Kingsman Resources Inc. has entered into two separate definitive agreements, both dated effective Jan. 31, 2014, to acquire Telos Entertainment Inc. of Prince Edward Island, Canada, and Contagious Sports Ltd. of London, United Kingdom. Kingsman will acquire 100 per cent of the issued and outstanding common shares of Telos in exchange for common shares in the capital of Kingsman, and 100 per cent of the issued and outstanding common shares of Contagious Sports in exchange for common shares in the capital of Kingsman. Both of these transactions are arm's length and will constitute a reverse takeover pursuant to the policies of the TSX Venture Exchange.

In consideration for the Transactions, and on the closing thereof, Kingsman expects to issue to the Contagious Sports shareholders a total of 40,000,000 common shares and to the Telos shareholders 35,000,000 common shares at a deemed price of $0.20 per common share. The Company will obtain a formal valuation prior to closing in respect of each of Telos and Contagious Sports.

Upon closing of the Transactions, it is anticipated that Kingsman will change its name to "Contagious Inc." and will carry on the businesses of Telos and Contagious Sports. The Company proposes to list as a Tier 2 Issuer on the Exchange (the "Resulting Issuer").

Overview of Telos

Telos is a Charlottetown, PEI based company engaged in developing content for regulated gaming and lottery markets worldwide. Telos is focused on distribution of its proprietary gaming content into three target segments: (a) online instant lottery ("eInstant/ iLottery") (b) online real-money gaming, excluding lottery ("iGaming") (c) mass audience online games ("Casual Gaming"). In addition, Telos also provides third-party development services to select customers.

Telos' approach to creating content is driven by its experience in traditional video game development. It focuses on "gamifying" its content by delivering an intriguing user experience through the creative direction of its development team; comprised of 19 game designers/producers, artists/user interface specialists and programmers. Telos incorporates a researched-based approach to game development working with PhD's in Cognitive Neuroscience and Mathematicians to help increase user engagement and encourage repeat behaviours with deeper immersion and states of 'flow'.

Telos currently has a library of 22 proprietary titles which offers regulated gaming operators, lottery corporations and their service providers with a variety of front-end content, including traditional and original game concepts. The company is committed to consistently creating and bringing to market new
games to add to its library.


United States ("US") lotteries generated $68.7 billion of sales in 2012. Telos is focused on positioning itself for launch of the US eInstant/iLottery market in 2014. A recent shift in federal legislation provided US States with the ability to allow their state-run lottery corporations to offer lottery products online. Out of the 28 States that have considered lottery or gaming-related bills since 2010, Georgia, Michigan, and Illinois have already authorized the sale of online lottery products. Georgia, Michigan, and Illinois are expected to roll out their iLottery/ eInstant programs in 2014. Additional states are expected to follow.

Telos is among the first-movers in the content development market serving US iLottery/ eInstant lottery operators and platform. The company has secured contracts which will deploy Telos' library of titles to State lotteries and its players for a share of the revenue generated. Telos is 1 of 6 developers selected globally by GTech Corporation ("GTech") to provide content for its Lottery Developer Network which provides eInstant/iLottery for US jurisdictions. Telos is also 1 of 4 developers selected globally by Scientific Games International ("Sci-Gaming") to provide content for its Sciplat iLottery platform which provides eInstant/iLottery for US jurisdictions.

In addition to the US, Telos is working on expanding its iLottery/ eInstants business into other regulated jurisdictions globally. Telos is exploring established eInstant/iLottery markets such as the UK and Europe with its current eInstant/iLottery partners.

iGaming and Casual Gaming:

Telos has developed titles for both casual and real-money gaming. The company has entered into an agreement for the distribution of its content with Soul & Vibe and Slingo International, a subsidiary of Real Networks.

In addition to Telos' core focus on distribution of its proprietary titles, the company also has a third party development arm that creates content that will be owned and published by its customers. Telos' customers include: Zynga and Game Show Network.

Overview of Contagious Sports

Contagious is a London, United Kingdom ("UK"), based company, with a development office in Montreal, QC. It is engaged in the development, distribution, and operation of gaming solutions for regulated gaming markets. The company has created and brought a first-to-market remote live ("in-play"), pool betting ("pari-mutuel") sports betting platform (the "Sports Betting System"). The Sports Betting System is powered by its proprietary robust back office management application ("BOMA") and eWallet which can be deployed among a variety of gaming scenarios including: sports betting, slots, bingo, and eInstant/iLottery.

Sports Betting Platform:

Sports betting is the largest segment within the online gaming sector, estimated at US$14.4 billion of gross gambling yield (wagers less prizes) in 2012. Its Sports Betting System is the first-of-its-kind to enable players to remotely make multiple wagers live, in-play during sporting events, for a lottery/ pari-mutual type payout. Contagious Sports has filed a patent (patent pending) and trademark application in the US.

The Sports Betting System has been initially configured for soccer matches. Although the Sports Betting System is currently configured for soccer, it can readily be re-skinned for additional sports, such as hockey, cricket, horse racing or football to target additional markets.

The initial launch of the Sports Betting System has been under the brand name "Goal Time", and is offered as a white-label product for Trinity Mirror PLC ("Trinity Mirror") as well as through the Goalgaming Ltd. ("Goalgaming") regulated gaming platform.

