UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 8-K

CURRENT REPORT 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934 

Date of Report (Date of Earliest Event Reported): March 31, 2021

 

 Monaker Group, Inc.

(Exact name of Registrant as specified in its charter) 

Nevada
(State or other jurisdiction of incorporation)
 

 

001-38402 26-3509845
(Commission File Number) (I.R.S. Employer Identification No.)

 

1560 Sawgrass Corporate Parkway, Suite 130

Sunrise, Florida 33323

(Address of principal executive offices zip code

 

(954) 888-9779

(Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock,

$.0001 Par Value Per Share

MKGI

The NASDAQ Stock Market LLC

(Nasdaq Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

     

 

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

As previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended November 30, 2020, under “Part II-Other Information—Item 5. Other Information”, on January 15, 2021, Monaker Group, Inc. (the “Company”, “we” and “us”), entered into a Founding Investment and Subscription Agreement (the “Investment Agreement”) with Reinhart Interactive TV AG, a company organized in Switzerland (“Reinhart”), and Jan C. Reinhart, the founder of Reinhart (“Founder”).

 

The Investment Agreement contemplated the Company acquiring 51% of the ownership of Reinhart, in consideration for 10,000,000 Swiss Francs (approximately $10.8 million US), The closing of the transactions contemplated by the Investment Agreement was to take place on April 1, 2021, or earlier if the conditions to closing were earlier satisfied. Conditions to closing included the Company paying the required capital contribution, approval of the transaction by the board of directors of the Company and Reinhart, and certain requirements and confirmations required by Swiss law. The Investment Agreement included customary representations and warranties of the parties. We also agreed to reimburse the Founder’s legal fees of up to 30,000 Swiss Francs (approximately $33,670) in connection with the transaction. Additionally, in the event we failed to close the transactions contemplated by the Investment Agreement by April 1, 2021, we agreed to pay the Founder 500,000 Swiss Francs (approximately $560,000), as a break-up fee.

 

We closed the transactions contemplated by the Investment Agreement on March 31, 2021, by paying the Founder $10.8 million in cash. The consideration paid to the Founder came largely from funds advanced by HotPlay Enterprise Limited (“HotPlay”), which entity the Company is party to a pending share exchange agreement to acquire, each as previously disclosed.

 

Reinhart is in the business of providing a software-based TV and video distribution platform to telecom operators and digital content owners and providing services to telecom operators and digital content owners for user interaction design, as well as software development, deployment and support.

 

In connection with our entry into the Investment Agreement, we entered into a Founding Shareholders’ Agreement with the Founder (the “Shareholders’ Agreement”). The Shareholders’ Agreement set forth certain rules for the governance and control of Reinhart. The Shareholders’ Agreement provides that the Board of Directors of Reinhart will consist of five members, three of which will be appointed by the Founder and other shareholders of Reinhart, and two of which will be appointed by the Company which include William Kerby, the Company’s Chief Executive Officer, and Mark Vange, the Chief Technology Officer of HotPlay; that any material shareholder matters are required to be approved by shareholders holding at least 66 2/3% of the total outstanding vote of Reinhart; that in the event Reinhart issues, within five years after the closing date, any equity or convertible equity, with a price less than the most recent valuation of Reinhart’s shares, the shares held by each director who is appointed by the Founder are subject to weighted average anti-dilution protection; provides for various restrictions on transfers of shares of Reinhart, including right of first refusal rights, tag-along rights, and drag-along rights, as well as certain rights which would trigger the right of the other parties to the Shareholders’ Agreement to acquire the shares held by an applicable shareholder, for the higher of the fair market value and the nominal value of the shares (except in the case of (c) where the purchase price is the lower of such amounts), if such shareholder (a) commits a criminal act against the interests of another party, Reinhart or its affiliates; (b) breaches the Shareholders’ Agreement, and fails to cure such breach 20 days after notice thereof is provided; or (c) the employment of any employed shareholder is terminated for certain reasons.

