UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 30, 2018 (November 20, 2018)

 

SMAAASH ENTERTAINMENT INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-38188   82-1231127
(State or other jurisdiction of
incorporation or organization)
  (Commission File Number)   (I.R.S. Employer
Identification Number)

 

1345 Avenue of the Americas, 11th Floor

New York, New York

  10105
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (212) 878-3684

 

I-AM CAPITAL ACQUISITION COMPANY

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

 

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))

 

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.

 

 

 

Introductory Note

 

On November 20, 2018 (the “ Closing Date ”), Smaaash Entertainment Inc. (formerly known as I-AM Capital Acquisition Company) (“ I-AM Capital ”) and Smaaash Entertainment Private Limited, a private limited company incorporated under the laws of India (“ Smaaash ”), consummated the transactions (the “ Transactions ”) contemplated by the share subscription agreement (as amended by the Amendment Cum Addendum dated June 22, 2018, the Second Amendment Cum Addendum dated August 2, 2018, the Third Amendment Cum Addendum dated November 1, 2018 and the Fourth Amendment Cum Addendum dated November 15, 2018, the “ Subscription Agreement ”), following the approval at the special meeting of the stockholders of I-AM Capital held on November 9, 2018 (the “ Special Meeting ”).

 

Pursuant to the Subscription Agreement, the total purchase price of $150,000 was by paid I-AM Capital to Smaaash in exchange for 300,000 newly issued equity shares of Smaaash at the closing of the Transactions (the “ Closing ”). I-AM Capital also issued 2,000,000 shares of its common stock to AHA Holdings Private Limited (“ AHA Holdings ”, and together with Shripal Morakhia, the “ Smaaash Founders ”), as an upfront portion of the Transferred Company Shares (as defined below).

  

In connection with the Closing, I-AM Capital changed its name from I-AM Capital Acquisition Company to Smaaash Entertainment Inc. (the “ Company ”).

 

Unless the context otherwise requires, the “ Company ” refers to Smaaash Entertainment Inc. at and after the Closing, “ Smaaash ” refers to Smaaash Entertainment Private Limited and its consolidated subsidiaries, and “ I-AM Capital ” refers to the registrant prior to the Closing. Certain terms used in this report have the same meaning as set forth in the definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “ Commission ”) on September 19, 2018 by I-AM Capital (as amended by the definitive additional materials on Schedule 14A filed on November 5, 2018, the “ Proxy Statement ”).

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Escrow Agreement

 

Pursuant to the Subscription Agreement, the Smaaash Founders agreed that within six months following the Closing Date, they will transfer all of their ownership interest in Smaaash (representing 33.6% of the share capital of Smaaash on a fully diluted basis as of June 22, 2018) (the “ Additional Smaaash Shares ”) to the Company in exchange for newly issued shares of common stock of the Company (the “ Transferred Company Shares ”) in an amount which would enable the Smaaash Founders to retain their 33.6% ownership interest in Smaaash indirectly through their interest in the Company.

 

At the Closing, the Company issued an aggregate of 2,000,000 shares of its common stock to the Smaaash Founders as an upfront portion of the Transferred Company Shares (the “ Upfront Company Shares ”). In connection with the issuance of the Upfront Company Shares, the Company entered into an escrow agreement with Morakhia and Ellenoff Grossman and Schole LLP. Pursuant to the escrow agreement, the Upfront Company Shares will be held in escrow and will be either, (i) if the Additional Smaaash Shares are not transferred in full to the Company within the designated six-month period, cancelled, or (ii) if the Additional Smaaash Shares are transferred in full to the Company within the designated six-month period, released from escrow and the number of Upfront Company Shares will be deducted from the Transferred Company Shares that will be issued to the Smaaash Founders upon the delivery of the Additional Smaaash Shares.

 

This summary is qualified in its entirety by reference to the text of the escrow agreement, which is included as Exhibit 10.5 to this report and is incorporated herein by reference.

 

 

 

Master Franchise Agreement

 

On the Closing Date, the Company entered into a master franchise agreement (“ Master Franchise Agreement ”) and a master license and distribution agreement (“ Master Distribution Agreement ”) with Smaaash. Set forth below is a description of the material terms of these agreements:

 

Franchise and license right . Under the Master Franchise Agreement, Smaaash has granted to the Company an exclusive right to establish and operate Smaaash Centers (as defined under the Master Franchise Agreement) and to sublicense the right to establish and operate Smaaash Centers to third party franchisees, and a license to use the products and other services developed by Smaaash with respect to the Smaaash Centers, in the territories of North America and South America (“ Territory ”). Further, Smaaash has granted to the Company the limited license to use the Trademarks of Smaaash (as set out in the Master Franchise Agreement) for the purposes of establishing and operating the Smaaash Centers in the Territory. The Master Franchise Agreement has been executed on an arms’ length basis between Smaaash and the Company.

 

Obligations of the Company . The Company will not directly or indirectly engage or be concerned with any business which competes with Smaaash’s business in the Territory during the term of the Master Franchise Agreement. The Company will market, promote and publicize the Smaaash Centers in the Territory. The Company or third party sub-franchisees shall be under an obligation to set up at least six Smaaash Centers during the first calendar year.

 

Obligations of Smaaash . Smaaash shall assist in training and installing the equipment and bear all the costs associated therewith. The franchisee or sub-franchisee will bear the cost to set up the Smaaash Center.

 

License fees and other payments . Franchisee or the third party franchisee will be entitled to receive the revenue generated from each of the Smaaash Centers. In connection with the operations of the Smaaash Centers by sub-franchisees, the Company shall be entitled to receive (i) a signup fee equal to 5% of the capital expenditure of the sub-franchisee, (ii) 5% of the revenue of the sub-franchisee on an annual basis; and (iii) a 15% markup of the products sold to the sub-franchisee. Smaaash will not receive any portion of the revenue or other fees in connection with the Master Franchise Agreement.

 

Ownership of Smaaash Marks . Smaaash will be the sole owner of all intellectual property related to the Smaaash Centers. All future rights, goodwill and reputation of the Smaaash Marks shall inure to the benefit of Smaaash.

 

Term of the Agreement . The Master Franchise Agreement will commence from its execution date and continue until the agreement is terminated in accordance with the Master Franchise Agreement.

 

Termination . The Master Franchise Agreement may be terminated (i) by the mutual written agreement of parties or (ii) by Smaaash if the Company fails to make a payment, ceases to operate or abandon’s the Smaaash Centers or fails to use best efforts to market the Smaaash Centers and such failure is not cured within 30 days’ notice of the failure.

 

This summary is qualified in its entirety by reference to the text of the Master Franchise Agreement, which is included as Exhibit 10.1 to this report and is incorporated herein by reference.

 

Addendum to Master Franchise Agreement

 

On November 29, 2018, the Company and Smaaash executed an addendum to the Master Franchise Agreement (the “ Amendment ”). Pursuant to the Amendment, Smaaash grants the Company the exclusive rights to set up family and entertainment centers under the name “Total Sports Center” in the United States (“ Total Sports Centers ”) in which 51% of the investment will be borne by the Company and 49% by Smaaash. Smaaash will be responsible for identifying the locations for setting up, managing and controlling the Total Sports Centers and will carry out all the fit out requirements for such centers. Smaaash will also appoint the management team for the centers. Smaaash will be entitled to 3% of the net revenue of each center, subject to conditions to be confirmed by the parties. This summary is qualified in its entirety by reference to the text of the Amendment, which is included as Exhibit 10.9 to this report and is incorporated herein by reference.

 

Master License and Distribution Agreement

 

Grant of license and distribution rights . Under the Master Distribution Agreement, Smaaash has granted to the Company an exclusive right to purchase from Smaaash specialized equipment and products related to sports and recreational activities (“ Products ”) in the territory under the brand name of Smaaash and sell them with a 15% markup to the customers which will be the sub-franchisees of the Company who will operate the Smaaash Centers, as specified in the Master Franchise Agreement.

 

Pricing . The Company may sell the Products further to any third party franchisees at a minimum of 15% margin over and above the price at which Smaaash sold the Products to the Company.

 

Grant of license in Smaaash Marks. Smaaash has also granted the Company a license to use the Trademarks (as set out in the Master Distribution Agreement) on a royalty free basis for the purpose of promoting the sale of the Products in the Territory.

 

 

 

Ownership of the Smaaash Games . Smaaash will be the sole owner of any intellectual property rights relating to the Products and all the goodwill relating thereto.

 

Term. The Master Distribution Agreement will commence from its execution date and continue until the agreement is terminated in accordance with the Master Distribution Agreement.

 

Termination. The Master Distribution Agreement may be terminated (i) by the mutual written agreement of parties, (ii) by Smaaash if the Company fails to make a payment or use best efforts to market the Products and such failure is not cured within 30 days’ of notice of the failure, and (iii) by the Company for any reason upon 120 days’ notice.

 

This summary is qualified in its entirety by reference to the text of the Master Distribution Agreement, which is included as Exhibit 10.2 to this report and is incorporated herein by reference.

 

Settlement Agreement

 

On November 20, 2018, the Company entered into a settlement and release agreement (“ Settlement Agreement ”) with Maxim Group LLC, the underwriter for the Company’s initial public offering (“ Maxim ”). Pursuant to the Settlement Agreement, the Company made a cash payment of $20,000 to Maxim and issued a demand secured promissory note in favor of Maxim in the amount of $1.8 million (the “ Note ”) to settle the payment obligations of the Company under the underwriting agreement dated August 16, 2017, by and between the Company and Maxim. The Company also agreed to remove the restrictive legends on an aggregate of 52,000 shares of its common stock held by Maxim and its affiliate.

 

The Note accrues interest at 8% per annum from the date of the Note through and including May 20, 2019 and 12% per annum from and including May 21, 2019 through and including August 20, 2019 and 15% per annum from and including August 21, 2019 through and including November 20, 2019. If a late payment occurs and is continuing, the interest rate will be increased to 12% per annum and if from the date of the Note through and including August 20, 2019 and 18% per annum if and from after August 21, 2019. If a late payment remains outstanding for over 48 hours, Maxim may require the Company to redeem all or any part of the Note (“ Alternate Payment Amount ”) at a redemption price equal to 125% of the Alternate Payment Amount.

 

The principal and interest of the Note will be payable upon demand by Maxim or from time to time, in accordance the following schedule:

 

(i) one third of the principal, accrued and unpaid interest and any late charges on May 20, 2019;

(ii) one third of the principal, accrued and unpaid interest and any late charges on August 20, 2019; and

(iii) one third of the principal, accrued and unpaid interest and any late charges on November 20, 2019.

 

The Note is secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar Asset Management Partners Inc. (“ Polar ”), pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Transactions and (ii) that certain stock purchase agreement with K2 Principal Fund L.P. (“ K2 ”), pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Transactions.

 

The amount payable under the Note may be paid in shares of common stock of the Company or securities convertible or exercisable into shares of common stock of the Company (the “ Alternate Equity Payment ”) if and only if the Company and Maxim mutually agree on both the purchase price and, if applicable, the conversion and/or exercise price of each security of the Company issued in such Alternate Equity Payment. Otherwise the payment should be made in cash only.

 

So long as any amount under the Note is outstanding, all cash proceeds received by the Company from any sales of its securities will be used to repay this Note.

 

 

 

This summary is qualified in its entirety by reference to the text of the Settlement Agreement and the Note, which are included as Exhibits 10.3 and 10.4, respectively, to this report and are incorporated herein by reference.

 

Agreement with Chardan

 

On November 16, 2018, the Company executed an agreement with Chardan Capital Markets, LLC (“ Chardan ”), pursuant to which the Company issued 208,000 shares of its common stock to Chardan as compensation for its services upon the consummation of the Transactions. These shares are subject to the same lock-up provisions and entitled to the same registration rights as the shares of common stock held by I-AM Capital Partners LLC, the sponsor of the Company (the “ Sponsor ”). This summary is qualified in its entirety by reference to the text of the agreement with Chardan, which is included as Exhibit 10.7 to this report and is incorporated herein by reference.

 

Letter of Undertaking with Smaaash

 

On November 16, 2018, Smaaash and the Smaaash Founders executed a letter of undertaking, pursuant to which they agreed to issue 300,000 equity shares of Smaaash to I-AM Capital against an investment of $150,000 by I-AM Capital promptly upon receiving the investment and in no event later than November 30, 2018. Smaaash Founders further agreed to transfer 4,000,000 equity shares of Smaaash to the Company in consideration for 200,000 shares of common stock of the Company, simultaneously with the issuance of the 300,000 equity shares of Smaaash to I-AM Capital on or prior to November 30, 2018, as permitted by the laws of India. This summary is qualified in its entirety by reference to the text of the letter of undertaking, which is included as Exhibit 10.8 to this report and is incorporated herein by reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

On November 9, 2018, I-AM Capital held a Special Meeting at which its stockholders considered and adopted, among other matters, the Subscription Agreement. On November 20, 2018, the parties consummated the Transactions.

 

At the Special Meeting, holders of 4,448,260 shares of I-AM Capital common stock sold in its initial public offering (“ Public Shares ”) exercised their right to redeem those shares for cash at a price of $10.2187363 per share, for an aggregate of approximately $45,455,596. Immediately after giving effect to the Transactions (including as a result of the redemptions described above, the issuance of 2,000,000 shares of common stock to the Smaaash Founders, the issuance of 520,000 shares of common stock upon conversion of the rights at the Closing and the issuance of 208,000 shares of common stock to Chardan as consideration for services), there were approximately 5,119,396 shares of common stock and warrants to purchase approximately 5,461,500 shares of common stock issued and outstanding. Upon the Closing, the Company’s rights ceased to exist, and its common stock and warrants began trading on The Nasdaq Stock Market (“ Nasdaq ”) under the symbols “SMSH” and “SMSHW,” respectively.

 

Prior to the Closing, I-AM Capital was a shell company with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company’s primary assets consist of shares in Smaaash. The following information is provided about the business of the Company following the consummation of the Transactions, set forth below under the following captions:

 

Cautionary Note Regarding Forward-Looking Statements;

Business;

Risk Factors;

Properties;

Management’s Discussion and Analysis of Financial Condition and Results of Operations;

Security Ownership of Certain Beneficial Owners and Management;

Directors and Executive Officers;

Executive Compensation;

Certain Relationships and Related Party Transactions;

Legal Proceedings;

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters;

 

 

 

Recent Sales of Unregistered Securities;

Description of the Company’s Securities;

Indemnification of Directors and Officers;

Financial Statements and Supplementary Data; and

Changes in and Disagreements with Accountants and Financial Disclosure.

 

Cautionary Note Regarding Forward-Looking Statements

 

The Company makes forward-looking statements in this Current Report on Form 8-K, including in the statements incorporated herein by reference. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for the Company’s or Smaaash’s businesses. Specifically, forward-looking statements may include statements relating to:

 

the benefits of the Transactions;

the future financial performance of the Company and Smaaash following the Transactions;

changes in the market for Smaaash products;

expansion plans and opportunities; and

other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

 

These forward-looking statements are based on information available to the Company or Smaaash, as applicable, as of the date of this report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the views of Smaaash or the Company as of any subsequent date, and neither Smaaash nor the Company undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

the outcome of any legal proceedings that may be instituted against Smaaash or the Company;

the risk that the Transactions disrupt current plans and operations of Smaaash as a result of the consummation of the Transactions;

the ability to recognize the anticipated benefits of the Transactions, which may be affected by, among other things, competition and the ability of Smaaash to grow and manage growth profitably;

costs related to the Transactions;

changes in applicable laws or regulations;

the possibility that Smaaash or the Company may be adversely affected by other economic, business, and/or competitive factors; and

other risks and uncertainties indicated in the Proxy Statement, including those under “Risk Factors.”

 

Business

 

The business of Smaaash is described in the Proxy Statement in the section titled “ Smaaash’s Business ” and that information is incorporated herein by reference. The business of the Company is described in the Proxy Statement in the section entitled “ Information About I-AM Capital ”, which is incorporated by reference herein.

 

Risk Factors

 

The risks associated with the Company’s and Smaaash’s business are described in the Proxy Statement in the section titled “ Risk Factors ” and are incorporated herein by reference.

 

 

 

Properties

 

The facilities of Smaaash are described in the Proxy Statement in the section titled “ Smaaash’s Business – Properties ” and is incorporated herein by reference. The properties of the Company are described in the Proxy Statement in the section titled “ Information about I-AM Capital- Properties ,” which is incorporated by reference herein.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Certain annual and quarterly financial information regarding the Company was included in the Proxy Statement, in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of I-AM Capital ”, which is incorporated herein by reference.

 

Certain annual financial information regarding Smaaash was included in the Proxy Statement, in the section titled “ Smaaash’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, which is incorporated herein by reference. The disclosure contained in Item 2.02 of this report is also incorporated herein by reference.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information with respect to the beneficial ownership of the Company as of the Closing held by:

 

each person known by the Company to be the beneficial owner of more than 5% of its common stock upon the closing of the Transactions;

each of the Company’s officers and directors; and

all executive officers and directors of the Company as a group upon the closing of the Transactions.

 

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.

 

Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of its common stock beneficially owned by them.

 

Name of Beneficial Owner (1)    
    Number   Percent
Directors and Executive Officers                
F. Jacob Cherian (2)     1,633,150       30.4 %
Suhel Kanuga (2)     1,633,150       30.4 %
Shripal Morakhia (6)     2,000,000       39.1 %
Donald R. Caldwell (3)            
Roman Franklin (3)            
Max Hooper (3)            
Frank Leavy (3)            
Edward Leonard Jaroski (3)            
William H. Herrmann, Jr. (3)            
All directors and officers as a group (9 persons)     3,633,150      

67.5

%
Principal Shareholders (more than 5%):                
I-AM Capital Partners LLC (2)     1,633,150       30.4 %
The K2 Principal Fund, L.P (4)     1,139,375       19.2 %
Polar Asset Management Partners Inc. (5)     1,150,519       20.6 %
AHA Holdings Private Limited (6)     2,000,000       39.1 %

 

(1) Unless otherwise indicated, the business address of each of the stockholders is 1345 Avenue of the Americas, 11th Floor, New York, NY 10105.

 

 

 

(2) Represents shares of common stock held directly by I-AM Capital Partners LLC, the Sponsor of the Company. F. Jacob Cherian and Suhel Kanuga are managers and members of our sponsor and share voting and dispositive control over the securities held by the Sponsor, and thus share beneficial ownership of such securities. Each of Messrs. Cherian and Kanuga disclaims beneficial ownership over any securities owned by the sponsor in which he does not have any pecuniary interest. The number of shares includes 261,500 shares of common stock issuable upon exercise of 261,500 warrants.

 

(3) Indirectly have an interest in the founder shares of common stock held directly by the Sponsor due to their partial ownership of the Sponsor.

 

(4)

K2 GenPar 2017 Inc., an Ontario corporation (“ GenPar ”), is the general partner of The K2 Principal Fund, L.P., an Ontario limited partnership (the “ Fund ”). GenPar is a direct wholly-owned subsidiary of Shawn Kimel Investments, Inc., an Ontario corporation (“ SKI ”). K2 & Associates Investment Management Inc., an Ontario corporation(“ K2 & Associates ”), is a direct 66.5% owned subsidiary of SKI, and is the investment manager of the Fund. Shawn Kimel is the chairman of each of SKI, GenPar and K2 & Associates. The principal office of the stockholder is 2 Bloor St West, Suite 801, Toronto, Ontario, M4W 3E2. The number of shares of common stock owned by the Fund also includes (i) 66,000 shares of common stock transferred by the Sponsor to the Fund as additional consideration for the Fund agreeing to potentially sell shares of common stock of the Company to the Company pursuant to a stock purchase agreement dated November 5, 2018 by and between the Company and the Fund, (ii) 819,554 shares of common stock of the Company issuable upon exercise of 819,554 warrants. 