Goal Time Partnerships:

Satellite Information System ("SIS"): Goal Time has become SIS's exclusive in-play pari-mutuel platform partner. It provides official live data for most major soccer leagues, including the Premier League, as well as sales & marketing support. SIS is one of the world's leading providers of broadcast services. Trinity Mirror: Contagious has signed an agreement to provide Trinity Mirror with a white-labelled Goal Time product in exchange for distribution, sales, and marketing support. The product is now live on the Trinity Mirror platform and a sponsored marketing & advertising campaign is imminent. Trinity Mirror is one Europe's largest multimedia publishers and the UK's largest Newspaper group. Goalgaming: Goal Time is live and fully integrated across all Goal Gaming platforms. Goalgaming is headquartered in Malta and operates solely in regulated markets. It is fully licensed in Spain and Malta; operating and It has access to players through a network of local affiliates covering over 20 Countries.

Management and Board of Directors

Adam Kniec has been appointed Chief Financial Officer for the Company, effective immediately, replacing Jeanette Hutchinson, who has resigned as a director and officer in order to pursue her retirement. Adam is a Canadian Chartered Accountant since 2002 and a United States Certified Public Accountant since 2003. Adam has over 16 years of accounting, audit, financial reporting and CFO experience with Canadian and US publicly trading companies. He has experience with business acquisitions and international operations in Asia, North America and South America. He is presently a Chief Financial Officer of a number of Canadian publically trading companies such as Petro Vista Energy Corp. and Great Northern Gold Exploration Corporation, and he is a director and Chairman of the Audit Committee of KCO Capital Inc. He was formerly a Chief Financial Officer of a number of Canadian publically trading companies such as China Health Labs & Diagnostics Ltd., Crosshair Exploration & Mining Corp., Nortec Ventures Corp. and Frontier Pacific Mining Corporation. He previously worked as a Senior Manager at PricewaterhouseCoopers, Chartered Accountants, Vancouver, and a Manager at Staley, Okada & Partners, Chartered Accountants, Vancouver.

Mr. Kniec's experience will be instrumental in carrying through the completion of the Transactions for the Company.

On completion of the Transactions, the new management team and the board of directors of the Resulting Issuer is expected to be comprised of:

Peter Glancy, Chief Executive Officer & Director

Peter Glancy is the current Chief Executive Officer of Contagious Sports. Mr Glancy has over 20 years of experience in the gaming and sports media industries. Mr Glancy's past accomplishments include creating a first-to-market virtual betting format "The Fantastic League".

Sean Yeomans, President & Director

Sean Yeomans is the founder and CEO of Telos Group of Companies. Under Mr Yeoman's leadership, Telos has been among the first to pursue the emerging US eInstant/ iLottery development opportunity. Mr Yeomans has over 18 years of experience in gaming, new media, and animation projects.

Adam Kniec, Chief Financial Officer

Adam Kniec is a Canadian Chartered Accountant and a US Certified Public Accountant. Mr Kniec has over 16 years of accounting, auditing, financial reporting and Chief Financial Officer experience with Canadian and US publically listed companies.

Mark Wadsworth, Chief Technical Officer

Mark Wadsworth is Contagious Sports' current Chief Operating Officer. Mr Wadsworth has over 8 years of gaming development experience and over 10 years of experience with Thomson Reuters developing online trading strategies for some of the world's leading banks.

Charles Shin, Chairman

Charles Shin is the Managing Partner of Gulfstream Capital Corp. and a director of Gulfstream Acquisition Corp. (TSX-V:GFL.P). Mr Shin has 14 years' experience as an investment banker, most recently as a Managing Director in Canaccord Genuity's Canadian Investment Banking group.

Desmond Balakrishnan, Director

Desmond Balakrishnan is a lawyer and has been a partner at the Vancouver office of McMillan since February, 2002. Mr Balakrishnan's practice focuses on mergers, acquisitions, listed company maintenance, international public listings, gaming and entertainment law.

Victor Wells, Director

Victor Wells is an FCPA, FCA, ICD.D with over 22 years of experience with public companies in corporate finance, most recently as CFO for Chemtrade Logistics. Mr. Wells currently sits on the board of directors of Student Transportation Inc. and Unique Broadband Systems Inc.

The completion of the Transactions is subject to a number of conditions, including but not limited to, completion of satisfactory due diligence (including a review of audited financial statements and valuation reports of both, Contagious and Telos) and approval of the Transactions by the Boards of Directors and shareholders of Kingsman, Contagious Sports and Telos. Kingsman will provide a summary of significant financial information about Contagious Sports and Telos in due course. There can be no assurance that the Transactions will be completed as proposed, or at all. Further, the Transactions are not conditional upon the approval of the other.

Currently, Kinsgman is an exploration and development company with a particular focus on gold, copper, silver, lead, zinc, and molybdenum deposits with a potential for economic grades and large tonnages. The Company's focus has been the International Basin property located 35 miles south of Golden, British Columbia


In connection with the Transactions, the Company will undertake an offering of its common shares to raise gross proceeds of up to $5,000,000 with a portion of the proceeds being allocated to developing the complementary businesses of Telos and Contagious Sports (the "Offering"). The Offering will be undertaken on a brokered private placement basis and will be priced in the context of the market. The Company will provide further details of the Offering in future news. In connection with the Transactions, the Company will be seeking an exemption from the sponsor requirements of the Exchange. Notwithstanding the request there is no guarantee that an exemption will be granted. In connection with the Transactions, a finder's fee will be paid to an arm's length party, up to the maximum allowable under Exchange policies.

The Company intends to use the proceeds of the Offering to fund the costs of the Transaction, development of the businesses of Telos and Contagious Sports, and to fund the general working capital expenses of the Resulting Issuer. Any securities issued in connection with the Offering will be subject to a four month and one day statutory hold period pursuant to applicable securities laws.

Trading of the Company's shares will remain halted until completion of the Transaction or until satisfactory documentation is filed with the Exchange. Additional information about the Transaction will be provided by way of a subsequent news release.

Date: 01-Sep-14
Time: 06:37 AM
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