By Zach Arnold | September 17, 2007
MMA Predictions talks about consolidation in the industry.
Pursuant to an agreement dated September 12, 2007 (the “Purchase Agreement”) among King of the Cage, Inc. (“KOTC”), Terry Trebilcock (“Trebilcock”) and Juliemae Trebilcock, the shareholders of KOTC (the “Sellers”), and ProElite, Inc. (the “Company”), the Sellers agreed to sell to the Company all of the share capital (the “Shares”) of KOTC. The consideration for the Shares is the payment to the Sellers of $3,250,000 cash at closing; 178,571 restricted shares of the Company’s Common Stock (the “PE Shares”) to be delivered on January 2, 2008 to the Sellers and/or their designees; and $500,000 in cash to be paid sixty days from closing subject to any offset for any indemnity claims by the Company. Additionally, the Company has agreed to make Contingent Payments (the “Contingent Payments”) over a five-year period of up to an additional $5,000,000 (payable in part in cash and in part in shares of the Company’s Common Stock, as provided in the Purchase Agreement) in accordance with a schedule based on the number of events produced under the supervision of Trebilcock under the KOTC name and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for KOTC’s operations during such period.
Pursuant to an agreement dated September 11, 2007 (the “Purchase Agreement”) among Belgravia Entertainment International Limited (“Seller”), John Faraday and ProElite, Inc. (the “Company”), Seller agreed to sell to the Company all of the share capital (the “Shares”) of Mixed Martial Arts Promotions Limited, an English company (“MMAP”), and the Mixed Martial Arts Productions Limited, an English company (“MMAD”) (together, the “Target Companies”). The consideration for the Shares is the payment to Seller of $1,219,000, the issuance of 500,000 restricted shares of the Common Stock of the Company (the “PE Shares”) and the payment of an additional $1,000,000 within three business days of the first anniversary of the Closing (subject to any offset for breach of warranty). Additionally, ProElite will arrange for the repayment at Closing of (a) a loan by Integrated Technologies and Systems Limited in the amount of $2,600,000 and (b) a loan by Andrew Gear of $181,000, each made to MMAP.
If math and intrepretation serve me right, KOTC is going to get paid $3.75 million USD cash plus 178,571 restricted shares of Pro Elite stock and an additional $5 million USD in cash and stock. As for Cage Rage, $2,219,000 USD ($2.2 million USD) in cash, 500,000 restricted shares of Pro Elite, and paying off $2.8 million USD in debt (loans that Cage Rage had to pay back).
Plus… a legitimate news report about UFC? Zuffa ratings outlook cut to negative on weak operating results.