 

(5)

Polar Asset Management Partners Inc. serves as investment advisor to Polar Multi-Strategy Master Fund (" PMSMF "), and certain managed accounts (together with PMSMF, the “ Polar Vehicles ”) and has sole voting and investment discretion with respect to the securities which are held by the Polar Vehicles. The principal office of the stockholder is 401 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada. The number of shares of common stock owned by Polar also includes (i) 150,000 shares of common stock transferred by the Sponsor to the Polar as additional consideration for Polar agreeing to potentially sell shares of common stock of the Company to the Company pursuant to a stock purchase agreement dated November 2, 2018 by and between the Company and Polar, (ii) 456,600 shares of common stock of the Company issuable upon exercisable of 456,600 warrants. 

 

(6) Represents shares of common stock held directly by AHA Holdings Private Limited. Shripal Morakhia assists in the governance, operation and management of AHA Holdings Private Limited. He also has voting and dispositive control over the securities held by AHA Holdings Private Limited, and has beneficial ownership of such securities.

 

Directors and Executive Officers

 

The Company’s directors and executive officers after the Closing are described in the Proxy Statement in the section titled “ Management After the Transaction ” and is incorporated herein by reference.

 

Executive Compensation

 

The executive compensation of the Company’s executive officers and directors is described in the Proxy Statement in the section titled “ Management After the Transaction – Executive Compensation ” and is incorporated herein by reference.

 

Certain Relationships and Related Transactions

 

The certain relationships and related party transactions of the Company and Smaaash are described in the Proxy Statement in the section titled “ Certain Relationships and Related Person Transactions ” and are incorporated herein by reference.

 

 

 

Legal Proceedings

 

Reference is made to the disclosure regarding legal proceedings in the sections of the Proxy Statement titled “ Smaaash’s Business – Legal Proceedings ” and “ Information about I-AM Capital – Legal Proceedings ” and is incorporated herein by reference.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

Information about the market price, number of stockholders and dividends for the Company’s securities is set forth in the Proxy Statement in the section entitled “ Price Range of Securities and Dividends ,” which is incorporated herein by reference. On November 23, 2018, the closing sale price of the Company’s common stock and warrants was $5.50 per share and $0.37 per warrant, respectively. During the period from September 1, 2018 through November 23, 2018, the high and low sales prices for the Company’s common stock were $11.05 and $5.40, respectively, and the high and low sales prices for the Company’s warrants were $0.45 and $0.21, respectively.

 

The Company’s common stock and warrants began trading on the Nasdaq under the symbols “SMSH” and “SMSHW”, respectively, on November 23, 2018, subject to ongoing review of the Company’s satisfaction of all listing criteria post-business combination. The Company has not paid any cash dividends on its common stock to date.

 

Recent Sales of Unregistered Securities

 

Reference is made to the disclosure set forth under Item 3.02 of this report concerning the issuance of the Company’s common stock, which is incorporated herein by reference.

 

Description of the Company’s Securities

 

A description of the Company’s securities is included in the final prospectus, dated August 16, 2017 in the section entitled “ Description of Securities ,” which description is incorporated herein by reference. Certain disclosure of the Company’s securities is also contained in the Proxy Statement in the sections titled “ Comparison of Rights as A Holder of I-Am Capital Common Stock and the Rights of the Company as A Holder of Smaaash Equity Shares ” and is incorporated herein by reference.

 

The Company has authorized 205,000,000 shares of capital stock, consisting of 200,000,000 shares of Common Stock, $0.0001 par value per share, and 5,000,000 shares of preferred stock, $0.0001 par value per share.

 

Upon consummation of the Transactions, there were 5,119,390 shares of common stock and no preferred stock issued and outstanding and 5,461,500 warrants to purchase an aggregate of 5,461,500 shares of common stock outstanding. The Company believes there were 8 record holders of common stock and 2 record holder of warrants to purchase common stock immediately after the Closing.

 

Indemnification of Directors and Officers

 

The description of the indemnification arrangements with the Company’s directors and officers is contained in the Proxy Statement in the section titled “ Information about I-AM Capital – Limitation on Liability and Indemnification of Directors and Officers, ” which is incorporated herein by reference.

 

Financial Statements and Supplementary Data

 

Reference is made to the disclosure set forth under Item 9.01 of this report concerning the financial statements and supplementary data of the Company and Smaaash.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

Certain annual and quarterly financial information regarding the Company was included in the Proxy Statement, in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of I-AM Capital ”, which is incorporated herein by reference.

 

Certain annual financial information regarding Smaaash was included in the Proxy Statement, in the section titled “ Smaaash’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, which is incorporated herein by reference.

   

SMAAASH’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of Smaaash’s financial condition and results of operations is based upon, and should be read in conjunction with Smaaash’s financial statements and related notes that appear elsewhere in this report. Smaaash’s financial statements are prepared in accordance with IFRS. Smaaash’s fiscal year ends on March 31 of each year. The six month financial statements have been prepared for the period from April 2018 to September 2018. Accordingly, all references are for the six months ended September 30,2018. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. For additional information regarding such risks and uncertainties, see “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

 

Overview

 

Smaaash operates 40 state-of-the-art games and entertainment centers (the “Centers”) including 39 Centers in India and one international Center in the U.S., in addition to carrying out product sales of its games and equipment that Smaaash has developed in-house, supported by its sponsorship and other revenues.

 

Smaaash’s core concept is to offer an interactive, immersive and fun experience to customers at its Centers, blending Augmented Reality (“AR”) and Virtual Reality (“VR”) and other games, indoor entertainment, and attractive food and beverage (“F&B”) options, customized to the tastes and preferences of a diverse set of customers across age groups, genders and backgrounds, including corporate customers, families, friends and children. Smaaash’s game concepts are supported by its in-house technology, value engineering and systems integration capabilities.

 

Smaaash’s game attractions are classified as follows:

 

  Active games and interactive sports simulators (“Active Games”), including active game options such as single and multi-level go-karting lanes and bowling alleys, as well as interactive simulator-based game options such as Super Keeper, Hoop Shot, Extreme Drone Racing and more;

 

  In-house developed AR and VR games, including Finger Coaster, Jurassic Escape, Vertigo Walk The Plank, Fly Max and Haunted Hospital; and

 

  Arcade games and others, including Camel Racing, Hoop Shot and Human Claw; soft play zones which are conceptualized as indoor play areas for young children, including a ball pool, designed to encourage longer and repeat visits to Smaaash’s Centers and doing away with the requirement for families to make alternative childcare arrangements for the duration of their visits to its Centers; and indoor game viewing areas.

 

Smaaash’s game offerings are complemented by its in-house food & beverage services.

 

Smaaash launched its flagship Center in November 2012, at Kamala Mills in Lower Parel, Mumbai, with a proprietary cricket game (obtained by Smaaash under a perpetual license from its founder and the patent-holder, Shripal Morakhia, for a one-time fee) as anchor attraction. Over the last five years, Smaaash has transformed into a multi-center integrated games and entertainment company, with a wide suite of in-house developed AR and VR and other games, as well as F&B options at each of its Centers. Among other marketing initiatives, from time to time, Smaaash ties up with local athletes, sports icons and celebrities, including cricket, football, basketball and ice hockey players, to customize its games and increase their appeal to its customers, including via brand ambassadorships and game options designed around specific sports personalities.

 

Smaaash launched its first international Center in December 2016, at the Mall of America in Minnesota, USA. Its star attraction in its U.S. Center is a multi-level go-karting track and games developed and launched by us specifically for this Center, keeping in mind local preferences, such as its ice hockey-themed game called “ What the Puck ”, and Active Games such as Super Keeper, Hoop Shot and Extreme Drone Racing, among others

 

 

 

 

In fiscal year 2018, Smaaash acquired PVR bluO and SVM’s bowling and gaming assets to expand its footprint across India. The acquisitions added 20 Centers to Smaaash’s portfolio.

 

Factors Affecting Smaaash’s Results of Operations

 

Visitors to the centers:

 

Smaaash derives a significant portion of its revenue from operations through gaming revenues that are dependent on the visitors to its Centers. Smaaash also derives income from its F&B offerings. Smaaash seeks to attract visitors to its centers by continuously improving and increasing its gaming and F&B offerings, providing innovative products and technology and quality customer service.

 

Product Sales:

 

With a dedicated product development laboratory located at Worli, in Mumbai, India, Smaaash currently has over 25 new games under development, intended for launch during calendar year 2018. Based on its in-house product development capability, Smaaash has also recently diversified its revenue mix by entering into product sales, including domestic and export sales, where Smaaash retains the intellectual property rights (the “IPR”). Despite its limited operating history in this business, which Smaaash commenced during fiscal year 2016, Smaaash has already established a global footprint with sales of its in-house developed games and equipment in several countries, including USA, Germany, Mexico, China, Turkey and Israel. Smaaash relies on distributors for its third-party sales and does not have long-term contracts or arrangements with such distributors.

 

Employee Costs:

 

Smaaash incurs employee costs for proper functioning of its centers and also to carry out other administrative and selling processes such as finance, IT and marketing. Employee costs in fiscal year 2018 and the six months ended September 31, 2018 were Rs.385 million and Rs.190 million, respectively.

 

Rental:

 

Smaaash is required to pay rent for its premises including its centers and corporate office. Lease expenses in fiscal year 2018 and the six months ended September 30, 2018 were Rs.267 million and Rs.242 million, respectively. The rent is either on a minimum guarantee basis or revenue sharing or a combination of the two.

 

 

 

 

Finance Costs:

 

Smaaash uses debt to finance its operations. Smaaash has a total long-term and short-term borrowings outstanding of Rs.2.876 billion and Rs. 2.888 billion, as of March 31, 2018 and September 30, 2018, respectively. Finance costs in fiscal year 2018 and the six months ended September 30, 2018 were Rs.433 million and Rs.192 million, respectively. Smaaash expects that it will continue to use debt to finance it business and operation.

 

Raw Material Costs:

 

Smaaash’s cost of raw materials consumed was Rs. 224.83 million and Rs. 127 million for fiscal year 2018 and the six months ended September 30, 2018, respectively.

 

As Smaaash incurs significant raw material costs, including import costs, and does not have long term purchase contracts with its vendors, Smaaash may be susceptible to pricing pressures or disruptions in our relationships with our vendors.

 

Critical Accounting Policies

 

In preparing its consolidated financial statements, Smaaash makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Smaaash bases its estimates on historical experience and various assumptions that it believes to be reasonable under the circumstances, the results of which form its basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Smaaash’s results of operations may differ if prepared under different assumptions or conditions. Smaaash believes the following principal accounting policies affect the more significant judgments and estimates used in the preparation of its consolidated financial statements:

 

Impairment reviews

 

IFRS requires management to undertake an annual test for impairment for finite lived assets, to test for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 

Impairment testing is an area involving management judgment, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including management’s expectations of:

 

  growth in EBITDA, calculated as operating profit before depreciation and amortization;

  timing and quantum of future capital expenditures;

  long-term growth rates; and

  the selection of discount rates to reflect the risks involved.

 

Income taxes

 

Smaaash is subject to income taxes in a number of Indian jurisdictions. A significant amount of judgment is required to determine the amount of provision for income taxes. There are certain transactions and calculations for which the ultimate determination by the relevant taxing authorities is uncertain. Smaaash recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be found to be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Where considered necessary, estimates are computed by management based on advice from an external specialist, such as actuaries.

 

 

 

 

Employee benefits

 

The present value of the employee benefit obligation is determined upon actuarial valuation made in conformity with generally accepted actuarial principles and practices by the professional actuary, industry practices and underlying assumptions. The assumptions used in determining the net cost (income) for employment benefits include mortality, retirement age, attrition rate, salary escalation rate, discount rate, and others which are done by professional actuary as per the actuary practices prevailing in India . For example, management confirmed the discount rate of 7.40% for the fiscal year 2018 and the six months ended September 30, 2018. Any changes in these assumptions will have an effect on the carrying amount of employment benefits. After considering professional advice, management determines the appropriate discount rate at the end of each fiscal year. This is the interest rate used to discount the defined benefit obligation and calculate the net interest recognized in profit or loss on the net defined benefit liability. In determining the appropriate discount rate, consideration is given to the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits are to be paid and that have terms of maturity approximating the terms of the related pension obligation. For example, management confirmed the other key assumptions relevant to the defined employment benefit obligations are based in part on current market conditions.

  

Property, plant and equipment

 

Estimates of useful life

 

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. Depreciation is charged so as to write off the cost of assets, other than land and properties under construction, using the straight-line method, over their estimated useful lives/rate of depreciation, as follows:

       
Type of asset   Estimated useful lives
(Years)
 
Office Equipment     5  
Plant and machinery     8-15  
Furniture & Fixtures     5-11  
Vehicles     8  
Computers     3  
Electrical Equipments     10   

 

Leasehold Improvements are amortized over the unexpired period of lease on a straight-line basis.

 

Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge in the income statement.

 

The useful lives and residual values of Smaaash’s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets, certificates obtained from technical persons and anticipation of future events which may impact their life such as changes in technology. Historically changes in useful lives and residual values have not resulted in material changes to Smaaash’s depreciation charge and as of date hereof no such adjustments have been made.

 

 

 

 

Results of Operations

 

The following table sets forth select financial data from Smaaash’s income statement for the periods indicated:

 

      (Rs. in thousands)  
Sr No. Particulars   For the six months ended
September 30, 2018
    For the year ended
March 31, 2018
 
               
I Revenue from operations     1,198,063       1,746,458  
II Product sales     129,932       378,466  
III Other income     17,054       18,959  
III Total revenue     1,345,048       2,143,883  
IV Expenses                
  Cost of material consumed     127,019       224,832  
  Purchase of stock-in-trade     139,728       304,952  
  Change in inventories of stock-in-trade     (35,598 )     (46,132 )
  Employee benefit expense     190,995       385,306  
  Finance costs     192,679       433,186  
  Depreciation and amortisation expense     342,843       553,553  
  Pre Launch expenses     13,202          
  Other expenses     539,009       853,976  
  Total expenses     1,509877       2,709,668  
  Loss from operations (III - IV)     (164,829 )     (565,785 )
                   
  Exceptional Items           26,813  
V Loss before tax (III - IV)     (164,829 )     (592,598 )
VI Tax expense                
  Current tax           (2,091 )
  Deferred tax           (260,723 )
  Total tax expense           (262,814 )
VII Loss for the period from continuing operations (V - VI)     (164,829 )     (329,784 )
                   
VIII Loss from discontinued operations before tax             34  
IX Tax expense of discontinued operations            
X Loss from discontinued operations after tax (VIII - IX)           34  
                   
XI Loss for the period (VII + X)     (164,829 )     (329,750 )
XII Other comprehensive income     74       2,920  
XIII Total comprehensive income for the period (XI + XII)     (164,755 )     (326,830 )

 

Revenue

 

Smaaash’s revenue comprises revenue from operations and other income.

 

 

 

 

Revenue from Operations

 

The following table shows a breakdown of Smaaash’s revenue from operations including product sales for the periods indicated:

 

   

(Rs. in thousands)

 
Particulars   For the six months ended
September 30, 2018
    For the year ended
March 31, 2018
 
             
a) Revenue from rendering of services                
- Gaming     644,910       801,526  
- Food and beverages     311,612       477,646  
- Banquet, corporate events and others     154,119       355,228  
- Sponsorship fees     73,452       97,035  
b) Other operating revenue                
- Professional charges     394       3,154  
- Income from exhibits, merchandise and others     13,575       11,870  
c) Product Sales     129,932       378,466  
Total     1,327,994       2,124,925  

 

Smaaash’s revenue from operations are categorized into three components:

 

Revenue from rendering of services : This comprises (i) revenue from gaming (ii) revenue from food & beverages sold at the centers (iii) revenue from banqueting services which include corporate events, weddings, etc. and (iv)revenue from sponsorship fees. The total amount of revenue from services depends on the number of retail traffic at our centers and their propensity to spend. Ability to continually attract corporate and wedding events also contribute significantly to the revenue under this head.

 

Other Operating Revenue : This comprises (i) professional charges and (ii) income from exhibits, sale of merchandise, etc.

 

Product Sales : This revenue is for the sale of Smaaash’s gaming AR & VR products to third-party users, including leading international theme parks. To boost its revenues Smaaash continually and actively participates in trade fairs, exhibitions and industry conventions to expand its client base.

 

Smaaash’s revenue from operations increased primarily on account of the addition of new centers and the launch of a banquet facility, 18.99 Latitude and the restaurants Verbena and Pravas in the vicinity of the Mumbai center. Addition of new centers has also contributed to the growth in revenues from gaming and food & beverage. Further , for the six months ended September 30, 2018, the revenue from operations is Rs 1.327 billion, an increase of 62% over the fiscal year 2018 numbers as the numbers includes revenues from inorganic acquisitions by Smaaash of PVR Blu O and assets of SVM centers.

 

The Product Sales business has grown to Rs 129 million in six months period ended September 30, 2018 which was Rs.378 million in fiscal year 2018 on account of the expansion of our product folio and the addition of new customers.

 

 

 

 

Other Income

 

The following table shows Smaaash’s components of other income for the periods indicated:

 

    (Rs. in thousands)  
Particulars   For the six months ended
September 30, 2018
    For the year ended
March 31, 2018
 
             
a) Interest income:                
- Bank deposits     1,071       2,456  
- Other financial assets carried at amortised cost            
- Unwinding of security deposits     7,465       9,056  
- Income tax refund            
b) Sundry credit balances written back           12,449  
c) Net foreign exchange gain/ (loss)     2,275       5,056  
d) Other income:                
- Net gain/(loss) arising on financial assets carried at FVTPL     636       1,681  
- Net gain/(loss) arising on financial liabilities carried at amortised cost           (9,028 )
- Net gain/(loss) arising on financial liabilities carried at FVTPL           (6,869 )
- Miscellaneous income     5,607       4,158  
Total     17,054       18,959  

 

Smaaash’s Other Income comprises interest income on bank deposits, security deposits and income tax refund. It also includes sundry credit balances written back on account of the unutilized balances lying unused for more than 6 months in gaming cards written back. This amount keeps fluctuating based on the usage of the cards. The Other Income category also includes foreign exchange gain and notional gains / (losses) arising from valuation of financial assets and liabilities.

 

Expenses

 

Smaaash’s expenses mainly comprise of (i) Employee Benefit Expenses, (ii) Other Expenses, and (iii) Finance Costs.

 

Employee Benefits Expense:   Smaaash’s employee benefits expense is comprise of salaries, discretionary bonuses and allowances, contributions to Provident and other funds, and staff welfare expenses. The following table shows the components of Smaaash’s employee benefits expenses for the periods indicated:

 

   

(Rs. in thousands)

 
Particulars   For the six months ended
September 30, 2018
    For the year ended
March 31, 2018
 
             
a) Salaries and wages, including bonus     166,452       335,089  
b) Contribution to provident and other funds     15,996       27,616  
c) Gratuity     2,000       2,800  
d) Staff welfare expenses     6,548       19,801  
Total employee benefit expense     190,995       385,306  

 

Smaaash’s employee benefits expense comprises salaries, discretionary bonuses and allowances, contributions to provident and other funds, gratuity and staff welfare expenses. Smaaash’s employee benefit expenses were Rs. 385 million and Rs.190 million for the fiscal year 2018 and the six months ended September 30, 2018, respectively. The increase in employee cost has been primarily on account of addition of headcount for supporting the growth of the business at the center and at the corporate level.

