Mysquar Regulatory News (MYSQ)

MySQUAR Limited ("MySQUAR" or the "Company")

MySQUAR announces plan to release new mobile application and issue of US$ 1 million Convertible Loan Note

MySQUAR, the Myanmar-language social media, entertainment and payments platform whose principal activity is to design, develop and commercialise Myanmar-focused internet-based mobile applications, is pleased to announce that it has entered into a cooperation agreement with a Vietnam-based company to publish and operate a mobile market-place application in Myanmar. In addition, the Company is delighted to announce that Sandabel Capital LP ("Sandabel") has agreed to subscribe for a Convertible Loan Note ("CLN") with an aggregate principal amount of up to US$1.0 million ("Notes").

Mobile market-place application - Fastsell

Developed by Fastsell Company Limited, the mobile market place application allows sellers to list their products while buyers can use the application to identify potential purchases and negotiate prices. The app also provides the geographic location of sellers to make purchases easier. Monetisation will come initially from advertising and subscription fees charged to premium accounts, and thereafter handling fees charged on every transaction. According to the perpetual agreement, MySQUAR's share of revenues will be 60%.

The Myanmar-localised version of Fastsell for both Android and iOS devices is planned for release by the end of November 2016 (for the purpose of reference, the sister application, which was released for Vietnam market and is not in the scope of cooperation between MySQUAR and Fastsell, is available at https://play.google.com/store/apps/details?id=vn.fastsell.app&hl=en).

Convertible Loan Note

The Company has issued a US$1.0 million Convertible Loan Note ("CLN"), (representing US$0.9 million net of fees) to the Company, to Sandabel, a private investment company that looks for early-stage investment opportunities. The proceeds will be used to fund working capital, for the development of new games and applications, and to repay part of the existing loan from Rising Dragon Singapore Pte Limited (the Credit Facility from Rising Dragon Singapore Pte Limited however remains available in full to the Company). The first drawdown in respected of the CLN of US$500,000 will happen on the date of the CLN agreement. The subsequent request for drawdown for an amount between US$100,000 - 150,000 will be served no earlier than 45 business days after the date of the first drawdown and each subsequent request for drawdown after that will be served no earlier than 20 business days after service of the previous request 

During the two years term, the CLN will be convertible into new ordinary shares ("Conversion Shares") in the Company at the Noteholder's discretion at a 12.5% discount to the lesser of the volume weighted average share price for the 20 Business Days immediately preceding the date of conversion ("Conversion Date"), or the closing bid share price on the Business Day immediately preceding the Conversion Date. In addition, MySQUAR will issue 1 warrant to Sandabel and 1 warrant to Beaufort Securities Limited for every 2 converted share issued, exercisable at 7.5p per share at any time within 3 years from the date on which the warrants are issued. The Conversion Shares will be subject to 12 months orderly market conditions commencing on the relevant Conversion Date.

The Notes will be secured by a first-priority charge over all of the issued capital stock in the Company's Singaporean subsidiary, Squar Pte Ltd pursuant to a charge agreement between Sandabel and the Company.

Any outstanding amount of the CLN will be redeemed at maturity after two years subject to a 20 per cent. bullet interest payment and MySQUAR will have the right to repurchase, at any time, any outstanding amount of the CLN with the same rate of interest payable on such outstanding amount. 

MySQUAR's CEO, Eric Schaer, said: "Fastsell is an exciting new mobile market place application that can connect buyers and sellers throughout Myanmar in live time, around the clock. The Fastsell app will leverage the synergies of MyCHAT's user acquisition and MyPAY's payment solutions as it commences monetisation via fees levied on transactions. On another note, cooperating with mobile application developers like Fastsell Company Limited will allow MySQUAR to benefit from financial risk-free enlargement of its product portfolio."

"We are also delighted to welcome Sandabel as an investor in the Company. This additional funding will allow us to maximise our ability to take advantage of the many opportunities that are being presented to MySQUAR across our business operations.

Sandabel, a client of Beaufort Securities, was introduced by Beaufort Securities who acted as sole broker with respect to the CLN transaction.

A spokesman for Sandabel said: "We are excited to be making this strategic investment in MySQUAR having been impressed with their highly successful games roll out, take up and aggressive user acquisition. MySQUAR's performance to date has not only demonstrated the capacity for monetisation across a platform they have built incredibly quickly but also the huge appetite for mobile services generally in Myanmar and how well placed MySQUAR is to capture this opportunity." 

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