Mysquar Regulatory News (MYSQ)

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

MySQUAR issues US$ 2.0 million Convertible Loan Note based on fixed milestones

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 delighted to announce that Sandabel Capital LP ("Sandabel" or the "Noteholder") has agreed to subscribe for an additional Convertible Loan Note with an aggregate principal amount of up to USD 2.0 million.

The Company has agreed the terms of a further Convertible Loan Note ("CLN") for USD 2.0 million, (representing US$1.8 million net of fees to the Company), with Sandabel, a private investment company that looks for early-stage investment opportunities. The proceeds will be used, in order of priority, for working capital purposes, to accelerate the development of new games and applications, and to repay the existing loan from Rising Dragon Singapore Pte. Ltd. in full (the credit facility from Rising Dragon Singapore Pte. Ltd. however remains available in full to the Company). The first drawdown in respect of the CLN of USD 500,000 will happen immediately. The second drawdown of USD 350,000 is expected to happen by 31 January 2017. Any subsequent requests for drawdowns in amounts of USD 250,000 can be served no earlier than 20 business days after service of any previous request under the CLN agreement. The CLN agreement is for a period of two years.

Once the aggregate amount drawn down in accordance with the terms of the CLN exceeds USD 1,100,000, the subsequent utilisation requests served by either party on the other (the "Subsequent Utilisation Requests") will only be valid if at the date of the relevant Subsequent Utilisation Request, the Noteholder is satisfied that the Company has been generating a minimum of USD 5,500 of revenue per day on average over the previous 15 business day period ending on the relevant Subsequent Utilisation Request. In addition, the Company covenants to the Noteholder that the subscription for the Notes in full will enable it to become cash flow positive on a monthly basis by no later than 30 June 2017.

During the two year term of the CLN, any amounts drawn down under the CLN agreement will be convertible into new ordinary shares ("Conversion Shares") in the Company at the Noteholder's discretion. The deemed value of the amount of the loan being converted into new ordinary shares will be at a multiple of 1.1 times the value actually drawn down under the CLN agreement and the price at which the conversion is effected will be 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 of the Company 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 Conversion Shares issued. The warrants will be 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 CLNs 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 that has been drawn down by the Company but not converted by the Noteholder will be redeemed at maturity after two years subject to a 20% bullet interest payment. MySQUAR has the right to repurchase, at any time, any outstanding drawn down but not converted amount of the CLN on the same terms.

As of the date of this announcement, the Company has drawn down in full USD 1.0 million from the previous convertible loan note with Sandabel (issued on 30 September 2016), of which USD 750,000 has been converted into ordinary shares.

MySQUAR's CEO, Eric Schaer, said: "We are delighted to receive follow-on investment from Sandabel. This additional funding will allow us to execute our business plan in a more aggressive manner, to continue to drive the business towards positive cash flow and, subject to draw down in full of the CLN and satisfactory financial performance of the business, to repay the Rising Dragon credit facility in full."

Beaufort Securities acted as sole broker with respect to the CLN transaction.

A spokesman for Sandabel said: "We have been impressed with the recent deployment of capital by the Company in to new applications and the strength of their gaming offering. We look forward to 2017 being a pivotal year for MySQUAR as it seeks to maintain a rapid rate of growth and targets positive cash flow."

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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