 

 

 

 

Other Expenses:   Other expenses include, among other things, expenses related to state government fees and taxes, travelling and conveyance expenses, rent, office and general expenses and power and fuel expenses. The following table shows the components of Smaaash’s other expenses for the periods indicated:

 

    (Rs. in thousands)  
Particulars   For the six months ended
September 30, 2018
    For the year ended
March 31, 2018
 
             
Stores and spares consumed     14,246       33,885  
Utility charges     83,600       117,285  
Lease expense     242,167       267,467  
Repairs and maintenance charges     23,740       34,977  
Insurance     5,139       11,826  
Rates, taxes and license fee     17,618       69,935  
Communication expenses     8,275       14,460  
Travelling and conveyance expenses     17,166       35,725  
Printing and stationery     2,384       4,415  
Branding expenses            
Advertisement and business promotion     40,474       80,021  
Legal and other professional costs     33,316       76,457  
Fund raising and related costs            
Recruitment charges     2,814       2,326  
House keeping charges     14,044       26,974  
Hire charges     493       1,004  
Labour and other related expenses     1,129       3,905  
Security charges     4,505       13,813  
Payment to auditors     4,913       4,707  
Bank charges and credit card commission            
Bad debts            
Advances written off     284        
Provision for doubtful debts           1,551  
Donation     500       44  
Loss on property, plant and equipment sold/ written off     2,430       455  
Miscellaneous expenses     19,774       15,752  
Pre-launch expenses                
Total     539,009       816,976  

 

 

 

 

Smaaash’s other expenses were Rs. 816 million in fiscal year 2018 and Rs. 539 million in the six months ended September 30, 2018. The increase in other expenses, including but not limited to lease rentals, increase in use of consumables, utility charges, advertising and branding charges, was due to the increased number of centers. The legal and professional charges of Rs 33 million for the fiscal year 2018 compared to Rs 76 million for the six months ended September 30, 2018 was on account of the payments made to advisors for the acquisitions and one-off legal expenses. A large proportion of Smaaash’s expenses is relatively fixed, including the cost of full-time employees, fixed rentals, interest costs, security and insurance, and would not vary significantly with retail traffic at our Centers. However, these expenses may continue to increase, in the aggregate, from year to year, particularly as we continue to expand our network of centers in the future.

 

Finance Costs:    The following table shows the components of Smaaash’s finance costs for the periods indicated:

 

    (Rs. in thousands)  
Particulars   For the six months ended
30th September, 2018
    For the year ended
31st March, 2018
 
             
a) Interest costs:                
 - on loans from banks     11,507       15,861  
 - on loans from financial institutions     51,451       98,804  
 - on debentures     122,975       305,740  
 - other interest expenses     349       642  
b) Processing fees and related costs     6,397       12,137  
Total     192,679       433,186  

 

Smaaash has been constantly expanding by opening up new centers organically and inorganically. Company has been utilizing debt to fund such expansion which has contributed to the high-growth trajectory of the business. The total borrowings as at March 31, 2018 was Rs. 2.876 billion and as at six months ended September 30, 2018 was Rs 2.870 billion . The variation in debt for such periods has contributed to the variance in finance costs for the said periods.

 

Depreciation, Amortization and Impairment Expense:   Depreciation and amortization expense comprises depreciation of plant and machinery and other equipment, furniture, office equipment, vehicles, computer hardware and amortization of computer software and other intangible assets . Smaaash’s depreciation, amortization and impairment expense for the fiscal year2018 and the six months ended September 30, 2018 was Rs. 553 million and Rs.343 million, respectively. This was primarily as a result of an increase in capital assets resulting from an increase in the number of centers.

 

Income Tax Expense:

 

Income tax comprises current tax and deferred tax. Provision for current income tax is made on the assessable income and benefits at the rate applicable to the relevant assessment year. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to certain considerations. Deferred tax is measured using the tax rates enacted or substantively enacted as of the balance sheet date. Deferred assets carried forward are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be utilized. Any reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

  

 

 

 

Financial Condition, Liquidity and Sources of Capital

 

Cash Flows

 

The table below summarizes Smaaash’s cash flows for the fiscal year 2018 and six months ended September 30,2018 (in Rs. Thousands):

 

    Six months ended
September 30, 2018
    Fiscal Year
March 2018
 
Net Cash From/(Used in) Operating Activities     541,506       (143,077 )
Net Cash From/(Used in) Investing Activities     (807,938 )     (2,151,435 )
Net Cash Provided By/(Used in) Financing Activities     194,724       2,280,823  
Net Increase in/(Decrease in) Cash And Cash Equivalents     48,131       119,840  

 

Operating Activities

 

Net cash from operating activities consisted of a net loss before tax as adjusted primarily for non-cash and non-operating items, such as depreciation, amortization and impairment, finance costs, and gains / losses arising from accounting valuation of financial assets and liabilities. The change from fiscal year 2017 to fiscal year 2018 is mainly due to difference in operating profit before working capital changes. Changes in working capital primarily constitute of changes in trade and other receivables, inventory and trade payables.

 

Investing Activities

 

Net cash from investing activities consisted primarily of payments for property, plant and equipment . Payments for purchase of fixed assets were Rs 2182 million for the fiscal year 2018 as compared to Rs 826 million in the six months ended September 30, 2018.

 

 

 

 

Financing Activities

 

Net cash from financing activities constitutes mainly of proceeds and repayment of borrowings and issue of share capital. The proceeds from borrowing in the fiscal year 2018 was Rs 3.011 billion and 312 million in the six months ended September 30, 2018. Smaaash repaid Rs. 2.136 billion in fiscal year 2018 and Rs. 179.28 million in the six months ended September 30, 2018.

 

Borrowings

 

The total borrowings as at March 31, 2018 was Rs. 2.876 billion compared to Rs. 2.888 billion as at September 30, 2018.

 

The following table summarizes Smaaash’s secured and unsecured long-term indebtedness as of September 30, 2018:

 

Particulars

Secured /
Unsecured

 

Outstanding indebtedness
as of September 30, 2018
(Rs. Million)
  Interest Rate
%*
 
NCD- ECL Finance Secured 2,148.89   14.75 %
SIDBI Secured 172.99   13.95 %
Tata Capital Secured 151.40   12.25 %
YES Bank Secured 403.47   11.00 %
AHA Holdings Unsecured 11.70   Interest Free  
Total   2,888.46      

 

 

 

 

A. Details of Secured Borrowings of Smaaash

 

Set forth below is a summary of Smaaash’s secured borrowings as on six months ended September 30, 2018 (unless otherwise stated)

 

Lender Amount
Outstanding
as of September
30, 2018 (Rs
million)
Repayment / Tenor Security
NCD- ECL Finance 2,148.89 Issuer shall repay to debenture holder 50%, 4%, 13% 15% and 18% of investment amount in fiscal year 2019, fiscal year 2020, fiscal year 2021, fiscal year 2022 and in fiscal year 2023 respectively 1.  A-2/5, A-2/6 in building no. A known as “Prithvi Apartments” of Prithvi Apartments Co-op. Hsg. Soc. Ltd.” situated at Altamount Road, Mumbai- 400 026 property owned by Mrs. Kalpana Morakhia                                   
2. Plot No. 10, Lonawala Bungalow property owned by AHA Holdings Private Limited                                                        
3. SAM Family Trust to create mortgage over its immovable properties situated at Plot No. 1, Survey No 1088 & 109, Village – Kunenama, Taluka – Maval, District Pune 410401
4.  B-4501, B4601 - Lodha Premises owned by AHA Holding Private Limited                                                                                 
5. Mr. Sushil Karalkar and Elements Learning Centre Private Limited to create mortgage over its immovable properties  situated at Gut No. 219A & 219B at Village Atone, Tal. Sudhagad, Dist. Raigad 6. Harihar para. Gobindapur, baruipur road. Harinabhi. P.s: sonarpur. Dt: 24 pargana( south) . Kolkata -700145.
6. Pledge 100% shareholding of AHA Holdings Private Limited.
7. Pledge 100% shareholding of Elements Learning Centre Private Limited.
8. Pledge 100% shareholding of Gir Holiday Resorts Private Limited.
9. Pledge 100% shareholding of Smaaash Leisure Limited (Formerly known as PVR Bluo Entertainment Limited).
10. Pledge over equity shares of Smaaash Entertainment Private Limited held by AHA Holdings Private Limited.  
11. Charge on investments held in Kotak India Venture Fund – I, Kotak India Growth Fund – II and Kotak Alternate Opportunities (India) Fund held by AHA Holdings Private Limited
12. Exclusive charge over all fixed, movable & current assets of Smaaash Entertainment Private Limited 13. Charge over warrants of Yoboho  New Media Private Limited held by AHA Holdings Private Limited. 14. Mr. Paresh Patel to create mortgage over its immovable properties situated at Survey No – 361, Village Gadhiya, Taluka Dhari, District Amreli, Gujarat.
13. Corporate Guarantee by AHA Holdings Private Limited
14. Personal Guarantee by Mr. Shripal Morakhia & Mrs. Kalpana Morakhia
15. Corporate Guarantee by Smaaash Entertainment USA Limited
SIDBI 172.99 Loan shall be repaid in 84 monthly instalments after a moratorium of 36 month commencing from February 10, 2018. After 36 month the loan amount will be repaid in 47 instalments of Rs 2.1 million each and balance Rs 1.3 million in last instalment. The loan amount is secured by second charge on all movables assets including current assets of Smaaash. The charge would be subservient to all the existing and prospective charges created/to be created by Smaaash on the said assets in favour of those banks/ financial institution which have extended/would extend business loans (viz. term loans for machineries, business premises and working capital) to Smaaash for the same business for which SIDBI has extended this sub-debt. All such aforesaid lenders would be referred to as ‘senior secured lenders’ Guarantee
Irrevocable and unconditional guarantee of Shripal Morakhia and Ms Ami Zaveri. The guarantee shall be joint and several.

 

 

 

 

    Loan shall be repaid in 72 monthly instalments after a moratorium of 24 month commencing from April 10, 2018. Primary Security
First pari passu charge with Piramal over the movable and current assets of the borrower pertaining to Bangalore, Ludhiana and Mumbai Go Karting projects.
Collateral security
First charge by way of mortgage of all immovable properties owned by Shri Nitya Gopal Bank situated at Harihar Para, Gobindapur, Baruipur road, Harinabhi, P.S. Sonarpur District 24, Parganas (South), Kolkata, bearing survey/block/plot no. JL no. 76, Touzi no. 70/71, Khatian no. 30,31,627,325,329,330,327, Plot no. 602,619,607,620,644,597,598,497,623,500,585,625,621,586,622,617,P.S Sonarpur district 24 Pargana (South), admeasuring 4 acres.
Guarantee
Irrevocable and unconditional guarantee of Shripal Morakhia, Ami Zaveri, Nitya Gopal Banik, Aha holding Private Limited and Mrs Kalpana Morakhia. The guarantee shall be joint and several.
Tata Capital 151.40 Principal will be repaid in 36 months after the moratorium period of 12 months and the same will be repayable in balance 24 equated monthly instalments start from date of first tranche disbursement. Primary Security
Mortgage of certain immovable property owned by Mr. Nidhiram Mandal and Mr. Khudiram Mandal (situated at 1230,31,32,33,34,35,36,37,38,39,40,41,42,43,44,45,46,47 and 1248 Police station Bhangar, Sonapore, 24 Parganas (South)). having clear and marketable title standing in the name of Borrower / Mortgagor.
Collateral Security
Security in form of fixed deposit of Rs 6 Crores with bank as acceptable and same provided by Aha Holding Private Limited.
       
Yes Bank 403.47 Quarterly installment of Rs 13.5 million starting from June 29,2018

Personal guarantee of Mr.Shripal Morakhia (Director) and Sponsorship receivable. - Personal guarantee of Mr.Shripal Morakhia (Director).

- Exclusive charge on current assets and movable fixed assets(Excluding Vehicle) of the company, both present & future. 

-Exclusive charge on following 3rd party properties located in Kolkata with minimum value of INR 360 MN.

1.Land & Structure measuring 8 Acres located in District South 24, Parganas, Kolkata. 

2.Land measuring 35 Acres located in Matla,District South 24, Parganas, Kolkata.

       

 

 

 

B. Details of Unsecured Borrowings of Smaaash

 

Set forth below is a summary of Smaaash’s secured borrowings as of September 30, 2018 (unless otherwise stated)

 

Lender   Amount
outstanding as of  
September 30, 2018
(Rs. million)
  Repayment/Tenor   Security
AHA Holdings Private Limited   11.7   Payable on demand   Nil

    

 

 

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 2.01 regarding the Note is incorporated by reference into this Item 2.03.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

As described above, on November 20, 2018, the Company issued 2,000,000 shares of its common stock to the Smaaash Founders. The issuance was made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”).

 

On November 20, 2018, the Company issued 208,000 shares of common stock to Chardan in consideration of services rendered. These shares were issued in reliance on Section 4(a)(2) of the Securities Act. The shares issued to Chardan are subject to the same lock-up and will have the same registration rights as the shares of the Company held by the Sponsor.

  

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Election of Directors

 

At the Special Meeting, Donald R. Caldwell, Roman Franklin, Frank Leavy and Edward Leonard Jaroski were each re-elected as Class I directors and Shripal Morakhia was elected as a Class II director.

 

The following persons are serving as executive officers and directors of the Company as of the date of this report. For biographical information concerning the executive officers and directors, see the disclosure in the Proxy Statement in the section titled “Management after the Transaction , ” which is incorporated by reference.

 

Name   Age   Position
         
F. Jacob Cherian   53   Chief Executive Officer and Class II Director
Suhel Kanuga   43   Chief Financial Officer, Secretary and Class II Director
Donald R. Caldwell   71   Chairman and Class I Director
Roman Franklin   34   Class I Director
Max Hooper   71   Class II Director
Frank Leavy   65   Class I Director
Edward Leonard Jaroski   71   Class I Director
William H. Herrmann, Jr.   72   Class II Director
Shripal Morakhia   59   Class II Director

 

 

 

2018 Equity Incentive Plan

 

At the Special Meeting, the I-AM Capital stockholders considered and approved the 2018 Equity Incentive Plan, or the Equity Incentive Plan, and reserved 500,000 shares of common stock for issuance thereunder. The Equity Incentive Plan was previously approved, subject to stockholder approval, by the board of directors on May 1, 2018.

 

A more complete summary of the terms of the Equity Incentive Plan is set forth in the Proxy Statement. That summary and the foregoing description are qualified in their entirety by reference to the text of the Equity Incentive Plan, which is filed as Exhibit 10.6 hereto and incorporated herein by reference.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

Upon the Closing of the Transactions, the Company’s certificate of incorporation was further amended and restated to (i) change I-AM Capital’s name to “Smaaash Entertainment Inc.”; and (ii) make certain changes related to the Company’s transition from a blank check company to an operating company. This summary is qualified in its entirety by reference to the text of the third amended and restated certificate of incorporation, which is included as Exhibit 3.1 to this report and incorporated herein by reference.

 

Item 5.06. Change in Shell Company Status.

 

As a result of the Transactions, the Company ceased being a shell company. Reference is made to the disclosure in the Proxy Statement in the sections titled “ The Business Combination Proposal ” and “ The Subscription Agreement ” and is incorporated herein by reference. Further reference is made to the information contained in Item 2.01 to this report.

 

Item 8.01. Other Events.

 

On November 21, 2018, the Company issued a press release announcing the closing of the Transactions. On November 26, 2018, the Company issued another press release announcing that it changed its name to Smaaash Entertainment Inc. and began trading November 23, 2018 on Nasdaq under the ticker symbol “SMSH.” Copies of the press releases are included as Exhibits 99.3 and 99.4 to this report.

 

Item 9.01. Financial Statement and Exhibits.

 

(a) Financial Statements of Smaaash

 

The historical consolidated financial statements of Smaaash and its subsidiaries as of March 31, 2018 and 2017 and for each of the years ended March 31, 2018 and 2017, together with the notes thereto, included in the Proxy Statement are incorporated by reference into this report.

 

The unaudited financial statements of Smaaash and its subsidiaries as of September 30, 2018 and for the six months ended September 30, 2018 and the related notes to the financial statements are filed as Exhibit 99.1 and incorporated by reference herein.

 

(b) Pro Forma Financial Information

 

The unaudited pro forma income statements for the three months ended August 31, 2018 give effect to the consummation of the Transactions as if it had occurred on August 31, 2018. The unaudited pro forma balance sheet as of August 31, 2018 gives effect to the consummation of the Transactions as if it had occurred on August 31, 2018.

   

The unaudited pro forma financial information is attached to this report as Exhibit 99.2.

 

 

 

(d) Exhibits.

 

Exhibit No.

 

Description of Exhibits

2.1   Share Subscription Agreement, dated May 3, 2018, by and among the Company, Smaaash, and the Smaaash Founders, incorporated by reference to Annex A to the Company’s Definitive Proxy Statement filed with the SEC on September 19, 2018.
2.2   Amendment Cum Addendum to the Share Subscription Agreement Dated May 03, 2018, incorporated by reference to Annex A to the Company’s Definitive Proxy Statement filed with the SEC on September 19, 2018.
2.3   Second Amendment Cum Addendum to the Share Subscription Agreement Dated May 03, 2018, incorporated by reference to Annex A to the Company’s Definitive Proxy Statement filed with the SEC on September 19, 2018.
2.4   Third Amendment Cum Addendum to the Share Subscription Agreement Dated May 03, 2018, incorporated by reference to Annex A to the Company’s Proxy Statement Supplement, which was filed with the SEC on November 5, 2018
2.5   Fourth Amendment Cum Addendum to the Share Subscription Agreement Dated May 03, 2018, dated as of November 1, 2018
3.1   Third Amended and Restated Certificate of Incorporation
10.1   Master Franchise Agreement, dated November 20, 2018, by and between the Company and Smaaash
10.2   Master License and Distribution Agreement, dated November 20, 2018, by and between the Company and Smaaash
10.3   Settlement and Release Agreement, dated November 20, 2018, by and between the Company and Maxim Group LLC
10.4   Demand Secured Promissory Note, dated November 20, 2018, issued to Maxim Group LLC
10.5   Escrow Agreement, dated November 20, 2018, by and among the Company, Ellenoff Grossman and Schole LLP and Shripal Morakhia
10.6   Smaaash Entertainment Inc. 2018 Equity Incentive Plan, incorporated by reference to Annex F to the Company’s Proxy Statement filed with the SEC on September 19, 2018
10.7   Side Letter, dated November 16, 2018, by and between the Company and Chardan
10.8   Letter of Undertaking, dated November 16, 2018, by Smaaash and Smaaash Founders
10.9   Addendum to Master Franchise Agreement, dated November 29, 2018, by and between the Company and Smaaash
99.1   Financial Statements of Smaaash and its subsidiaries as of September 30, 2018 and for the six months ended September 30, 2018
99.2   Unaudited Pro Forma Financial Information
99.3   Press release dated November 21, 2018, issued by the Company
99.4   Press release dated November 26, 2018, issued by the Company

 

 

 

SIGNATURE

 

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.

 

Dated: November 30, 2018

 

  SMAAASH ENTERTAINMENT INC.
     
  By: /s/ F. Jacob Cherian
    Name: F. Jacob Cherian
    Title: Chief Executive Officer

 

 

Exhibit 2.5

 

FOURTH AMENDMENT CUM ADDENDUM TO THE SHARE SUBSCRIPTION AGREEMENT DATED MAY 3, 2018

 

This fourth amendment cum addendum agreement (“ Agreement ”) to the share subscription agreement dated May 3, 2018, as amended, is executed on this 15th day of November, 2018 at New Delhi:

 

By and Amongst

 

I-AM Capital Acquisition Company , a company incorporated in the United States of America and having its registered office at 1345 Avenue of the Americas, 11 th Floor, New York, NY 10105 (hereinafter referred to as the “ Investor ”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns) of the First Part ;

 

And

 

T he Persons listed in SCHEDULE 1 (hereinafter referred to collectively, as the “ Promoters ” and individually, as a “ Promoter ”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include each of their respective heirs, permitted assigns and successors-in-interest, as the case may be) of the Second Part ;

 

And

 

Smaaash Entertainment Private Limited , a private limited company incorporated under the laws of India, having its office at 1 st Floor, Ambience Mall, Plot no. 2, Phase II, Nelson Mandela Marg, Delhi-110070, India (hereinafter referred to as the “ Company ”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns) of the Third Part.