 

The Shareholders Agreement also provides a right for the Founder and any other persons appointed as directors by the Founder to put their shares to the Company, at which time the Company will be required to purchase such shares (the “Founder’s Shares”), based on the following schedule:

 

     

 

 

Date right is triggered Percent of Founder’s Shares
eligible to be sold
Required Purchase Price
January 1, 2024 33% 15 times EBITDA based on audited 2023 Reinhart financials
January 1, 2025 66% 15 times EBITDA based on audited 2024 Reinhart financials
December 20, 2025, if the Board of Directors of Reinhart, together with a majority of the directors appointed by the Company, agree to sell Reinhart to a third party, but the Company and the Founder can’t agree on such sale, by such date 100% Higher of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials
January 1, 2026 100% Lower of (a) 15 times EBITDA based on audited 2025 Reinhart financials; and (b) the value of a fully-funded acquisition proposal based on audited 2025 Reinhart financials

 

The Shareholders’ Agreement also allows the parties to file for an initial public offering on a Swiss trading exchange. The Shareholders’ Agreement has a term of 10 years, extendable thereafter for successive five-year periods, unless terminated by either party with 12 months prior written notice (provided that any such termination shall only be applicable to the terminating shareholder), subject to earlier termination in connection with certain initial public offerings.

 

The foregoing description of the Investment Agreement and Shareholders’ Agreement, do not purport to be complete and are qualified in their entirety by reference to the full text of the Investment Agreement and Shareholders’ Agreement, which are incorporated by reference as Exhibits 2.1, and 10.2 to this Current Report on Form 8-K, and are incorporated by reference in their entirety into this Item 2.01.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

We plan to claim an exemption from registration for the issuance of the Consulting Shares (described below in Item 8.01, which disclosure is incorporated by reference into this Item 3.02), as applicable, pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), since the entry into the Consulting Agreements did not involve a public offering, the recipients are (a) “accredited investors”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act, and the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities will be subject to transfer restrictions, and the certificates evidencing the securities will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.

 

Item 8.01 Other Events.

 

On March 26, 2021, the Company entered into an Agreement For Consulting Services to be Provided (the “Consulting Agreements”), with six individuals, pursuant to which such persons agreed to provide expertise to the Company in connection with the acceleration and expansion of the Company’s Longroot Initial Coin Offering (ICO) Portal, on a month-to-month basis, beginning on March 20, 2021, and continuing thereafter until the Company provides two weeks’ notice to such consultant of its intent to terminate the applicable consulting agreement. The Company agreed to pay each consultant $5,000 per month, which at each consultant’s option may be paid in cash or restricted shares of common stock (the “Consulting Shares”).

 

     

 

 

The description of the Consulting Agreements above is qualified in its entirety by the full text of the Form of Consulting Agreement, a copy of which is filed herewith as Exhibit 10.1, and is incorporated by reference in this Item 8.01 in its entirety.

 

On April 6, 2021, the Company issued a press release announcing the acquisition of Reinhart. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

(a)  Financial Statements of Businesses Acquired

The financial statements of Reinhart, to the extent required to be disclosed pursuant to this Item 9.01, will be filed no later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(b)  Pro Forma Financial Information

Pro forma financial information relative to acquisition of Reinhart, to the extent required to be disclosed pursuant to this Item 9.01, will be filed no later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

  (d) Exhibits

 

Exhibit Number   Description
2.1%#   Founding Investment and Subscription Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, and Reinhart Interactive IV AG (filed as Exhibit 10.30 to the Company’s Current Report on Form 10-Q, filed with the Securities and Exchange Commissions on January 19, 2021, and incorporated herein by reference)(File No. 001-38402)
10.1*   Form of Agreement For Consulting Services to be Provided dated March 25, 2021, and entered into March 26, 2021 between Monaker Group, Inc. and the consultants party thereto
10.2#   Founding Shareholders’ Agreement dated January 15, 2021, by and between Monaker Group, Inc., Jan C. Reinhart, certain other shareholders of Reinhart Interactive IV AG, certain directors of Reinhart Interactive IV AG and Reinhart Interactive IV AG (filed as Exhibit 10.31 to the Company’s Current Report on Form 10-Q, filed with the Securities and Exchange Commissions on January 19, 2021, and incorporated herein by reference)(File No. 001-38402)
99.1*   Press release dated April 6, 2021

 

 

* Filed herewith.

# Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) and/or 601(b)(2) of Regulation S-K. A copy of any omitted schedule or Exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Monaker Group, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or Exhibit so furnished.

 

 

 

% Certain information has been redacted from the exhibit pursuant to Item 601(a)(6) of Regulation S-K (and replaced with #’s) as the disclosure of such information would constitute a clearly unwarranted invasion of personal privacy. A copy of any omitted information will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Monaker Group, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any information so furnished. 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

  MONAKER GROUP, INC.
     
     
Date: April 6, 2021 By: /s/ William Kerby
    Name:   William Kerby
    Title:  Chief Executive Officer

 

 

 

 

 

 

 

     

 

Monaker Group, Inc. 8-K

 

Exhibit 10.1

 

[Consultant] 

[Consultant Address]

 

FORM OF  

AGREEMENT FOR CONSULTING SERVICES TO BE PROVIDED TO:

 

Monaker Group, Inc.
1560 Sawgrass Corporate Parkway, Suite 130
Sunrise, FL 33323

 

THIS AGREEMENT dated March 25th, 2021 is made between Monaker Group, Inc. (MKGI) and [Consultant] ([Consultant]).

 

NOW IT IS HEREBY AGREED as follows:

 

1. [Consultant], as an independent contractor, agrees to provide its expertise to assist MKGI in its efforts to monitor and assist MKGI in efforts to accelerate the company’s desire to expand its Longroot ICO Portal into new areas including the potential expansion of strategic relationships between MKGI and his company - Next One Funding LLC.

 

2. [Consultant]’s services will be provided on a month-to-month basis commencing March 20th and ending upon receiving 2 weeks’ notice from MKGI.

 

3. For its services, [Consultant] shall receive (at his option) either $5000 per month or the equivalent dollar value of shares of MKGI’s restricted common stock for each month of service. It will be the responsibility of [Consultant] to seek any securities advice and legal opinion required to remove restrictive legend on the shares

 

4. [Consultant] represents and warrants to MKGI’s management that it has the experience and ability to perform the required services and will perform these services in a professional, competent, and timely manner; and that its performance shall not infringe upon or violate U.S securities laws and regulations.

 

5. [Consultant] acknowledges that the services rendered to MKGI shall be solely as an independent contractor.

 

6. [Consultant] recognizes and acknowledges that this agreement creates a confidential relationship and that any information concerning MKGI’s business affairs and contacts, methods of operation, and other such information, whether written, oral, or otherwise, is confidential in nature.

 

7. [Consultant] confirms (in the event that he elects to accept Monaker Shares) that he is an “Accredited Investor” as defined in Rule 501(a)1 of the Securities Act of 1933, as amended (the “Act” or the “Securities Act”).

 

This agreement contains the entire understanding of the parties and may not be amended without the specific written consent of both parties.

 

[CONSULTANT]   FOR MONAKER GROUP, INC.  
       
       
       
    Bill Kerby – CEO  
       
Date:     Date:    

 

 

 

  

 

Monaker Group, Inc. 8-K

 

Exhibit 99.1

 

 

 Monaker Group Partnership Acquires Award Winning Digital TV Technology Provider; Plans to Accelerate Global Expansion of HotPlay Advertising Platform 

 

Sunrise, FL – April 6, 2021 – Monaker Group, Inc. (NASDAQ: MKGI), a technology solutions company, today announced that Reinhart Interactive TV, a Monaker-funded strategic partnership, has acquired a leading and award winning Interactive TV supplier, founded in 2001 by former employees of Philips Media.

One of the key drivers behind Monaker’s entry into the Digital TV space, is the planned integration of HotPlay’s advertising platform with the TV and broadcaster eco-systems. 

 

With this acquisition, Reinhart Interactive TV combined with HotPlay’s offering becomes an ESP (Entertainment Service Provider). HotPlay will now have access to a pipeline of further acquisitions with the potential of 50 million broadband and mobile customers to deliver more relevant, better monetizing ads and coupons.

