR; the inability to bring Virtual Reality to consumers directly and offer expertise in immersive technologies; and that market conditions related to the COVID-19 pandemic may negatively affect the outcome of the business or operations of the Company, including its results and financial condition. Except as required by securities law, the Company does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

SOURCE: YDX Innovation Corp.

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FAQ

What is the significance of YDX Innovation's LOI with Moshun Media development corp?

The LOI indicates a strategic move towards a reverse takeover, potentially enhancing YDX's market position in the media and entertainment sector.

What will be the shareholding breakdown after the RTO transaction of YDX?

Post-transaction, Moshun Media shareholders are expected to hold approximately 67.53% of the resulting issuer's shares, while YDX shareholders will hold 32.47%.

When is the expected closing date for YDX's reverse takeover with Moshun Media?

The proposed reverse takeover is anticipated to close on or before the end of Q2 2021.

What are the potential impacts of the debt conversion on YDX's financial health?

Debt conversion may enhance YDX's balance sheet and liquidity, allowing for more operational flexibility.

What previous acquisition pursuits were terminated by YDX due to this transaction?

YDX terminated its Letters of Intent for acquisitions involving Amuka Esports and Shattered Dreams Esports in light of the new proposed transaction with Moshun Media.