 

The Company, the Investor and the Promoters shall hereinafter be individually referred to as a “ Party ” and collectively referred to as the “ Parties ”.

 

WHEREAS :

 

A. The Parties entered into a share subscription agreement dated May 3, 2018 pursuant to which the Investor has agreed to invest an amount of up to USD 49,000,000 (United States Dollars Forty Nine Million only) into the Company for subscription to Equity Shares in accordance with the terms and conditions set out therein (as previously amended, the “ SSA ”).

 

B.

 

The Parties are entering into this Agreement to further amend the SSA to provide that USD 150,000 (United States Dollars One Hundred Fifty Thousand only) (the “Actual Investment Amount”) delivered to the Company by Investor at the closing of the Business Combination shall purchase Equity Shares equal to 1.1% of the Company in accordance with the terms and conditions set forth in the SSA.

 

C.

The Parties acknowledge that the Promoters have agreed to invest USD 2,000,000 (United States Dollars Two Million only) into the Company as an additional cash contribution and shall receive new Equity Shares of the Company equal to such value.

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements set forth in this Agreement and the SSA, and for other good and valuable consideration, the sufficiency of which is acknowledged by the Parties, the Parties hereby agree as follows: 

 

1. AMENDMENTS TO THE SsA

 

1.1 Notwithstanding anything to the contrary contained in the SSA, the Parties hereby agree that the Company shall issue to Investor, Equity Shares equal to 1.1% of the Company upon delivery by Investor to the Company of the Actual Investment Amount.

 

 

 

2. representations of each party

 

2.1 Each Party severally represents and warrants as follows:

 

  (a) In case of a company, it is a duly registered company and has the power and capacity to execute and deliver this Agreement and to consummate the transactions under this Agreement and all approvals required by it for executing this Agreement and entering into and consummation of the transactions contemplated herein have been obtained.

 

  (b) In case of a company, the execution of this Agreement and entering into and consummation of transactions under this Agreement has been duly authorised and approved by such Party’s board / other appropriate authority and does not require any further authorisation or consent of any other Person.

 

  (c) Upon execution and delivery by such Party, this Agreement will constitute a legal, valid and binding obligation of such Party, enforceable in accordance with its terms.

 

  (d) The execution and delivery of this Agreement by such Party, the transactions contemplated in this Agreement does not contravene the provisions of Applicable Law or provisions of and/or constitute a default under its formation/constitutional documents (where applicable), or any Contract to which such Party is a party or which are applicable to it.

   

3. MISCELLANEOUS

 

3.1 t he Parties may discuss and terminate this Agreement at any time in writing, however no such termination shall be valid unless signed by all Parties hereto.

 

3.2 Any or all provisions of this Agreement may be amended, restated or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of all the Parties.

 

3.3 This Agreement shall be read together with the SSA.

 

3.4 The provisions of Clause 9 ( Confidentiality ), Clause 10 ( Notices ), Clause 11 ( Governing Law ) and Clause 13 ( Miscellaneous ) of the SSA shall mutatis mutandis apply to this Agreement.

 

[ Remainder of the page has been intentionally left blank ]

 

 

 

IN WITNESS WHEREOF , the Parties have entered into and executed this Agreement as of the day and year first above written.

 

SIGNED AND DELIVERED by the within named Investor , I-AM Capital Acquisition Company

     
/s/ Suhel Kanuga   /s/ F. Jacob Cherian
Name: Suhel Kanuga, CFO   Name: F. Jacob Cherian, CEO

 

SIGNED AND DELIVERED by the within named Company , Smaaash Entertainment Private Limited by the hand of Shripal Morakhia, authorised signatory.

   
 /s/ Shripal Morakhia  

 

SIGNED AND DELIVERED by the within named Promoter , AHA Holdings Private Limited by the hand of Shripal Morakhia, authorised signatory.

   
/s/ Shripal Morakhia  

 

SIGNED AND DELIVERED by Mr. Shripal Morakhia

 

/s/ Shripal Morakhia  

 

 

 

SCHEDULE 1

DETAILS OF THE PROMOTERS

 

Sl. No.   Name of the Promoter   Particulars
1.   AHA Holdings Private Limited  

Attention: Mr. Santosh Apraj

Address: 2 nd Floor, Trade View Building, Oasis Complex, PB Marg, Lower Parel, Mumbai – 400013, Maharashtra

Phone number: 022-67400900

Fax no: +91 22 67400988

 

E-mail: santoshapraj@ahaholdings.co.in

         
2.   Shripal Morakhia  

Address: 2 nd Floor, Trade View Building, Oasis Complex, PB Marg, Lower Parel, Mumbai – 400013, Maharashtra

Email: shripal@smaaash.in

 

 

Exhibit 3.1

 

THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
I-AM CAPITAL ACQUISITION COMPANY

 

November 20, 2018

 

I-AM Capital Acquisition Company, a corporation organized and existing under the laws of the State of Delaware (the “ Corporation “), DOES HEREBY CERTIFY AS FOLLOWS:

 

1.         The name of the Corporation is “ I-AM Capital Acquisition Company ”.  The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 17, 2017 (the “ Original Certificate ”). An amended and restated certificate of incorporation was filed with the Secretary of State of the State of Delaware on May 31, 2017 (the “ Amended and Restated Certificate ”).

 

2.         A second amended and restated certificate of incorporation which restated and amended the provisions of the Amended and Restated Certificate was filed with the Secretary of State of the State of Delaware on August 16, 2017 (the “ Second Amended and Restated Certificate ”).

 

3.         This Third Amended and Restated Certificate of Incorporation (the “ Third Amended and Restated Certificate ”), which restates and amends the provisions of the Second Amended and Restated Certificate, was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “ DGCL ”).

 

4.         This Third Amended and Restated Certificate shall become effective on the date of filing with Secretary of State of Delaware.

 

5.         The text of the Second Amended and Restated Certificate is hereby restated and amended in its entirety to read as follows:

 

ARTICLE I
NAME

 

The name of the Corporation is Smaaash Entertainment Inc.

 

ARTICLE II
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE III
REGISTERED AGENT

 

The address of the Corporation’s registered office in the State of Delaware is 1013 Center Road, Suite 403-B, Wilmington, DE 19805 in the County of New Castle. The name of the Corporation’s registered agent at such address is Vcorp Services, LLC.

 

ARTICLE IV
CAPITALIZATION

 

Section 4.1            Authorized Capital Stock .  The total number of shares of all classes of capital stock which the Corporation is authorized to issue is 21,000,000 shares, consisting of (a) 20,000,000 shares of common stock, par value $0.0001 per share (the “ Common Stock ”) and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “ Preferred Stock ”).  

 

 

     

Section 4.2            Preferred Stock .  The Board of Directors of the Corporation (the “ Board ”) is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “ Preferred Stock Designation ”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such resolution or resolutions.

 

Section 4.3            Common Stock.

 

(a)          Voting.

 

(i)         Except as otherwise required by law or this Third Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the shares of Common Stock shall exclusively possess all voting power with respect to the Corporation.

 

(ii)        Except as otherwise required by law or this Third Amended and Restated Certificate (including any Preferred Stock Designation), the holders of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders of the Corporation on which the holders of the shares of Common Stock are entitled to vote.

 

(iii)       Except as otherwise required by law or this Third Amended and Restated Certificate (including any Preferred Stock Designation), at any annual or special meeting of the stockholders of the Corporation, the holders of the shares of Common Stock shall have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders of the Corporation. Notwithstanding the foregoing, except as otherwise required by law or this Third Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the shares of Common Stock shall not be entitled to vote on any amendment to this Third Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Third Amended and Restated Certificate (including any Preferred Stock Designation) or the DGCL.

 

(b)          Dividends.   Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock, the holders of the shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.

 

(c)          Liquidation, Dissolution or Winding Up of the Corporation.   Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the shares of Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them.

 

Section 4.4            Rights and Options .  The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board.  The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof. 

 

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ARTICLE V
BOARD OF DIRECTORS

 

Section 5.1            Board Powers .  The business and affairs of the Corporation shall be managed by, or under the direction of, the Board.  In addition to the powers and authority expressly conferred upon the Board by statute, this Third Amended and Restated Certificate or the Bylaws of the Corporation (“ Bylaws ”), the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Third Amended and Restated Certificate, and any Bylaws adopted by the stockholders of the Corporation; provided, however, that no Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

 

Section 5.2            Number, Election and Term .

 

(a)           The number of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred Stock voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board.

 

(b)           Subject to  Section 5.5 hereof, the Board shall be divided into two classes, as nearly equal in number as possible and designated Class I and Class II.  The Board is authorized to assign members of the Board already in office to Class I or Class II.  The term of the current Class I Directors shall expire at the second annual meeting of the stockholders of the Corporation following the effectiveness of this Third Amended and Restated Certificate and the term of the current Class II Directors shall expire at the first annual meeting of the stockholders of the Corporation following the effectiveness of Third Amended and Restated Certificate.  At each succeeding annual meeting of the stockholders of the Corporation, beginning with the first annual meeting of the stockholders of the Corporation following the effectiveness of this Third Amended and Restated Certificate, each of the successors elected to replace the class of directors whose term expires at that annual meeting shall be elected for a two-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal.  Subject to  Section 5.5 hereof, if the number of directors that constitutes the Board is changed, any increase or decrease shall be apportioned by the Board among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors constituting the Board shorten the term of any incumbent director. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is hereby expressly authorized, by resolution or resolutions thereof, to assign members of the Board already in office to the aforesaid classes at the time this Third Amended and Restated Certificate (and therefore such classification) becomes effective in accordance with the DGCL.

 

(c)           Subject to  Section 5.5  hereof, a director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.

 

(d)           Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot. The holders of shares of Common Stock shall not have cumulative voting rights.

 

Section 5.3            Newly Created Directorships and Vacancies .  Subject to  Section 5.5  hereof, newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office for the remainder of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.  

 

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Section 5.4             Removal .  Subject to Section 5.5 hereof, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

Section 5.5             Preferred Stock -Directors .  Notwithstanding any other provision of this  Article V , and except as otherwise required by law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Third Amended and Restated Certificate (including any Preferred Stock Designation) and such directors shall not be included in any of the classes created pursuant to this  Article V  unless expressly provided by such terms.

 

ARTICLE VI
BYLAWS

 

In furtherance and not in limitation of the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or repeal the Bylaws by the affirmative vote of a majority of the total number of directors present at a regular or special meeting of the Board at which there is a quorum or by unanimous written consent. The Bylaws also may be adopted, amended, altered or repealed by the stockholders of the Corporation; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Third Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders of the Corporation to adopt, amend, alter or repeal the Bylaws; and provided further, however, that no Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

 

ARTICLE VII
SPECIAL MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT

 

Section 7.1             Special Meetings .  Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders of the Corporation to call a special meeting is hereby specifically denied.  Except as provided in the foregoing sentence, special meetings of stockholders of the Corporation may not be called by another person or persons.

 

Section 7.2             Advance Notice .  Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

 

Section 7.3             Action by Written Consent .  Except as may be otherwise provided for or fixed pursuant to this Third Amended and Restated Certificate (including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders of the Corporation. 

 

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ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION

 

Section 8.1             Limitation of Director Liability .  A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless a director violated its duty of loyalty to the Corporation or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from its actions as a director.  Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

 

Section 8.2             Indemnification and Advancement of Expenses .

 

(a)            To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ proceeding ”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “ indemnitee ”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding.  The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this  Section 8.2  or otherwise.  The rights to indemnification and advancement of expenses conferred by this  Section 8.2 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators.  Notwithstanding the foregoing provisions of this  Section 8.2(a) , except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

 

(b)           The rights to indemnification and advancement of expenses conferred on any indemnitee by this  Section 8.2  shall not be exclusive of any other rights that any indemnitee may have or hereafter acquire under law, this Third Amended and Restated Certificate, the Bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.

 

(c)            Any repeal or amendment of this  Section 8.2  by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Third Amended and Restated Certificate inconsistent with this  Section 8.2 , shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

 

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(d)            This  Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than indemnitees.  

 

ARTICLE IX
AMENDMENT OF THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Third Amended and Restated Certificate (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Third Amended and Restated Certificate and the DGCL; and, except as set forth in  Article VIII , all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any other persons by and pursuant to this Third Amended and Restated Certificate in its present form or as hereafter amended are granted subject to the right reserved in this  Article IX .

 

ARTICLE X  

EXCLUSIVE FORUM FOR CERTAIN LAWSUITS

 

Section 10.1           Forum.  Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Third Amended and Restated Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.

 

Section 10.2           Consent to Jurisdiction . If any action the subject matter of which is within the scope of Section 10.1 immediately above is filed in a court other than a court located within the State of Delaware (a “ Foreign Action ”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 10.1 immediately above (an “ FSC Enforcement Action ”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

ARTICLE XI
SEVERABILITY

 

If any provision or provisions (or any part thereof) of this Third Amended and Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any person, entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Third Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Third Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby, and (ii) the provisions of this Third Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Third Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law. 

 

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IN WITNESS WHEREOF, I-AM Capital Acquisition Company has caused this Third Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by an authorized officer as of the date first set forth above.

 

  I-AM CAPITAL ACQUISITION COMPANY
     
  By: /s/ F. Jacob Cherian 
  Name:   F. Jacob Cherian
  Title: Chief  Executive Officer

 

[Signature Page to Third Amended and Restated Certificate of Incorporation]

 

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Exhibit 10.1

 

MASTER FRANCHISE AGREEMENT

 

This Master Franchise Agreement (“Agreement”) is made and entered into on the 20 th day of November, 2018 (the “Effective Date”) at Mumbai, by and between Smaaash Entertainment Private Limited, an Indian company, with its address at Trade View, Level 2, Kamala Mills, Lower Parel, Mumbai 400013, India (“Franchisor”) and I-AM Capital Acquisition Company, a company incorporated in the United States of America, with an address at 1345 Avenue of the Americas, 11th floor, New York, 10105 (“Franchisee”).

 

RECITALS

 

A.          WHEREAS, Franchisor operates entertainment centers and gaming arcades throughout India as well as at the Mall of the Americas in Minneapolis Minnesota where Franchisor, through its virtual reality and sports simulation technology and proprietary gamification technologies provides sport and recreational activities/services; and

 

B.          WHEREAS, Franchisee is [•] (add the business of the Franchisee); and

 

C.          WHEREAS, Franchisor desires to appoint Franchisee, and Franchisee desires to be so appointed, to act as Franchisor’s exclusive Franchisee in the territories of North America and South America (“Territory”) in the manner set out in this Agreement, for setting up, managing and operating entertainment centres and gaming arcades involving virtual reality, sports simulation technology and proprietary gamification technologies to provide sport and recreational activities/services to the public (“Smaaash Centres”), upon the terms and subject to the conditions hereinafter provided.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Grant of Franchise

 

1.1           Rights granted to the Franchisee . Subject to Section 1.2, Franchisor hereby grants to Franchisee the exclusive right, (a) to establish and operate Smaaash Centres in the Territory, (b) to sub-license the right to establish and operate Smaaash Centres to third party franchisees in and for the Territory, (c) a license to use the products and other services developed by Franchisor with respect to the Smaaash Centres (including a right to authorise the use of products and services developed by the Franchisor by third party franchisees), in the Territory, and (d) to identify third party franchisees for the Smaaash Centres in the Territory. The rights granted herein include the limited license to use the Trademarks of the Franchisor (the details of which are morefully set out in Exhibit A), as set out in Section 3 of this Agreement, for the purposes of establishing and operating the Smaaash Centres in the Territory. It is clarified that if third party franchisees shall be establishing and operating Smaaash Centres in the manner contemplated under this Agreement, then the Franchisee shall ensure that such third party franchisees complies with all the obligations and duties of the Franchisee, as recorded under this Agreement, and to this extent, Franchisee may enter into relevant agreements with such third party franchisees.

 

1.2          Notwithstanding the right granted to the Franchisee in Section 1.1, the Franchisor and its affiliates shall retain the right on the terms and conditions that the Franchisor may deem fit and without granting any rights therein to the Franchisee, (i) to own, acquire, establish and / or operate, and to a grant a license to third parties to establish and operate Smaaash Centres at any location outside the Territory, and (ii) to own, acquire, establish and / or operate, and to grant a license to third parties to establish and operate, gaming and entertainment centres under other proprietary marks or other systems, whether such centres are the same, similar or different from the Smaaash Centres, at any location within or outside the Territory.

 

1.3          This arrangement has been entered into by the parties on an arms’length basis. All commercials between the parties in relation to the transactions contemplated under this Agreement, if not specifically provided in this Agreement, shall be agreed mutually between the parties.

 

1.4           Additional Considerations

 

(a)           Pricing . Franchisor and Franchisee shall agree upon and decide the locations at which the Smaaash Centres shall be set up within the Territory. The Franchisee shall not be entitled to set up any new Smaaash Centres without consulting with, and obtaining the prior written consent of Smaaash.

 

(b)          The prices of the products and services offered in each of the Smaaash Centres shall be decided mutually among the parties. Any revision to the agreed fees, including any discounts or prizes or other promotional measures shall require the prior written consent from Franchisor.

 

 

 

(c)          Franchisee or the third party franchisee, as the case may be, shall be entitled to receive the revenue generated from each of the Smaaash Centres. If third party franchisees are operating the Smaaash Centres, then the Franchisee shall be entitled to receive, (i) 5% (five percent) of the capital expenditure as agreed among the parties for the particular Smaaash Centre as sign -on fees or upfront advance, and (ii) 5% (five percent) fee or commission of the revenue generated by such third party franchisees from the Smaash Centres on an annual basis.

 

1.5           Operation of Smaaash Centres . Franchisee or third party sub –franchisees shall be under an obligation to set up at least 6 (six) Smaaash Centres during the first Contract Year or any other time period as may be provided by Franchisor. The Smaaash Centres shall be established and operated in the Territory using the assumed trade name ’Smaaash’or any other trade name that the Franchisor may designate. Franchisee shall maintain good customer relations in accordance with prudent and reasonable business practices. Franchisee shall perform its obligations hereunder without using subcontractors, sub-distributors, independent sales representatives, agents, Franchisee’s affiliates or other non-employees (“Third Parties”) to perform the obligations of Franchisee under this Agreement except to the contrary specifically stated in this Agreement or unless they have been approved, in writing, in advance, by Franchisor, such approval not to be unreasonably withheld.

 

2.             Term The term of this Agreement shall commence as of the Effective Date and shall continue until terminated as hereinafter provided (the “Term”). Each calendar year during the Term is sometimes hereinafter referred to as a “Contract Year.”

 

3.             Grant of License in the Trademarks

 

3.1           License . Subject to the terms of this Agreement (including all obligations to first obtain Franchisor’s written approval), Franchisor hereby grants to Franchisee the right to use the Trademarks (the details of which are set out in Exhibit A to this Agreement) (including sub-licensing this right to third party franchisees with the approval of Franchisor), on a royalty-free basis, for the purpose of operating and promoting the Smaaash Centres in the Territory. Franchisee is, in particular entitled to:

 

(a)          offer, market and/or distribute any products and services in connection with the Smaaash Centres under the Trademarks; and

 

 

 

b)           use the Trademarks on business stationery and/or in advertising in connection with the advertising, promotion and distribution of Smaaash Centres in the Territory.

 

3.2           Exclusivity of License . Except as provided in the next sentence, the license granted herein shall be exclusive. “Exclusivity” shall mean that Franchisor shall not grant any further licenses to third parties in the Trademarks for use in connection with Smaaash Centres in the Territory, and the Franchisee shall not enter into any arrangement or agreement with any third parties for establishing or operating any gaming and entertainment centres identical or similar to Smaaash Centres, in the Territory except as otherwise provided in this Agreement; provided, however, that Franchisor may continue to use the Trademarks in the Territory in connection with the operation of Franchisor’s entertainment centers already set up as of the Effective Date in the Territory. The restriction contained in this Agreement shall apply on the parties throughout the Term.