 

According to Monaker, this acquisition represents a low-cost and timely entry into a new distribution channel covering large geographic areas and servicing a vast user base. It is expected to significantly accelerate HotPlay’s global expansion with the broader and faster adoption of the HotPlay platform by advertisers, who will be able to access more users across all devices (SmartTV, Set Top Box, PC, Laptop, Tablet and Smartphones), thereby driving revenue opportunities and benefits for everyone in the ecosystem.

 

According to Reinhart Interactive TV’s chairman, Jan Reinhart, “We are excited to leverage HotPlay and create new revenue streams for our growing client base of telecom operators, who are all well-established in their respective eco-systems. I am encouraged by the response we’re already receiving from existing and potential partners interested in new gaming and advertising content solutions.”

 

As a result of their collaboration, Reinhart Interactive TV and HotPlay expect to develop and provide a gaming ecosystem in which players can seamlessly transition from mobile to television screen, and vice versa, thus increasing customer engagement, keeping users connected on the platform and leading to increased potential for ad revenue and platform “gamer stickiness.” In anticipation of the acquisition and HotPlay integration, Monaker had contracted the development of 16 mini-video games for delivery starting in April. The games are designed to meet the immediate requirements of expanding entertainment options while providing unique in-game advertising and coupon solutions for Reinhart Interactive TV’s current TV and mobile operators.

 

Commenting on the opportunity, HotPlay CEO Nithinan (Jess) Boonyawattanapisut said, “We strongly believe that expanding our ecosystem to include television screens should significantly increase the effectiveness of HotPlay’s in-game advertising when it comes to coupon redemption rates, as coupons can be presented to both the individual gamer and his/her entire household. There is tremendous revenue potential to be unlocked and realized here with benefit for the telecom operators, players, and advertisers.”

 

  

 

“Through a series of strategic acquisitions,” added Monaker CEO Bill Kerby, “we are transforming Monaker into a global technology solutions company with proprietary platforms that monetize products and brands across all devices. As soon as the acquisition of HotPlay is completed, we plan to leverage the customer acquisition power of digital gaming and in-game digital advertising to engage consumers for the benefit of major brands and travel providers. Further consolidating acquisitions by Reinhart Interactive TV are expected.”

 

According to Research and Markets, the Over the Top (OTT) media service market is expected to reach USD 194.20 Billion by 2025, registering a CAGR of 13.87% during the period of 2019-2025. 

 

As previously announced, Monaker is in the process of completing its planned acquisition of HotPlay Enterprise Limited (“HotPlay”), with the next step in that process being Monaker’s special meeting to be held on April 7, 2021, where shareholders will vote on the acquisition of HotPlay and related matters. The acquisition of HotPlay remains subject to closing conditions, provided that Monaker anticipates completing the acquisition, subject to such closing conditions, during the second quarter of calendar 2021.

 

Financial terms and additional information regarding the Reinhardt Interactive TV transaction are available in Monaker’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on April 6, 2021, and available at www.sec.gov.

 

About Reinhart Interactive TV 

Reinhart Interactive TV is a special purpose vehicle sponsored by Reinhart Capital to consolidate technology providers in the digital TV space. Reinhart Capital is a Switzerland-based firm focusing on venture-stage information technology companies co-founded by Jan Reinhart. Prior to founding Reinhart Capital, he served as Investment Officer at Swisscom, as Vice President of Marketing and Business Development InnoPath Software in Sunnyvale, California which was acquired by Qualcomm and as a direct report for New Businesses to SAP’s Chairman, CEO and co-founder. More recently, Jan Reinhart co-founded the pioneering fintech company PayCash which he sold to the German automotive corporation Daimler AG.

 

About HotPlay 

HotPlay is a next generation in-game advertising (IGA) company established as a strategic collaboration from top tier professionals in the key industries of technology, multimedia, games, and entertainment. HotPlay leverages proprietary Artificial Intelligence to reach, engage and convert gamers by seamlessly integrating native ads and non-intrusive digital coupons redeemable through both online and offline channels. Our AdTech is built to connect Advertising partners with the 2.5 billion gamers worldwide delivering campaign performance tracking in real time.