 

3.3           Form of Use . Unless otherwise provided herein or agreed by the parties in writing, Franchisee shall use the Trademarks that are registered in the Territory in their registered form.

 

4.             Compliance with Law Franchisee shall ensure that the Smaaash Centres shall be set up, established, operated, managed, advertised, marketed, promoted, publicized and otherwise exploited, in accordance with all applicable laws and regulations in the Territory, including without limitation, all customs requirements and country of origin regulations.

 

5.             Marketing and Promotional Activities

 

5.1           Best Efforts.

 

(a)          Franchisee shall exercise its best efforts to effectively market, promote, and publicise the Smaaash Centres throughout the Territory. Franchisee shall also be obligated to identify suitable locations to set up the Smaaash Centres. Franchisee shall comply with, and ensure that the third party sub-franchisees comply with the standards prescribed by Franchisor (as provided in the operating manuals which shall be shared by Franchisor with Franchisee) with respect to the services, products and operations of the Smaaash Centres and shall operate the Smaaash Centres in strict conformity with such standards and specifications as Franchisor may from time to time prescribe to Franchisee. Franchisee shall refrain from deviating from such standards and specifications without Franchisor’s prior written consent and from otherwise operating in any manner which reflects adversely on the Trademarks and Smaaash Centres.

 

(b)          Unless otherwise agreed by Franchisor in writing, throughout the Term, Franchisee shall maintain, and shall ensure that the third party sub –franchisees maintain an organizational structure or local management reasonably necessary to adequately support the advertising, marketing and promotion of the Smaaash Centres and the services and products offered by Smaaash Centres throughout the Territory. The third party sub –franchisees shall also be responsible for all employee related compliances as per the relevant applicable laws. Towards this purpose, Franchisee shall appoint a qualified chief operating officer, in consultation with Franchisor, to undertake and manage the obligations of Franchisee as set out in this Agreement. Franchisor shall also be entitled to designate and appoint personnel from its managerial team to assist and train the personnel and staff of the Franchisee or any other third party sub - franchisee in setting up the Smaaash Centres, and further provide technical and design knowledge to the third party sub - franchisees.

 

5.2           Promotional Material and Products . Franchisee shall submit to Franchisor, for Franchisor’s prior written approval, samples of all advertising and promotional materials that Franchisee desires to use to promote Smaaash Centres, including without limitation, print and online advertising designs, trade show display materials, press releases and interviews for publication in any media (“Promotional Material”). Franchisee shall modify any disapproved Promotional Material to satisfy Franchisor’s reasonable objections so that it is acceptable to Franchisor. Franchisor shall provide Franchisee with the creative elements of any Promotional Materials that Franchisor creates or acquires for use in connection with the advertising and sale of Products outside the Territory.

 

6.             Intellectual Property

 

6.1           Ownership .

 

(a)          Franchisor is the sole owner of any and all intellectual property rights relating to the Smaaash Centres and their products and services existing as of the Effective Date, including, but not limited to, the Trademarks and all the goodwill relating thereto (the “Franchisor Property”). Franchisee, or any third party franchisee, by reason of this Agreement, has not and shall not acquire any right, title, interest or claim of ownership in any of the Franchisor Property in the Territory or elsewhere, except to the extent provided under the license granted under Sections 1 and 3 of this Agreement.

 

 

 

(b)          Franchisee acknowledges that, (i) Franchisor is the sole and exclusive owner of all right, title and interest in any Franchisor Property; (ii) nothing contained in this Agreement shall give to Franchisee any right, title or interest in any Franchisor Property; and (iii) Franchisee’s use of the Franchisor Property, and any associated goodwill, shall inure only to the benefit of Franchisor and shall be deemed to be solely the property of Franchisor should this Agreement be terminated for any reason.

 

6.2           Registration and Cooperation . Franchisee shall not, directly or indirectly, seek or obtain any new registration for Franchisor Property (including without limitation, any colorable imitations, translations, or transliterations thereof), anywhere in the world without Franchisor’s prior written consent. If Franchisee has obtained or obtains in the future, in any country, any right, title or interest in any Franchisor Property notwithstanding the previous sentence (including any colorable imitations, translations, or transliterations thereof), Franchisee will be deemed to have so acted as an agent and for the benefit of Franchisor for the limited purpose of obtaining such registrations and assigning them to Franchisor. Franchisee shall execute, for no additional consideration, any and all documents deemed necessary by Franchisor or its attorneys to be necessary to transfer such right, title or interest to Franchisor.

 

6.3           No Challenges. Franchisee shall not do anything or suffer anything to be done which may adversely affect any rights of Franchisor in and to any Franchisor Property, or any registrations thereof or which, directly or indirectly, may reduce or dilute the value or distinctiveness of such Franchisor Property, in particular the Trademarks, or disparage or detract from Franchisor’s reputation. Franchisee shall not challenge, directly or indirectly, Franchisor’s interest in, or the validity of, any Franchisor Property, or any application for registration or trademark registration thereof or any rights of Franchisor therein. The provisions of this Section 6.3 shall survive the termination of this Agreement.

 

7.             Third Party Infringements; Attacks on Use of the Trademarks; Cooperation

 

7.1           Third Party Infringements.

 

(a)           Mutual Information . Each of the parties shall inform the other without undue delay when such party becomes aware of any infringements of any of the Franchisor Property in the Territory.

 

(b)           Initiation of Action . Any actions against infringers of any of the Franchisor Property, whether or not such actions involve litigation (including any actions taken to oppose a third party application to register an infringing trademark or a cancellation action against a third party’s infringing trademark registration), shall be exclusively reserved to Franchisor, unless otherwise agreed by Franchisor in writing. Notwithstanding the foregoing, Franchisor shall be under no obligation to initiate any such action. If requested by Franchisor, Franchisee shall support Franchisor, at Franchisor’s expense, in any such proceedings and, if requested by Franchisor, Franchisee shall promptly provide Franchisor with any relevant documentation in Franchisee’s possession.

 

7.2           Attacks on the Use of the Franchisor Property . Each of the parties shall inform the other if it becomes aware of a claim by a third party that the use of any of any of the Franchisor Property infringes on the rights of such third party. If requested by Franchisor, Franchisee shall support Franchisor, at Franchisor’s expense, in connection with Franchisor’s defense against any such third party claims. Unless otherwise agreed by Franchisor in writing, Franchisor shall take the lead in any defense against a third party action, whether brought against Franchisor and/or Franchisee. The decision whether or not a defense is appropriate shall be in Franchisor’s sole discretion. Franchisee shall not settle any third party claims against it regarding its use of any of the Franchisor Property without the prior written consent of Franchisor.

 

7.3           Indemnity . The Franchisee shall indemnify and hold the Franchisor, its affiliates and their respective agents and employees harmless from all claims, actions, suits, damages, costs and expenses in relation to or arising out of the breach of any representations, warranties, covenants and obligations of the Franchisee as set out in this Agreement. The indemnification rights of the Franchisor shall be without prejudice to, and independent of any other rights and remedies that the Franchisor may have at law or in equity, including the right to seek specific performance, injunctive relief or restitution, none of which rights or remedies shall be affected or diminished thereby. The provisions of this Section 7.3 shall survive the termination of this Agreement.

 

8.             Termination

 

8.1           Termination by Mutual Agreement. This Agreement may be terminated at any time upon the mutual written agreement of the parties.

 

 

 

8.2           Termination by Franchisor with Notice . Franchisor may terminate this Agreement upon thirty (30) days written notice to Franchisee upon the occurrence of any of the following:

 

(a)          Franchisee fails to make any payment required under or in connection with this Agreement;

 

(b)          Franchisee ceases to operate or otherwise abandon the Smaaash Centres without the consent of Franchisor, or otherwise forfeit the right to do or transact business in the Territory;

 

(c)          Franchisee fails to use its best efforts to market and promote Smaaash Centres and the services and products offered by Smaaash Centres within the Territory and such failure is not cured within thirty (30) days of Franchisor’s notification to Franchisee of such failure.

 

8.3           Termination for Cause . This Agreement may be terminated by either party for “Cause” without the need of providing a notice period prior to such termination becoming effective. “Cause” shall exist if circumstances occur which, taking into consideration the substance and purpose of this Agreement, would make it unreasonable for one or both of the parties to continue the contractual relationship and the other party fails to cure the cause (assuming that such cause is susceptible to cure) within thirty (30) days after the date of receipt of a corresponding written notice (“Remedy Notice”). If such cause by its nature is not curable, then no such Remedy Notice is required. Without limiting the generality of the foregoing, a party may terminate this Agreement for “Cause”if:

 

(a)          the other party to this Agreement is in breach of one or more of its material obligations; or

 

(b)         the other party to this Agreement becomes insolvent, generally cannot pay its obligations when due or otherwise suffers a substantial deterioration of its financial situation, or if insolvency/bankruptcy proceedings are initiated against such party or such party initiates any dissolution or liquidation of its business and/or assets.

 

8.4           Effects of Termination .

 

(a)          Upon the termination of this Agreement, any indebtedness of Franchisee to Franchisor shall become immediately due and payable. Franchisee shall immediately cease to operate the Smaaash Centres and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a franchisee of Franchisor. Franchisor shall have the right to suspend the performance of any of their obligations under this Agreement. Franchisor shall have the right to provide the rights and license granted herein to Franchisee to any other third party entity that Franchisor may deem fit.

 

(b)          All benefits which may accrue by reason of the activities of Franchisee hereunder shall be deemed transferred automatically to Franchisor, and all licenses and other rights granted to Franchisee hereunder shall immediately cease. Unless otherwise agreed by Franchisor in writing, Franchisee shall immediately discontinue the advertising and marketing of Smaaash Centres and the products and services offered by Smaaash Centres.

 

(c)          Each of the parties shall continue to maintain in confidence any and all confidential information received from the other party. At Franchisor’s election, Franchisor may purchase from Franchisee any materials used by Franchisee for the advertising, marketing, promotion, publicizing or other exploitation of Smaaash Centres and the products and services offered by the Smaaash Centres, including all Promotional Materials, Franchisor Property, or any other materials which contain any of the Trademarks.

 

(d)          The termination of this Agreement for any reason shall not affect obligations accrued prior to the effective date of such termination of this Agreement or any obligations which, either expressly or from the context of this Agreement, are intended to survive the termination of this Agreement.

 

9.             Notices and Other Communications All reports, approvals, requests, demands, notices and other communications (collectively “Communications”) required or permitted by this Agreement shall be in writing and signed by a duly authorized officer of or such other individual designated in writing by a party. Communications will be duly given if delivered personally, if mailed (by registered mail, return receipt requested) or if delivered by nationally-recognized courier or mail service which requires the addressee to acknowledge, in writing, the receipt thereof, to the party concerned at the following addresses (or at any other address as a party may specify by notice in writing to the other):

     
If to Franchisor: Smaaash Entertainment Private Limited  
  Trade View, Level 2  
  Kamala Mills  
  Lower Parel, Mumbai 400013, India  
  Attention: Mr. Vishwanath Kotian  
   
If to Franchisee: 1345 Avenue of the Americas, 11 th floor
  New York, NY 101015, USA
  Attention: Mr. Suhel Kanuga

 

 

10.            Miscellaneous

 

10.1           Entire Agreement . This Agreement contains the entire understanding and agreement between the parties with respect to its subject matter, supersedes all prior oral or written understandings and agreements relating thereto and may not be modified, discharged or terminated, nor may any of the provisions hereof be waived, orally.

 

10.2           Right to inspect and request information . During the Term, Franchisor shall have the right to conduct audits of Franchisee with respect to the Smaaash Centres, and inspect the Smaaash Centres, after providing a written notice of 5 (five) days. Franchisee shall be under an obligation to provide any information as may be requested by Franchisor with respect to the Smaaash Centres, including the books of accounts and other relevant documents or records maintained in relation to the Smaaash Centres.

 

10.3           Insurance . During the Term, Franchisee shall maintain policies of insurance as may be requested by Franchisor, subject to applicable law, in relation to the Smaaash Centres.

 

10.4           Representations and warranties . Each of the parties represents and warrants to the other party that, (i) the Agreement constitutes a valid, legal and binding obligation of such party and is enforceable against such party in accordance with its terms, (ii) it has the power and authority to execute the Agreement and perform all its terms, and (iii) the execution and performance of this Agreement shall not violate any charter documents of such party, contravene any provisions of law as applicable to such party (including any order, decree, injunction of any competent court) or conflict with the provisions of any material agreement or contract executed by such party. The provisions of this Section 10.4 shall survive the termination of this Agreement.

 

10.5           Governing Law . (a) The parties hereto have expressly agreed that this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed and fully to be performed therein, to the exclusion of any other applicable body of governing law.

 

(b)            Except as hereafter provided, the parties hereby consent to the jurisdiction of the New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York to resolve any dispute arising under this Agreement.

 

(c)            In the event of any litigation or other action arising out of this Agreement, the court shall award to the substantially prevailing party all reasonable costs and expenses including reasonable attorney’s fees.

 

10.6           WAIVER OF JURY. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, WHETHER NOW OR EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THE TRIAL BY JURY COURT, AND THAT ANY PROCEEDINGS WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

10.7           Force Majeure . The parties will not be liable to each other for any failure or delay in performance, other than failure to make timely payments due under this Agreement, if it is because of earthquake, flood, fire, acts of God, civil unrest, terrorism, acts of any governmental authority or any other reason beyond the reasonable control of either or both of the parties (“Force Majeure”). However, either party may terminate this Agreement by and upon notice to the other if the other is unable to perform any of its material obligations for a period of thirty (30) days by reason of a Force Majeure.

 

10.8           No Joint Venture . Nothing herein is intended to constitute the parties as partners or as joint venturers, or either as agent of the other, and neither party may obligate or bind the other.

 

10.9           Headings, Definitions and other particulars . Headings and titles of sections and/or paragraphs are for convenience only. The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The use of “including” in this Agreement shall be construed as illustrative.

 

 

 

10.10           Amendment. This Agreement shall, from the Effective Date, bind the parties to the terms herein and cannot be amended without the consent of the parties. Further, this Agreement cannot be terminated by any party except in accordance with Clause 8 of this Agreement.

 

10.11           Assignment. The Franchisor shall be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Franchisee. The Franchisee shall not be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Franchisor.

 

10.12           Expenses. The Franchisee shall bear all the costs and expenses in relation to the execution of this Agreement and the consummation of all the transactions hereunder.

 

10.13           Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The delivery of signed counterparts by facsimile transmission or electronic mail in “portable document format” (“.pdf”) shall be as effective as signing and delivering the document in person.

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year first above written.

 

  SMAAASH ENTERTAINMENT PRIVATE LIMITED
     
  By: /s/ Shripal Morakhia
     
  Name: Shripal Morakhia
     
  Title:  
     
  I-AM CAPITAL ACQUISITION COMPANY
     
  By: /s/ F. Jacob Cherian
     
  Name: F. Jacob Cherian
     
  Title: Chief Executive Officer

 

(exhibits follow)

 

 

 

Exhibit A

Trademarks

 

Separately annexed

 

 

Exhibit 10.2

 

MASTER LICENSE AND DISTRIBUTION AGREEMENT

 

This Master License and Distribution Agreement (“Agreement”) is made and entered into on the 20 th day of November 2018 (the “Effective Date”) at Mumbai, by and between Smaaash Entertainment Private Limited, an Indian company, with an address at Trade View, Level 2, Kamala Mills, Lower Parel, Mumbai 400013, India (“Licensor”), and I-AM Capital Acquisition Company, a company incorporated in the United States of America, with an address at 1345 Avenue of the Americas, 11th floor, New York, 10105 (“Licensee”).

 

RECITALS

 

A.           WHEREAS, Licensor operates entertainment centers throughout India as well as at the Mall of the Americas in Minneapolis Minnesota where Licensor, through its virtual reality and sports simulation technology, provides specialized equipment and related products so that Licensor’s customers may experience the opportunity to experience various sport and recreational activities through the use of such equipment and products, the details of which are more fully set out in Exhibit A to this Agreement (the “Products”); and

 

B.           WHEREAS, Licensee is [ ] (add the business of the Licensee); and

 

C.           WHEREAS, Licensor desires to appoint Licensee, and Licensee desires to be so appointed, to act as Licensor’s exclusive licensee and distributor of Products in the territories of North America and South America (“Territory”), upon the terms and subject to the conditions hereinafter provided.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Grant of License and Distribution Rights and Grant Limitations

 

1.1           Grant of License and Distribution Rights . Licensor hereby grants to Licensee the exclusive right to purchase Products directly from Licensor and distribute Products in the Territory in the name of the Licensor and on its own account to customers located in the Territory (“Distribution Right”). All the Products sold by Licensor to Licensee shall be further sold to the third party sub-licensees of Licensee.

 

1.2           Additional Considerations

 

(a)           Pricing . Licensee shall be entitled to sell the Products further to any third party franchisees of the Licensee at a minimum of 15% (fifteen percent) margin over and above the price at which the Licensor sold the Products to Licensee. If requested by Licensor, Licensee shall furnish to Licensor a list of prices for Products to Licensee’s customers prior to the date Licensee commences distributing any Product to any third party. Although Licensee is free to establish its wholesale prices for Products in its discretion, Licensee’s wholesale prices for Products shall be maintained at a level which would encourage the development of sales of Products while maintaining the image of Products and the Marks (as hereinafter defined).

 

(b)           Operation of Licensee’s Business . Licensee shall maintain good customer relations in accordance with prudent and reasonable business practices. Licensee shall perform its obligations hereunder without using subcontractors, sub-distributors, independent sales representatives, agents, Licensee’s affiliates or other non-employees (“Third Parties”) to perform the obligations of Licensee under this Agreement unless they have been approved, in writing, in advance, by Licensor, such approval not to be unreasonably withheld.

 

2.             Term The term of this Agreement shall commence as of the Effective Date and shall continue until terminated as hereinafter provided (the “Term”). Each calendar year during the Term is sometimes hereinafter referred to as a “Contract Year.”

 

3.             Purchase of Products

 

3.1           Purchase Price of Products; Risk of Loss . Unless otherwise agreed by the Parties in writing and subject to Section 1.2 (a), Products shall be purchased by Licensee from Licensor at such prices and on such terms as may be agreed by the parties from time to time. Title to and risk of loss of Products purchased by Licensee from Licensor shall pass at the delivery point (on ex-works basis) as specified in the applicable purchase order. Upon sale of the Products, Licensor shall only be responsible for any inherent manufacturing defects in the Products, provided that such manufacturing defect is notified to Licensor at least within a period of 2 (two) months from the date of installation of the Products. Licensor shall also maintain an inventory of the required spare parts for the Products.

 

 

 

3.2           Purchase Orders .

 

(a)          Unless otherwise agreed by the Parties in writing, Licensee shall place with Licensor, Licensee’s orders for Products at regular intervals during each Contract Year sufficiently in advance of Licensor’s order deadlines and scheduled delivery dates.

 

(b)          Licensee shall place its orders for Products upon Licensor through purchase order forms (or purchase order forms acceptable to Licensor), the terms of which shall be applicable thereto except that, if any terms thereof are inconsistent with the terms set forth in this Agreement, the terms set forth herein shall prevail and control. Licensor shall issue its confirmation of such order if Licensor deems such order acceptable, including in such confirmation the anticipated date of delivery and prices of the Products subject to such order.

 

3.3           Payment Terms . Unless otherwise agreed in writing by Licensor, all invoices from Licensor to Licensee are payable, by wire transfer in U.S. Dollars, to such bank account designated by Licensor to Licensee in writing.

 

3.4           Maintenance. Licensor shall be responsible for providing all maintenance services with respect to the Products during the first Contract Year, free of any charges. From the second Contract year, the maintenance services shall be provided by Licensor to Licensee on the basis of an annual maintenance contract entered between the parties for this purpose. In the event of any defects in the products including any manufacturing defects brought by the customer / Licensee beyond the time period mentioned in Section 3.1, then any services provided by Licensor shall be covered under the annual maintenance contract, or the customer or Licensee shall be required to purchase the spare parts from Licensor.

 

4.             Grant of License in the Trademarks

 

4.1           License . Subject to the terms of this Agreement (including all obligations to first obtain Licensor’s written approval), Licensor hereby grants to Licensee the right to use the Trademarks (the details of which are set out in Exhibit B to this Agreement), on a royalty-free basis, for the purpose of promoting the sale of Products in the Territory. Licensee is in particular entitled to:

 

(a)          offer, market and/or distribute Products under the Trademarks; and

 

(b)          use the Trademarks on business stationery and/or in advertising in connection with the advertising, promotion and distribution of Products in the Territory.

 

4.2           Exclusivity of License . Except as provided in the next sentence, the license granted herein shall be exclusive. “Exclusivity” shall mean that Licensor shall not grant any further licenses to third parties in the Trademarks for use in connection with sales of Products in the Territory, and the Licensee shall not enter into any arrangement or agreement with any third parties for the sale of any products (either directly or indirectly) identical or similar to the Products, in the Territory; provided, however, that Licensor may continue to use the Trademarks in the Territory in connection with the operation of Licensor’s entertainment centers and/or at other locations owned by Licensor or third parties.

 

4.3           Form of Use . Unless otherwise provided herein or agreed by the parties in writing, Licensee shall use the Trademarks that are registered in the Territory in their registered form.

 

5.             Compliance with Law Licensee shall ensure that all Products will be offered for sale, sold, manufactured, labeled, packaged, distributed, advertised, marketed, promoted, publicized and otherwise exploited, in accordance with all applicable laws and regulations in the Territory, including without limitation, all customs requirements and country of origin regulations, those laws and regulations relating to health and safety.

 

6.             Marketing and Promotional Activities

 

6.1           Best Efforts.

 

(a)          Licensee shall exercise its best efforts to effectively market, promote, and sell Products throughout the Territory. Licensee shall represent Licensor at IAAPA and any other conferences as may be requested by Licensor.

 

(b)          Unless otherwise agreed by Licensor in writing, throughout the Term, Licensee shall maintain an organizational structure and sales force reasonably necessary to adequately support the advertising, marketing, sales and distribution of Products throughout the Territory. Licensor shall ensure that the services of at least 2 (two) of its employees are provided to Licensee for coordinating and remedying any maintenance claims with respect to the Products.

 

6.2           Promotional Material and Products . Licensee shall submit to Licensor, for Licensor’s prior written approval, samples of all advertising and promotional materials that Licensee desires to use to promote the Products, including without limitation, print and online advertising designs, trade show display materials, press releases and interviews for publication in any media (“Promotional Material”). Licensee shall modify any disapproved Promotional Material to satisfy Licensor’s reasonable objections so that it is acceptable to Licensor. Licensor shall provide Licensee with the creative elements of any Promotional Materials that Licensor creates or acquires for use in connection with the advertising and sale of Products outside the Territory.

 

 

 

7.             Intellectual Property

 

7.1           Ownership .

 

(a)          Licensor is the sole owner of any intellectual property rights relating to the Products existing as of the Effective Date, including, but not limited to, the Trademarks and all the goodwill relating thereto (the “Licensor Property”). Licensee, by reason of this Agreement, has not acquired any right, title, interest or claim of ownership in any of the Licensor Property in the Territory or elsewhere, except to the extent provided under the license granted under Section 4.

 

(b)          Licensee acknowledges that (i) Licensor is the sole and exclusive owner of all right, title and interest in any Licensor Property; (ii) nothing contained in this Agreement shall give to Licensee any right, title or interest in any Licensor Property; and (iii) Licensee’s use of the Licensor Property, and any associated goodwill, shall inure only to the benefit of Licensor and shall be deemed to be solely the property of Licensor should this Agreement be terminated for any reason.

 

7.2           Registration and Cooperation . Licensee shall not, directly or indirectly, seek or obtain any new registration for Licensor Property (including without limitation, any colorable imitations, translations, or transliterations thereof), anywhere in the world without Licensor’s prior written consent. If Licensee has obtained or obtains in the future, in any country, any right, title or interest in any Licensor Property notwithstanding the previous sentence (including any colorable imitations, translations, or transliterations thereof), Licensee will be deemed to have so acted as an agent and for the benefit of Licensor for the limited purpose of obtaining such registrations and assigning them to Licensor. Licensee shall execute, for no additional consideration, any and all documents deemed necessary by Licensor or its attorneys to be necessary to transfer such right, title or interest to Licensor.

 

7.3           No Challenges. Licensee shall not do anything or suffer anything to be done which may adversely affect any rights of Licensor in and to any Licensor Property, or any registrations thereof or which, directly or indirectly, may reduce or dilute the value or distinctiveness of such Licensor Property, in particular the Trademarks, or disparage or detract from Licensor’s reputation. Licensee shall not challenge, directly or indirectly, Licensor’s interest in, or the validity of, any Licensor Property, or any application for registration or trademark registration thereof or any rights of Licensor therein. The provisions of this Section 7.3 shall survive the termination of this Agreement.

 

8.             Third Party Infringements; Attacks on Use of the Marks; Cooperation

 

8.1           Third Party Infringements.

 

(a)           Mutual Information . Each of the parties shall inform the other without undue delay when such party becomes aware of any infringements of any of the Licensor Property in the Territory.

 

(b)           Initiation of Action . Any actions against infringers of any of the Licensor Property, whether or not such actions involve litigation (including any actions taken to oppose a third party application to register an infringing trademark or a cancellation action against a third party’s infringing trademark registration), shall be exclusively reserved to Licensor, unless otherwise agreed by Licensor in writing. Notwithstanding the foregoing, Licensor shall be under no obligation to initiate any such action. If requested by Licensor, Licensee shall support Licensor, at Licensor’s expense, in any such proceedings and, if requested by Licensor, Licensee shall promptly provide Licensor with any relevant documentation in Licensee’s possession.

 

8.2           Attacks on the Use of the Licensor Property . Each of the parties shall inform the other if it becomes aware of a claim by a third party that the use of any of any of the Licensor Property infringes on the rights of such third party. If requested by Licensor, Licensee shall support Licensor, at Licensor’s expense, in connection with Licensor’s defense against any such third party claims. Unless otherwise agreed by Licensor in writing, Licensor shall take the lead in any defense against a third party action, whether brought against Licensor and/or Licensee. The decision whether or not a defense is appropriate shall be in Licensor’s sole discretion. Licensee shall not settle any third party claims against it regarding its use of any of the Licensor Property without the prior written consent of Licensor.

 

 

 

8.3           Indemnity . The Licensee shall indemnify and hold the Licensor, its affiliates and their respective agents and employees harmless from all claims, actions, suits, damages, costs and expenses in relation to or arising out of the breach of any representations, warranties, covenants and obligations of the Licensee as set out in this Agreement. The indemnification rights of the Licensor shall be without prejudice to, and independent of any other rights and remedies that the Licensor may have at law or in equity, including the right to seek specific performance, injunctive relief or restitution, none of which rights or remedies shall be affected or diminished thereby. The provisions of this Section 8.3 shall survive the termination of this Agreement.

 

9.             Termination

 

9.1           Termination by Mutual Agreement. This Agreement may be terminated at any time upon the mutual written agreement of the parties.

 

9.2           Termination by Licensor with Notice . Licensor may terminate this Agreement upon thirty (30) days written notice to Licensee upon the occurrence of any of the following:

 

(a)          Licensee fails to make any payment required under or in connection with this Agreement; or

 

(b)          Licensee fails to use its best efforts to market, promote and sell the Products within the Territory and such failure is not cured within thirty (30) days of Licensor’s notification to Licensee of such failure.

 

9.3           Termination by Licensee with Notice. Licensee may terminate this Agreement, for any reason or no reason, upon not less than one hundred twenty (120) days’ notice to Licensor.

 

9.4           Termination for Cause . This Agreement may be terminated by either party for “Cause” without the need of providing a notice period prior to such termination becoming effective. “Cause” shall exist if circumstances occur which, taking into consideration the substance and purpose of this Agreement, would make it unreasonable for one or both of the parties to continue the contractual relationship and the other party fails to cure the cause (assuming that such cause is susceptible to cure) within thirty (30) days after the date of receipt of a corresponding written notice (“Remedy Notice”). If such cause by its nature is not curable, then no such Remedy Notice is required. Without limiting the generality of the foregoing, a party may terminate this Agreement for “Cause” if:

 

(a)          the other party to this Agreement is in breach of one or more of its material obligations; or

 

(b)          the other party to this Agreement becomes insolvent, generally cannot pay its obligations when due or otherwise suffers a substantial deterioration of its financial situation, or if insolvency/bankruptcy proceedings are initiated against such party or such party initiates any dissolution or liquidation of its business and/or assets.

 

9.5           Effects of Termination .

 

(a)          Upon the termination of this Agreement any indebtedness of Licensee to Licensor shall become immediately due and payable. Within ten (10) days after any such termination of this Agreement, Licensee shall furnish to Licensor a full and complete statement setting forth (i) the inventory of Products then on hand, including Licensee’s wholesale price thereof, and (ii) a list of outstanding orders received, accepted and approved by Licensee at the time of the termination of this Agreement, including the relevant details of each such order. Licensee shall cease to accept new orders for Products as of the date of termination of this Agreement. Licensee shall consult with Licensor regarding Licensee’s pending orders for Products and Licensor shall determine whether to permit Licensee to continue distribution of Products to fill the pending orders, to direct Licensee to cancel the pending orders, or to assume or have a third party assume the obligation to fill pending orders.

 

(b)          All benefits which may accrue by reason of the activities of Licensee hereunder shall be deemed transferred automatically to Licensor, and all licenses and other rights granted to Licensee hereunder shall immediately cease. Unless otherwise agreed by Licensor in writing, Licensee shall immediately discontinue the advertising and marketing of Products.

 

(c)          Each of the parties shall continue to maintain in confidence any and all confidential information received from the other party. At Licensor’s election, Licensor may purchase from Licensee any materials used by Licensee for the distribution, sale, advertising, marketing, promotion, publicizing or other exploitation of Products, including all Promotional Materials, Licensor Property, or any other materials which contain any of the Trademarks.

 

(d)          Subject to the provisions of subsections (a) and (e) hereof, upon the termination of this Agreement, Licensee shall have a period of one hundred eighty (180) days to sell and ship to its customers, on a non-exclusive basis, current inventory of Products within the Territory to fill pending orders (“Sell-Off Period”). All sales during the Sell-Off Period are expressly subject to all of the terms and conditions contained in this Agreement, including without limitation, prohibitions against selling Products outside of the Territory (or to parties who may sell Products outside the Territory). Any Products remaining in Licensee’s inventory at the end of the Sell-Off Period shall be shipped to Licensor or its designee at Licensor’s expense. Licensor shall pay to Licensee Licensee’s landed cost for any such Products then remaining in Licensee’s inventory as of the end of the Sell-Off Period.

 

 

 

(e)           Notwithstanding the provisions of subsection (d) above, Licensor shall have the right to purchase all or part of Licensee’s inventory of Products then remaining upon the termination of this Agreement, at Licensee’s landed cost for any such Products then remaining in Licensee’s inventory, in which case Licensee shall have no Sell-Off Period for such Products.

 

(f)           The termination of this Agreement for any reason shall not affect obligations accrued prior to the effective date of such termination of this Agreement or any obligations which, either expressly or from the context of this Agreement, are intended to survive the termination of this Agreement.

 

10.           Notices and Other Communications All reports, approvals, requests, demands, notices and other communications (collectively “Communications”) required or permitted by this Agreement shall be in writing and signed by a duly authorized officer of or such other individual designated in writing by a party. Communications will be duly given if delivered personally, if mailed (by registered mail, return receipt requested) or if delivered by nationally-recognized courier or mail service which requires the addressee to acknowledge, in writing, the receipt thereof, to the party concerned at the following addresses (or at any other address as a party may specify by notice in writing to the other):

   
If to Licensor: Smaaash Entertainment Private Limited
  Trade View, Level 2
  Kamala Mills
  Lower Parel, Mumbai 400013, India
  Attention: Mr. Vishwanath Kotian
   
If to Licensee: 1345 Avenue of the Americas, 11 th floor
  New York, NY 101015, USA
  Attention: Mr. Suhel Kanuga

 

11.           Miscellaneous

 

11.1           Entire Agreement . This Agreement contains the entire understanding and agreement between the parties with respect to its subject matter, supersedes all prior oral or written understandings and agreements relating thereto and may not be modified, discharged or terminated, nor may any of the provisions hereof be waived, orally.

 

11.2           Representations and warranties . Each of the parties represents and warrants to the other party that, (i) the Agreement constitutes a valid, legal and binding obligation of such party and is enforceable against such party in accordance with its terms, (ii) it has the power and authority to execute the Agreement and perform all its terms, and (iii) the execution and performance of this Agreement shall not violate any charter documents of such party, contravene any provisions of law as applicable to such party (including any order, decree, injunction of any competent court) or conflict with the provisions of any material agreement or contract executed by such party. The provisions of this Section 11.2 shall survive the termination of this Agreement.

 

11.3           Governing Law . (a) The parties hereto have expressly agreed that this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed and fully to be performed therein, to the exclusion of any other applicable body of governing law.

 

(b)            Except as hereafter provided, the parties hereby consent to the jurisdiction of the New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York to resolve any dispute arising under this Agreement.

 

(c)            In the event of any litigation or other action arising out of this Agreement, the court shall award to the substantially prevailing party all reasonable costs and expenses including reasonable attorney’s fees.

 

 

 

11.4            WAIVER OF JURY. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, WHETHER NOW OR EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THE TRIAL BY JURY COURT, AND THAT ANY PROCEEDINGS WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

11.5            Force Majeure . The parties will not be liable to each other for any failure or delay in performance, other than failure to make timely payments due under this Agreement, if it is because of earthquake, flood, fire, acts of God, civil unrest, terrorism, acts of any governmental authority or any other reason beyond the reasonable control of either or both of the parties (“Force Majeure”). However, either party may terminate this Agreement by and upon notice to the other if the other is unable to perform any of its material obligations for a period of thirty (30) days by reason of a Force Majeure.

 

11.6            No Joint Venture . Nothing herein is intended to constitute the parties as partners or as joint ventures, or either as agent of the other, and neither party may obligate or bind the other.

 

11.7            Headings, Definitions and other particulars . Headings and titles of sections and/or paragraphs are for convenience only. The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The use of “including” in this Agreement shall be construed as illustrative.

 

11.8            Amendment. This Agreement shall, from the Effective Date, bind the parties to the terms herein and cannot be amended without the consent of the parties. Further, this Agreement cannot be terminated by any party except in accordance with Clause 9 of this Agreement.

 

11.9            Assignment. The Licensor shall be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Licensee. The Licensee shall not be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Licensor.

 

11.10           Expenses. The Licensee shall bear all the costs and expenses in relation to the execution of this Agreement and the consummation of all the transactions hereunder.

 

11.11           Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The delivery of signed counterparts by facsimile transmission or electronic mail in “portable document format” (“.pdf”) shall be as effective as signing and delivering the document in person.

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year first above written.

     
  SMAAASH ENTERTAINMENT PRIVATE LIMITED
     
  By: /s/ Shripal Morakhia
     
  Name: Shripal Morakhia
     
  Title:  
     
  I-AM CAPITAL ACQUISITION COMPANY
     
  By: /s/ F. Jacob Cherian
     
  Name: F. Jacob Cherian
     
  Title: Chief Executive Officer

 

(exhibits follow)

 

 

 

Exhibit A

 

Products

 

Products shall include the following:

● Finger Coaster

● Super Keeper

● Cricket Lanes

● Walk the Plank

● Human Claw

● Camel ride

● Arcade games

● Any other game as and when finalized and any new games which may be launched.

 

 

 

Exhibit B

 

Trademarks

 

separately annexed

 

 

Exhibit 10.3

 

SETTLEMENT AND RELEASE AGREEMENT

 

This SETTLEMENT AND RELEASE AGREEMENT (this “ Agreement ”) is dated as of November 20, 2018, by and between I-AM Capital Acquisition Company (“ I-AM ” or the “ Company ”) and Maxim Group LLC (“ Maxim ”). I-AM and Maxim are each sometimes referred to herein individually as a “ Party ” and together as the “ Parties .”

 

W I T N E S S E T H

 

WHEREAS , on or around August 16, 2017, the Company and Maxim executed an underwriting agreement pursuant to which Maxim acted as lead managing underwriter in connection with respect to the initial public offering of common stock of the Company (the “ Underwriting Agreement ”); and

 

WHEREAS , pursuant to Section 1.3 of the Underwriting Agreement, the Company owes to Maxim $1,820,000 (USD) upon the consummation of a Business Combination;

 

WHEREAS , disputes have arisen regarding the obligations of the Company to pay compensation to Maxim pursuant to the Underwriting Agreement;

 

WHEREAS , the Parties have agreed to settle all disputes by and between them; and

 

NOW THEREFORE , in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as follows:

 

1.        Capitalized Terms . Capitalized terms used but not defined herein shall have the respective meanings given to them in the Underwriting Agreement.

 

2.        Payment . The Company agrees to make a cash payment to Maxim of $20,000 (USD) directly from the Trust Account upon the consummation of the Business Combination. The date of receipt of the cash payment shall be the “Effective Date.”

 

3.        Senior Secured Note . The Company shall execute a senior secured note in favor of Maxim Partners LLC in the amount of $1,800,000 (USD) in the form attached hereto as Exhibit A (the “ Note ”). The Note shall be executed by the Company as a necessary condition of Maxim’s acceptance and execution of this Agreement.

 

4.        Removal of Restrictive Legend . Within two (2) business days of the execution of this Agreement, the Company shall take all necessary measures to effect the removal of the restrictive legend from the share certificates evidencing Maxim Partners LLC’s ownership of 50,000 shares of Company common stock (the “Common Stock”) and Maxim’s ownership of 2,000 shares of Common Stock.

 

5.        Current Report . Within two (2) business days of the execution of this Agreement, the Company shall file with the Commission a Current Report on Form 8-K reflecting the contents of this Agreement.

 

 

 

6.        Release of Maxim . As of the Effective Date, the Company, for itself and any of its direct and indirect affiliates, parent corporations, subsidiaries, subdivisions, successors, predecessors, members, shareholders and assigns (collectively the “ Company Releasors ”), hereby (a) releases, acquits and forever discharges Maxim and each of such its direct and indirect affiliates, parent corporations, subsidiaries, subdivisions, successors, predecessors, members, shareholders, and assigns, and their present and former officers, directors, legal representatives, employees, agents and attorneys, and their heirs, executors, administrators, trustees, successors and assigns (the parties so released, herein each a “ Maxim Releasee ” and collectively, the “ Maxim Releasees ”) of and from any and all causes of actions, claims, suits, liens, losses, damages, judgments, demands, liabilities, rights, obligations, costs, expenses, and attorneys’ fees of every nature, kind and description whatsoever, at law or in equity, whether individual, class or derivative in nature, whether based on federal, state or foreign law or right of action, mature or unmatured, accrued or not accrued, known or unknown, fixed or contingent, which the Company Releasors ever had, now have or hereafter can, shall or may have against any Maxim Releasees by reason of any matter, cause or thing whatsoever arising under, related to or otherwise associated with the Underwriting Agreement or Business Combination (collectively, the “Maxim Released Claims ”) and (b) covenants not to institute, maintain or prosecute any action, claim, suit, complaint, proceeding or cause of action or any kind to enforce any of the Maxim Released Claims. In any litigation arising from or related to an alleged breach of this Section, this Agreement may be pleaded as a defense, counterclaim or crossclaim, and shall be admissible into evidence without any foundation testimony whatsoever. Each Company Releasor expressly covenants and agrees that the release granted by it in this Section 6 shall be binding in all respects upon the Company Releasors and shall inure to the benefit of the successors and assigns of the Maxim Releasees, and agrees that the Maxim Releasees shall have no further liabilities or obligations to Company Releasors under or relating to the Underwriting Agreement or Business Combination. Excluded from the foregoing mutual general releases are any claims for enforcement of this Agreement.