 

  

 

About Monaker Group 

Monaker Group, Inc., is an innovative technology-driven company with plans to build a next-generation company through acquisition and organic growth, leveraging the strengths and channels of our existing technologies with those that we acquire, creating synergy and opportunity in the leisure space. Monaker Group is a party to a definitive agreement (subject to closing conditions, including shareholder approval for the transaction) to acquire HotPlay Enterprise Limited, an innovative in-game advertising and AdTech company. Following the completion of the proposed HotPlay acquisition, Monaker Group plans to transform into NextPlay Technologies, an innovative global technology company focused on consumer engaging products in the video gaming and travel verticals with innovative Ad Tech, Artificial Intelligence and Blockchain solutions. For more information about Monaker Group, visit www.monakergroup.com and follow on Twitter and Linkedin @MonakerGroup.

 

Forward-Looking Statements 

This press release includes “forward-looking statements” within the meaning of, and within the safe harbor provided by the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinions, belief or forecasts of future events and performance. A statement identified by the use of forward-looking words including “will,” “may,” “expects,” “projects,” “anticipates,” “plans,” “believes,” “estimate,” “should,” and certain of the other foregoing statements may be deemed forward-looking statements. Although Monaker believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. Factors that may cause such a difference include risks and uncertainties related to our need for additional capital which may not be available on commercially acceptable terms, if at all, which raises questions about our ability to continue as a going concern; the fact that the COVID-19 pandemic has had, and is expected to continue to have, a significant material adverse impact on the travel industry and our business, operating results and liquidity; amounts owed to us by third parties which may not be paid timely, if at all; certain amounts we owe under outstanding indebtedness which are secured by substantially all of our assets; the closing of the offering disclosed above, and the ultimate terms thereof, including consideration payable to Longroot in connection therewith; the fact that we have significant indebtedness, which could adversely affect our business and financial condition; our revenues and results of operations being subject to the ability of our distributors and partners to integrate our alternative lodging rental (ALR) properties with their websites, and the timing of such integrations; uncertainty and illiquidity in credit and capital markets which may impair our ability to obtain credit and financing on acceptable terms and may adversely affect the financial strength of our business partners; the officers and directors of the Company have the ability to exercise significant influence over the Company; stockholders may be diluted significantly through our efforts to obtain financing, satisfy obligations and complete acquisitions through the issuance of additional shares of our common or preferred stock; if we are unable to adapt to changes in technology, our business could be harmed; our business depends substantially on property owners and managers renewing their listings; if we do not adequately protect our intellectual property, our ability to compete could be impaired; our long-term success depends, in part, on our ability to expand our property owner, manager and traveler bases outside of the United States and, as a result, our business is susceptible to risks associated with international operations; unfavorable changes in, or interpretations of, government regulations or taxation of the evolving ALR, Internet and e-commerce industries which could harm our operating results; risks associated with the operations of, the business of, and the regulation of, Longroot; the market in which we participate being highly competitive, and because of that we may be unable to compete successfully with our current or future competitors; our potential inability to adapt to changes in technology, which could harm our business; the volatility of our stock price; risks associated with our pending share exchange agreement with HotPlay Enterprise Limited, including our ability to close such transaction and dilution caused by such closing, as well as dilution caused by the conversion of our outstanding Series B Preferred Stock and Series C Preferred Stock; the fact that we may be subject to liability for the activities of our property owners and managers, which could harm our reputation and increase our operating costs; and that we have incurred significant losses to date and require additional capital which may not be available on commercially acceptable terms, if at all. More information about the risks and uncertainties faced by Monaker are detailed from time to time in Monaker’s periodic reports filed with the SEC, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, under the headings “Risk Factors”. These reports are available at www.sec.gov. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made only as of the date hereof. The Company takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

Source: Monaker Group

 

Company Contacts: 

Monaker Group 

Richard Marshall 

Director of Corporate Development 

Tel: (954) 888-9779 

Email: rmarshall@monakergroup.com

 

Reinhart Capital 

Jan Reinhart 

Managing Partner 

Email: jan@reinhart.vc  

 

HotPlay 

Nithinan (Jess) Boonyawattanapisut 

Chief Executive Officer 

Tel: +66 2 096 2226 

Email: nithinan@hotplay.games