 

7.        Release of the Company . As of the Effective Date, Maxim, for itself and any of its direct and indirect affiliates, parent corporations, subsidiaries, subdivisions, successors, predecessors, members, shareholders and assigns (collectively a “ Maxim Releasors ”), hereby (a) releases, acquits and forever discharges the Company and each of its direct and indirect affiliates, parent corporations, subsidiaries, subdivisions, successors, predecessors, members, shareholders, and assigns, and their present and former officers, directors, legal representatives, employees, agents and attorneys, and their heirs, executors, administrators, trustees, successors and assigns (the parties so released, herein each a “ Company Releasee ” and collectively, the “ Company Releasees ”) of and from any and all causes of actions, claims, suits, liens, losses, damages, judgments, demands, liabilities, rights, obligations, costs, expenses, and attorneys’ fees of every nature, kind and description whatsoever, at law or in equity, whether individual, class or derivative in nature, whether based on federal, state or foreign law or right of action, mature or unmatured, accrued or not accrued, known or unknown, fixed or contingent, which the Releasing Parties ever had, now have or hereafter can, shall or may have against any Released Parties by reason of any matter, cause or thing whatsoever arising under, related to or otherwise associated with the payment obligations set forth in Section 3.32 of the Underwriting Agreement (collectively, the “Company Released Claims ”) and (b) covenants not to institute, maintain or prosecute any action, claim, suit, complaint, proceeding or cause of action or any kind to enforce any of the Company Released Claims. In any litigation arising from or related to an alleged breach of this Section, this Agreement may be pleaded as a defense, counterclaim or crossclaim, and shall be admissible into evidence without any foundation testimony whatsoever. Each Maxim Releasor expressly covenants and agrees that the release granted by it in this Section 7 shall be binding in all respects upon the Maxim Releasors and shall inure to the benefit of the successors and assigns of the Company Releasees, and agrees that the Company Releasees shall have no further liabilities or obligations to Maxim Releasors under Section 3.32 of the Underwriting Agreement. Excluded from the foregoing mutual general releases are any claims for enforcement of this Agreement.

 

 

 

8.          Counterparts . This Agreement may be executed in any number of counterparts and by different Parties hereto on separate counterparts, each of which counterparts, when executed and delivered, shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same Agreement. A facsimile or PDF signature shall be deemed to be an original signature for all purposes.

 

9.          Further Assurances . Each Party hereto agrees that, from time to time, such Party will promptly execute and deliver all such further notices, instruments, consents and documents, and take all such further action, as may be reasonably necessary to effect the agreements of the Parties hereto set forth herein.

 

10.        Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of each Party hereto and its successors and assigns. The Parties acknowledge and agree that the each such Party’s respective Released Parties are intended third party beneficiaries of this Agreement and that each of them may independently enforce the terms of this Agreement just as if they were parties.

 

11.        Interpretation; Entire Agreement . The provisions of this Agreement shall survive the Effective Date. This Agreement sets forth the entire agreement and understanding among the Parties and all prior or contemporaneous agreements, understandings, representations and settlements, oral or written, are merged herein. This Agreement may not be altered or amended except by a written instrument signed by all of the Parties. Any provision of this Agreement is found to be contrary to law or otherwise invalid, void or unenforceable, it shall be deemed omitted but shall not affect the remaining terms of this Agreement, which shall remain in full force and effect.

 

12.        Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any law or principles that would make this choice of law provision invalid. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

 

 

13.        Authorization . Each person whose signature is affixed hereto in a representative capacity represents and warrants that he or she is authorized and empowered to execute this Agreement on behalf of, and to bind, the person or entity on whose behalf his or her signature is affixed.

 

 

 

Intending to be legally bound hereby, the parties executed the foregoing Settlement and Release Agreement this 20th day of November, 2018.

 

  I-AM Capital Acquisition Company
     
  By: /s/ F. Jacob Cherian  
  Name: F. Jacob Cherian
  Title: Chief Executive Officer
     
  Maxim Group LLC
     
  By: /s/ Clifford Teller  
  Name: Clifford Teller
  Title: Executive Managing Director, Investment Banking

 

 

 

EXHIBIT A

 

 

Exhibit 10.4

 

THE ISSUANCE AND SALE OF THE SECURITY REPRESENTED BY THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (i) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM GENERALLY ACCEPTABLE TO THE COMPANY’S LEGAL COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (ii) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

DEMAND SECURED PROMISSORY NOTE

 

$1,800,000 November 20, 2018
  New York, New York

 

FOR VALUE RECEIVED, I-AM Capital Acquisition Company, a Delaware corporation (the “ Maker ), hereby promises to pay to the order of Maxim Group LLC or its assigns (“ Holder ), the principal amount of ONE MILLION, EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000) (the “ Principal ”) and to pay interest (“ Interest ”) on any outstanding Principal at a rate per annum equal to the Interest Rate (as defined below), from the date hereof until the same becomes due and payable, whether upon an Interest Date (as defined below) or otherwise (in each case in accordance with the terms hereof). This demand secured promissory note (this “ Note ”) has been issued in accordance with the terms and conditions of that certain Settlement Agreement, dated as of November 20, 2018, by and between Maker and Holder (the “ Settlement Agreement ”).

 

1.           Payment on Demand . The Principal of this Note, together with any accrued and unpaid Interest and any Late Charges (as defined below) hereunder, shall be due and payable upon demand by Holder at any time, or from time to time, as follows (x) 1/3 of the Principal of this Note together with any accrued and unpaid Interest and any Late Charges hereunder on May 20, 2019, (y) 1/3 of the Principal of this Note together with any accrued and unpaid Interest and any Late Charges hereunder on August 20, 2019 and (z) 1/3 of the Principal of this Note together with any accrued and unpaid Interest and any Late Charges hereunder on November 20, 2019, (each, a “ Demand Eligibility Date ”). All demands for repayment of amounts due and payable on demand hereunder received by the Maker prior to 4:00 P.M. New York city time on a given date from and after the applicable Demand Eligibility Date shall be paid to the Holder on such given date. All demands for repayment received by the Maker on a given date from and after the applicable Demand Eligibility Date shall be paid to the Holder on or prior to the fifth (5 th ) business day after the date of the applicable notice of such demand. Payments shall be credited first to the accrued and unpaid Late Charges, if any, second to accrued and unpaid Interest, if any, and the remainder applied to Principal, in each case, with respect to such portion of this Note subject to such demand for repayment hereunder. Notwithstanding the foregoing, any amount payable hereunder may be satisfied in shares of common stock of the Maker (or securities convertible or exercisable into share of common stock of the Maker, as applicable) (collectively with respect to any given amount hereunder payable upon demand, each an “ Alternate Equity Payment ”), if, and solely if, the Maker and the Holder mutually agree on both (x) the purchase price and, if applicable, the conversion and/or exercise price of each security of the Maker issued in such Alternate Equity Payment and (y) the form of documentation of each security of Maker issued in such Alternate Equity Payment; provided, further, that if the Maker and the Holder are unable to mutually agree on the foregoing, such amounts shall be payable hereunder in cash only.

 

 

 

2.           Interest . Interest on this Note shall commence accruing on the date hereof at the Interest Rate and shall be computed on the basis of a 360-day year and twelve 30-day months, shall compound each calendar month and shall be payable in arrears to the Holder on each of (a) the Demand Eligibility Date and (b) thereafter, on the first business day of each calendar month (each, an “ Interest Date ”) in cash. For purposes of this Note, “ Interest Rate ” means, as applicable, (x) from the date hereof through, and including, May 20, 2019, eight percent (8%) per annum, (y) from, and including, May 21, 2019 through, and including, August 20, 2019, twelve percent (12%) per annum or (z) from and after August 21, 2019 until such time as this Note is no longer outstanding, fifteen percent (15%) per annum; provided, that in each case, if a Payment Default (as defined below) occurs and is continuing, such rate shall be increased to (A) if from the date hereof through, and including, August 20, 2019, fifteen percent (15%) per annum or (B) if from and after August 21, 2019, eighteen percent (18%) per annum.

 

3.           Prepayment . Prepayment by Maker of Principal, together with any accrued and unpaid Interest and any Late Charges, may be made at any time after the date hereof without notice, premium or penalty. Notwithstanding anything herein to the contrary, so long as any amounts remain outstanding hereunder, all cash proceeds (or such lower portion as mutually agreed upon by the Maker and the Holder prior to such Subsequent Offering) received by the Maker on or after the date hereof from any sales of any securities of the Maker after the date hereof (each, a “ Subsequent Offering ”, and each such cash amount, the “ Subsequent Offering Proceeds ” thereof), shall be used to repay this Note (such portion of any given Subsequent Offering Proceeds required to be mandatorily paid to the Holder hereunder, each a “ Subsequent Offering Payment ”). Any Subsequent Offering Payment received by the Maker prior to 4:00 P.M. New York city time on a given date shall be paid to the Holder on such given date. Any Subsequent Offering received by the Maker after 4:00 P.M. New York city time on a given date shall be paid to the Holder on the immediately following business day. The Maker shall deliver written notice of any transactions with respect to the applicable Subsequent Offering three (3) business days prior to the contemplated consummation of such Subsequent Offering.

 

4.           Representations and Warranties of Maker . Maker represents and warrants as follows as of the date hereof: (a) it is duly organized, validly existing and in good standing under the laws of its state of Delaware; (b) the execution, delivery and performance by Maker of this Note are within Maker’s powers, have been duly authorized by all necessary actions, and do not contravene its governing agreements, certificates or other organization documents, and do not contravene any law or any contractual restriction binding on or affecting Maker; (c) no authorization or approval or other action by, and no notice to or filing with any governmental authority or regulatory body is required for the due execution, delivery and performance by Maker of this Note; (d) this Note constitutes the legal, valid and binding obligation of Maker party thereto, enforceable against Maker in accordance with its terms, except to the extent enforceability is limited by bankruptcy, insolvency, fraudulent conveyance, moratorium and other laws for the protection of creditors generally and by general equitable principles; and (e) there is no pending or, to Maker’s knowledge, threatened action or proceeding affecting Maker before any governmental agency or arbitrator with respect to the transactions contemplated by this Note or which may materially adversely affect the property, assets or condition (financial or otherwise) of Maker.

 

 

 

5.           Late Charges . Any amount of Principal, Interest or other amounts due hereunder which is not paid when due (a “ Payment Default ”) shall result in a late charge being incurred and payable by the Maker at the rate of fifteen percent (15%) per annum of such amount from the date such amount was due until the same is paid in full (the “ Late Charges ”).

 

6.           Security .

 

(a)         General . As collateral security for to secure prompt repayment of any and all amounts outstanding hereunder from time to time and to secure prompt performance by the Maker of each of its covenants and duties under this Note, as and when due, Maker hereby pledges and assigns to the Holder a continuing security interest in, all personal property and assets of Maker and its subsidiaries, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description, whether tangible or intangible other than Excluded Assets (as defined below) (collectively, the “ Collateral ”). Such security interest constitutes a valid, first priority security interest in the Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral. Notwithstanding any filings undertaken related to the Holder’s rights under the Delaware Uniform Commercial Code (the “ Code ”), the Holder’s lien on the Collateral shall remain in effect for so long as this Note remains outstanding. For purposes of this Agreement, “ Excluded Assets ” means the assets held in escrow with respect to (x) that certain stock purchase agreement with Polar Asset Management Partners Inc. (“ Polar ”), pursuant to which Polar agreed to sell up to 490,000 shares of the Maker’s common stock to the Maker thirty (30) days after the consummation of the business combination and (y) that certain stock purchase agreement with K2 Principal Fund L.P. (“ K2 ”), pursuant to which K2 agreed to sell up to 220,000 shares of the Maker’s common stock to the Maker thirty (30) days after the consummation of the business combination.

 

(b)         Further Assurances . Maker will, at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that the Holder may reasonably request in order to: (i) perfect and protect the security interest of the Holder created hereby; (ii) enable the Holder to exercise and enforce its rights and remedies hereunder in respect of the Collateral.

 

(c)         Mechanics . To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Holder may deem necessary or advisable to accomplish the purposes of this Note, Maker hereby (i) authorizes the Holder to execute any such agreements, instruments or other documents in Maker’s name and to file such agreements, instruments or other documents in Maker’s name and in any appropriate filing office, (ii) authorizes the Holder at any time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Holder may determine regardless of whether any particular asset of Maker falls within the scope of Article 9 of the Code or whether any particular asset of Maker constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation, whether Maker is an organization, the type of organization and any organizational identification number issued to Maker) and (iii) ratifies such authorization to the extent that the Holder has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof.

 

 

 

(d)         Power of Attorney; License . Maker hereby irrevocably appoints the Holder as its attorney-in-fact and proxy, with full authority in the place and stead of Maker and in the name of Maker or otherwise, from time to time in the Holder’s discretion, to take any action and to execute any instrument which the Holder may deem necessary or advisable to accomplish the purposes of this Note. This power is coupled with an interest and is irrevocable until all of amounts outstanding hereunder have been paid in full. For the purpose of enabling the Holder to exercise rights and remedies hereunder, at such time as the Holder shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, Maker hereby grants to the Holder, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to Maker) to use, assign, license or sublicense any intellectual property now owned or hereafter acquired by Maker, wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.

 

(e)         No Duty . The powers conferred on the Holder hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Holder shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(f)         Remedies Upon Payment Default . If a Payment Default shall have occurred and be continuing, the Holder may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in the Settlement Agreement or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral).

 

7.           Indemnification; Expenses . Maker hereby indemnifies and holds harmless Holder, each of its affiliates and correspondents and each of their respective directors, officers, employees, agents and advisors (each an “ Indemnified Party ”) from and against any and all actions, claims, damages, losses, liabilities, fines, penalties, costs and expenses of any kind (including, without limitation, counsel fees and disbursements in connection with any subpoena, investigative, administrative or judicial proceeding, whether or not the Indemnified Party shall be designated a party thereto) which may be incurred by the Indemnified Party or which may be claimed against the Indemnified Party by any person by reason of or in connection with the execution, delivery or performance of this Note, or action taken or omitted to be taken by Holder under, this Note. Nothing in this paragraph is intended to limit Maker’s obligations contained elsewhere in this Note. Without prejudice to the survival of any other obligation of Maker hereunder, the indemnities and obligations of Maker contained in this paragraph shall survive the payment in full of all obligations hereunder. Maker agrees to pay to the Holder upon demand the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Holder and of any experts and agents, which the Holder may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Note, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of the Holder hereunder, or (iv) the failure by Maker to perform or observe any of the provisions hereof.

 

 

 

8.             Alternate Payment Upon Extended Payment Default . If a Payment Default hereunder remains outstanding for a period of forty-eight (48) hours, at any time thereafter the Holder may, by delivery of a written notice to the Maker (each, an “ Alternate Payment Notice ”), require the Maker to redeem all, or any part, of this Note, including any accrued and unpaid Interest and any Late Charges (as set forth in such Alternate Payment Notice) (such aggregate portion of this Note to be redeemed, each, an “ Alternate Payment Amount ”) at a redemption price equal to 125% of such Alternate Payment Amount as set forth in such Alternate Payment Notice (each, an “ Alternate Payment ”). Upon the consummation of an Alternate Payment, the corresponding Alternate Payment Amount of this Note shall no longer remain outstanding and shall be deemed satisfied in full.

 

9.             Miscellaneous.

 

(a)          All amounts to be paid in cash hereunder shall be paid when due by wire transfer in United States dollars and immediately available funds in accordance with the wire instructions delivered to such party entitled to receive such payment prior to such date.

 

(b)          If any cash payment on this Note shall become due on a Saturday, Sunday or a bank or legal holiday, such payment shall be made on the next succeeding business day.

 

(c)          No course of dealing and no delay on the part of the Holder of this Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon the Holder hereof shall be exclusive of any other right, power or remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.

 

(d)          Maker hereby waives presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note.

 

(e)          If Interest, Late Charges or other amounts payable under this Note is in excess of the maximum permitted by law, the Interest, Late Charges or other amounts chargeable hereunder shall be reduced to the maximum amount permitted by law and any excess over the maximum amount permitted by law shall be credited to the Principal of this Note and applied to the same and not to the payment of Interest, Late Charges or such other amounts, as applicable.

 

 

 

(f)          Maker hereby (i) irrevocably submits to the jurisdiction of any Illinois State or Federal court sitting in Chicago, Illinois in any action or proceeding arising out of or relating to this Note, (ii) waive any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines and (iii) irrevocably agree that all claims in respect of such an action or proceeding may be heard and determined in such Illinois State or Federal court. This Note shall be governed by, and construed in accordance with, the laws of the State of Illinois. Maker HEREBY waiveS any right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Note.

 

(g)          This Note shall be binding upon and inure to the benefit of Maker and Holder and their respective successors, assigns, heirs and legal representations, except that Maker may not assign any rights or obligations hereunder without the prior written consent of Holder. Holder may assign to other affiliated entities all or a portion of its rights under this Note.

 

(h)          Maker acknowledges that the transaction of which this Note is a part is a commercial transaction and hereby waives its right to any notice and hearing as may be allowed by any state or federal law with respect to any prejudgment remedy which any Holder or its successors or assigns may use.

 

(i)          The Holder of this Note may proceed to protect and enforce the rights of such Holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

(j)          If this Note is lost or destroyed, Maker shall, at Holder’s request and upon receipt of a lost note affidavit, in a customary form, from the Holder, execute and return to Holder a replacement promissory note identical to this Note. No replacement of this Note shall result in a novation of Maker’s obligations under this Note. Maker acknowledges the need to act promptly upon its receipt of the documentation evidencing any request by Holder that the Note be replaced pursuant to this paragraph and agrees that Maker will meet the reasonable deadlines of Holder provided that Maker has received the applicable documents at least ten (10) business days prior to such deadline. Furthermore, Maker agrees to reasonably cooperate with Holder to effectuate the obtainment of such title policy endorsements, or new title evidence and other assurances and documents as Holder shall reasonably require.

 

[The remainder of the page is intentionally left blank]

 

 

 

IN WITNESS WHEREOF, this Note has been executed as of the date first written above.

 

  I-AM CAPITAL ACQUISITION COMPANY
   
  By: /s/ F. Jacob Cherian  
    Name: F. Jacob Cherian
    Title: Chief Executive Officer
Agreed and accepted by:  

 

Maxim PARTNERS LLC

 

By: /s/ Clifford A. Teller  
  Name: Clifford A. Teller  
  Title: Executive Managing Director Head of Investment Banking

 

 

Exhibit 10.5

 

ESCROW AGREEMENT

 

This Escrow Agreement (this “ Escrow Agreement ”) is dated as of this 19th day of November, 2018, by and among I-AM Capital Acquisition Company, a Delaware corporation (the “ Company ”), Shripal Morakhia (“ Morakhia ”) and Ellenoff Grossman & Schole LLP, as escrow agent (“ Escrow Agent ”). The Company, Morakhia and the Escrow Agent are sometimes individually referred to as a “ Party ” and collectively as the “ Parties ”.

 

WHEREAS , on May 3, 2018, the Company entered into a share subscription agreement (as amended, the “ Subscription Agreement ”), with Smaaash Entertainment Private Limited, a private limited company incorporated under the laws of India (“ Smaaash ”), Morakhia, and AHA Holdings Private Limited (“ AHA Holdings ”, and together with Morakhia, the “ Smaaash Founders ”), pursuant to which the Company agreed to contribute cash to Smaaash in exchange for newly issued equity shares of Smaaash (the “ Transaction ”);

 

WHEREAS , pursuant to the Subscription Agreement, the Smaaash Founders agreed that within six (6) months following the closing of the Transaction, they shall transfer all of their ownership interest in Smaaash (representing 33.6% of the share capital of Smaaash on a fully diluted basis as of June 22, 2018) (the “ Additional Smaaash Shares ”) to the Company in exchange for newly issued shares of common stock of the Company (the “ New Company Shares ”) in an amount which would enable the Smaaash Founders to retain their 33.6% ownership interest in Smaaash indirectly through their interest in the Company;

 

WHEREAS , the Subscription Agreement further provides that the Company shall issue an aggregate of 2,000,000 shares of its common stock, upon the closing of the Transaction to the Smaaash Founders as an upfront portion of the New Company Shares (the “ Upfront I-AM Shares ”). The Subscription Agreement provides that the Upfront I-AM Shares will be held in escrow and shall be either, (i) if the Additional Smaaash Shares are not transferred in full to the Company within the designated six-month period, cancelled, or (ii) if the Additional Smaaash Shares are transferred in full to the Company within the designated six-month period, released from escrow and the number of Upfront I-AM Shares shall be deducted from the New Company Shares that will be issued to the Smaaash Founders upon the delivery of the Additional Smaaash Shares; and

 

WHEREAS , each of the Company and Morakhia (on behalf of himself and the other Smaaash Founder) have requested that Ellenoff Grossman & Schole LLP act as the escrow agent.

 

NOW THEREFORE , the Parties hereto agree as follows:

 

1. Defined Terms .

 

All terms not otherwise defined herein shall have the meaning ascribed to such terms in the Subscription Agreement.

 

2. Establishment of Escrow; Delivery of the UpFront I-AM Shares .

 

(a)            Each of the Company and Morakhia hereby request, and the Escrow Agent hereby accepts, that the Escrow Agent shall serve as an escrow agent for the Upfront I-AM Shares.

 

(b)            The Company and Morakhia hereby deposit with the Escrow Agent, Stock Certificate No._____, representing the 2,000,000 Upfront I-AM Shares issued in the name of Shripal Morakhia (the “ Escrow Certificate ”), to be held in escrow by Escrow Agent in accordance with the terms hereof. The Escrow Agent hereby acknowledges receipt of the Escrow Certificate.

 

 

 

3.              Release of the Escrow Certificate . The Escrow Certificate shall be released by the Escrow Agent to Morakhia upon Escrow Agent’s receipt of written certification from the Company that it has received from Smaaash all of the Additional Smaaash Shares.

 

4.              Acceptance by the Escrow Agent . The Escrow Agent hereby accepts and agrees to perform its obligations hereunder, provided that:

 

(a)            Escrow Agent may act in reliance upon any signature believed by it to be genuine, and may assume that any person who has been designated by the Company or Morakhia to give any written instructions, notice or receipt, or make any statements in connection with the provisions hereof has been duly authorized to do so. The Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instructions or any signatures on statements or instructions. The names and true signatures of each individual authorized to act singly on behalf of the Company or Morakhia are set forth on Schedule A, which is attached hereto and made a part hereof.

 

(b)            Escrow Agent may act relative hereto in reliance upon advice of counsel in reference to any matter connected herewith. The Escrow Agent shall not be liable for any mistake of fact or error of judgment or law, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.

 

(c)            The Company and Morakhia, jointly and severally, agree to indemnify and hold the Escrow Agent harmless from and against any and all claims, losses, costs, liabilities, damages, suits, demands, judgments or expenses (including but not limited to attorney’s fees) claimed against or incurred by Escrow Agent arising out of or related, directly or indirectly, to this Escrow Agreement.

 

(d)            In the event that an Escrow Agent shall be uncertain as to its duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking any action other than to keep safely the Escrow Certificate until they shall be directed otherwise by a court of competent jurisdiction, or (ii) deliver the Escrow Certificate to a court of competent jurisdiction.

 

(e)            The provisions of this Section 4 shall survive the expiration or termination of this Escrow Agreement.

 

5. Resignation and Termination of the Escrow Agent .

 

The Escrow Agent may resign at any time by giving 30 days’ written notice of such resignation to the Company and Morakhia. Upon providing such notice, the Escrow Agent shall have no further obligation hereunder except to hold the Escrow Certificate which it has received as of the date on which it provided the notice of resignation as depositary. In such event, the resigning Escrow Agent shall not take any action until the Company and Morakhia have designated a banking corporation, trust company, attorney or other person as successor. Upon receipt of such written instructions signed by the Company and Morakhia, the Escrow Agent shall promptly deliver the Escrow Certificate to such successor and shall thereafter have no further obligations hereunder.

 

2

 

 

6.            All notices and other communications hereunder shall be in writing and shall be deemed sufficiently given if delivered: (i) by hand against receipt or sent by prepaid, registered mail or (ii) by email transmission (with confirmation of receipt), or (iii) by overnight courier service, and addressed as follows:

 

To the Company:
 
I-AM Capital Acquisition Company
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attention: F. Jacob Cherian
Email: fjc@i-amcapital.com
 
To Escrow Agent:
 
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Barry I. Grossman, Esq.
Email: bigrossman@egsllp.com
 
To: Morakhia:
 
Shripal Morakhia
2nd Floor, Trade View Building, Oasis Complex,
PB Marg, Lower Parel, Mumbai   400013,
Maharashtra
Email: shripal@smaaash.in
 

or to such other address as any Party may from time to time designate by notice to the other Parties, and any notice or other communication given hereunder shall be effective upon receipt.

 

7.            This Escrow Agreement shall be governed by the laws of the State of New York applicable to contracts made and to be entirely performed within such State and without regard to the conflicts of laws principles thereof.

 

8.            This Escrow Agreement may be executed in one or more counterparts and by facsimile transmission, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. The provisions contained in this Escrow Agreement shall be binding upon and shall inure to the benefit of each Party hereto and its representatives, heirs, successors and assigns. This Escrow Agreement constitutes the entire agreement among the Parties hereto concerning the subject matter hereof. No amendment, change, or variance from this Escrow Agreement shall be binding on any Party unless mutually agreed to by the Parties and executed by their authorized officers or agents in writing.

 

9.            Morakhia acknowledge that: (i) he has been advised that the Escrow Agent serves as counsel to the Company and (ii) each of the Company and Morakhia waives any conflict of interest. Further, Morakhia acknowledges and agrees that the Escrow Agent is serving as Escrow Agent as an accommodation to him and at this request and he has been advised to obtain this own counsel in connection with this Escrow Agreement.

 

3

 

 

Now therefore, intending to be bound, the parties have duly executed this Escrow Agreement as of the date above written.

     
  I-AM CAPITAL ACQUISITION COMPANY
   
  By:  
    Name:
    Title:
   
  ELLENOFF GROSSMAN & SCHOLE LLP
   
  By:  
    Name:
    Title:

  

    /s/ Shripal Morakhia
   
  Shripal Morakhia, individually and on behalf of AHA Holdings Private Limited

 

 

Schedule A

 

The Escrow Agent is authorized to accept instructions signed or believed by the Escrow Agent to be signed by any one of the following on behalf of the Company, Morhakia, or AHA Holdings, as applicable.

 

The Company  
   
Name True Signature
   
F. Jacob Cherian  
   
Suhel Kanuaga  
   
Morakhia or AHA Holdings  
   
Shripal Morakhia  

 

 

Exhibit 10.7

 

I-AM CAPITAL ACQUISITION COMPANY  

1345 Avenue of the Americas, 11th Floor

New York, NY 10105

 

November 16, 2018

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

Re: Issuance of Shares

 

Gentlemen:

 

Reference is made to (i) that certain Engagement Letter (the “ Engagement Letter ”), dated as of October 8, 2018, by and between I-AM Capital Acquisition Company, a Delaware corporation (the “ Company ”) and Chardan Capital Markets, LLC (“ Chardan ”); (ii) that certain Letter Agreement, dated August 16, 2017, by and between the Company, I-AM Capital Partners LLC, the Company’s sponsor (the “ Sponsor ”), and the officers and directors of the Company (the “ Insider Letter ”); and (iii) that certain Registration Rights Agreement, dated August 16, 2017, by and between the Company and the Sponsor (the “ Registration Rights Agreement ”). Capitalized terms used herein without definition shall have the meanings set forth in the Engagement Letter and the Insider Letter.

 

Pursuant to Section 2 of the Engagement Letter, Chardan is entitled to receive, as compensation for its services, an aggregate of 208,000 shares of common stock of the Company (the “ Chardan Shares ”), upon the consummation of the Company’s business combination; provided that the Chardan Shares shall be subject to the same restrictions as the Sponsor’s shares.

 

The Sponsor’s Founder Shares (as defined in the Insider Letter) are subject to the lock-up restrictions in Section 7(a) of the Insider Letter and certain registration rights pursuant to Article II of the Registration Rights Agreement.

 

Chardan and the Company hereby acknowledge and agree as follows:

 

1.           Upon the issuance of the Chardan Shares by the Company to Chardan at the Closing:

 

a.          the Chardan Shares shall be subject to the lock-up restrictions contained in Section 7(a) of the Insider Letter, including the Founder Shares Lock-Up Period, to the same extent as if the Chardan Shares were Founder Shares and Chardan was a party to the Insider Letter; and

 

b.          the Chardan Shares shall be entitled to the same registration rights available to the Founder Shares in Article II of the Registration Rights Agreement, subject to the terms and conditions thereof, each Chardan Share shall be deemed to be a “Registrable Security” for purposes of the Registration Rights Agreement, and Chardan agrees to be bound by the terms and conditions of the Registration Rights Agreement.

 

 

 

2.          This letter agreement (“ Letter Agreement ”) constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof (other than the Engagement Letter, the Insider Letter and the Registration Right Agreement). This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.

 

3.          No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the undersigned and his, her or its respective successors and assigns.

 

4.          This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall be exclusive, and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.

 

5.          Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or email transmission, to the address on the first page hereof, which address may be changed by notice given in accordance with this paragraph.

 

[Signature Page follows]

 

 

 

Please confirm your agreement to the foregoing by signing a copy of this Letter Agreement where indicated below and returning it to the undersigned.

   
  I-AM CAPITAL ACQUISITION COMPANY
   
   
  By: /s/ Suhel Kanuga  
  Name:  Suhel Kanuga
  Title:    Chief Financial Officer

 

Acknowledged and Agreed:  
   
CHARDAN CAPITAL MARKETS, LLC  
   
By: /s/ George Kaufman  
  Name: George Kaufman  
  Title: Managing Director  

 

 

Exhibit 10.8

 

SMAAASH ENTERTAINMENT PRIVATE LIMITED

Kamla Millscompound, Trade View Building, Lower Parel

Mumbai 400013, India

 

Date: November 16, 2018

 

To,

 

I-AM CAPITAL ACQUISITION COMPANY

1345 Avenue of the Americas, 11 th Floor

New York, NY 10105

USA

 

Attn: Director

 

Dear Sirs,

 

Ref: Undertaking in relation to the proposed investment by I-AM Capital Acquisition Company

 

1. We refer to the Share Subscription Agreement dated May 03, 2018 (“ SSA ”) entered into between I-AM Capital Acquisition Company (“ Investor ”), Smaaash Entertainment Private Limited (“ Company ”) and AHA Holdings Private Limited (“ AHA Holdings ”) and Mr. Shripal Morakhia (collectively, the “ Promoters ”) as amended by the following agreements:

 

(a) Amendment cum addendum agreement to the SSA dated June 22, 2018;

(b) Second amendment cum addendum agreement to the SSA dated August _______, 2018;

(c) Third amendment cum addendum agreement to the SSA dated ___________________, 2018;

(d) Fourth amendment cum addendum agreement to the SSA dated November 15, 2018.

 

Collectively, the “ Agreements ”.

 

2. All capitalised terms used but not defined herein shall have the respective meanings assigned to them under the Agreements.

 

3. The Company and the Promoters hereby agree and undertake to issue and allot 300,000 (three hundred thousand) Equity Shares of the Company to the Investor against an investment of USD 150,000 (United States Dollars one hundred and fifty thousand) to be made by the Investor into the Company, promptly upon receiving the investment amount, and in no event later than November 30, 2018.

 

4. Such issuance and allotment of Equity Shares shall take place in accordance with the terms and conditions set out in the Agreements, including but not limited to Clause 3 ( Subscription ), Clause 4 ( Conditions Precedent ), Clause 5.2 ( Closing ), Clause 5.3 ( Consummation of transactions at Closing ), Clause 5.4 (Conditions Subsequent to Closing) of the SSA and subject to compliance with Applicable Law, including but not limited to the provisions of the applicable foreign exchange laws in India.

 

5. Simultaneous with the issue and allotment of 300,000 (three hundred thousand) Equity Shares to the Investor, AHA Holdings shall and the Company shall cause AHA Holdings to transfer 4,000,000 (four million) Equity Shares of the Company to the Investor, for 200,000 shares of the Investor, Company and Investor, subject to compliance with Applicable Law. It is hereby clarified that this transfer of Equity Shares by AHA Holdings to the Investor shall be consummated, on or prior to November 30, 2018.

 

 

 

SMAAASH ENTERTAINMENT PRIVATE LIMITED  

Kamla Millscompound, Trade View Building, Lower Parel

Mumbai 400013, India

 

6. The Company and the Promoters shall be bound to do or cause to be done all such further acts, deeds and things and execute such further documents as may be necessary to allot the Equity Shares to the Investor and to facilitate the transfer of Equity Shares from AHA Holdings to the Investor.

 

7. In the event the Company receives the investment amount but fails to allot the Equity Shares to the Investor on or prior to November 30, 2018, the Company shall promptly return the investment amount to the Investor.

 

8. In case of any conflict between this letter and the Agreements with respect to the number of Equity Shares and investment amount, this letter shall prevail. All other provisions of the Agreements shall remain unchanged and shall continue to be in effect.

 

Sincerely,  
For and on behalf of Smaaash Entertainment Private Limited
   
/s/ Shripal Morakhia  
Authorised Signatory  
   
For and on behalf of AHA Holdings Private Limited
   
/s/ Shripal Morakhia  
   
/s/ Shripal Morakhia  
Mr. Shripal Morakhia  

 

 

Exhibit 10.9

  

Addendum to Master Franchise Agreement

 

This is an Addendum (“ Addendum ”) to the Master Franchise Agreement dated November 20, 2018 executed on November 29, 2018 by and between the following:

 

Smaaash Entertainment Private Limited , company incorporated under the provision of the Companies Act, 1956, having its Registered Office at 2 nd Floor, Trade View Building, Oasis Complex, P.B. Marg, Lower Parel, Mumbai 400013 (hereinafter referred to as “Franchisor/Smaaash India” which expression shall unless be repugnant to its context or meaning thereof shall include its assign) of the First Part;

 

And

 

Smaaash Entertainment Inc., formerly known as I-AM Capital Acquisition Company, a company incorporated in the United States of America, having its office at 1345 Avenue of the Americas, 11 th floor, New York, 10105 (hereinafter referred to as “Franchisee” which expression shall unless be repugnant to its context or meaning thereof shall include its assign) of the Second Part .

 

Smaaash India and the Franchisee shall be individually referred as ‘Party’ and collectively as ‘Parties’ in this Agreement. 

 

WHEREAS: 

 

A. Smaaash India and the Franchisee have entered into a Master Franchise Agreement on November 20, 2018.

 

B. In consideration of the mutual covenants between the Parties, both the Parties have agreed to amend and incorporate few clauses of the Master Franchise Agreement.

 

C. The Parties have agreed to enter into this Addendum on following terms and conditions.

 

NOW, THEREFORE , the Parties agree as follows:

 

1. The defined term “Franchisor” referred to Smaaash Entertainment Private Limited in the Master Franchise Agreement shall stand replaced and now be referred as “Franchisor/Smaaash India”.

 

2. Smaaash India is engaged in the business of running gaming and entertainment centers and operates its business under the brand name “Smaaash” in India and abroad. Smaaash India is the sole owner of the brand “Smaaash”.

 

3. Smaaash India grants exclusive rights to the Franchisee to set up family and entertainment centres under the name – “ Total Sports Centre ” in United States of America in which 51% of the investment shall be borne by the Franchisee and 49% by Smaaash India for each such Centres.

 

4. Smaaash India shall be solely responsible for identifying the locations for setting up, managing and controlling the Total Sports Centres and shall carry out all the fit out requirements for the same. The Franchisee shall not be entitled to set up any new Centres without consulting with, and obtaining the prior written consent from Smaaash India.

 

 

 

 

5. Total Sports Centres can use the brand “Smaaash” so long as Smaaash India is in charge of management control of these centers.

 

6. The Landlord of each location of the Centre shall provide a Tenancy Improvement Allowance (TIA) of $60 per square feet to the Centres.

 

7. The Games and other equipment required to operate Total Sports Centres shall be supplied by the Smaaash India and intimated to the Franchisee. All costs in relation to shipping of the Games and traveling, lodging, boarding for the Smaaash India’s staff in relation to the installation of the Games shall be borne by the respective Centre.

 

8. All the management team for these centers will be appointed by Smaaash India on such terms and conditions as deem fit for Smaaash India.

 

9. Smaaash India will get 3% of the net revenue for each centre, subject to conditions to be confirmed by the parties..

 

10. All other terms and conditions of the Master Franchise Agreement, shall remain unchanged and in force unless contradicting with this Addendum. In case of any contradiction with the clauses of Master Franchise Agreement and this Addendum the clauses of this Addendum shall prevail.

 

IN WITNESS WHEREOF , the parties hereto have duly executed this Agreement the day and year first above written.  

 

  SMAAASH ENTERTAINMENT PRIVATE LIMITED
     
  By:  /s/ Shripal Morakhia
     
  Name:    Shripal Morakhia
     
  Title:    
     
  I-AM CAPITAL ACQUISITION COMPANY
     
  By:  /s/ F. Jacob Cherian
     
  Name:    /s/ F. Jacob Cherian
     
  Title:    Chief Executive Officer

 

 

 

 

Exhibit 99.1  

 

Smaaash Entertainment Private Limited  

Consolidated statement of financial position at September 30, 2018  

All amounts are in Rs. ’000 unless otherwise stated

 

Particulars Notes As at September 30, 2018 As at March 31, 2018
  Assets        
             
I Non-current assets      
  (a) Property, plant and equipment 6 3,313,187                   3,242,266
  (b) Capital work-in-progress 6 393,261                     182,669
  (c) Goodwill 7 13,604                         13,604
  (d) Other intangible assets 8 442,026                     505,623
  (e) Intangible assets under development 8 84,537                         48,992
  (f) Investments 9 5,785                           6,496
  (g) Other financial assets 10 203,315                     206,192
  (h) Deferred tax assets (net) 11 488,766                    488,766
  (i) Non-current tax assets (net) 12 24,499                         18,949
  (j) Other non-current assets 13 226,630                     149,590
  Total non-current assets                     5,195,610                   4,863,144
             
II Current assets      
  (a) Inventories 14                     193,512                     160,594
  (b) Investments 9                         —                         11,012
  (c) Trade receivables 15                     162,896                     177,947
  (d) Cash and bank balances 16                     48,131                     119,840
  (e) Loans 17                              2,803                              412
  (f) Other financial assets 10                         108,436                         87,295
  (g) Other current assets 13                     493,724                     408,331
  Total current assets                       1,009,502                     965,430
             
  Total assets                     6,205,111                   5,828,580
             
  Equity and liabilities      
  Capital and reserves      
  (a) Issued capital and share premium 18                   4,039,790                   3,653,881
  (b) Other reserves 19                         50,317                         65,206
  (c) Accumulated deficit 20                 (1,514,292)                 (1,283,496)
  Total equity                     2,575,815                    2,435,593
             
  Liabilities      
I Non-current liabilities      
  (a) Borrowings 21                   1,367,161                   1,360,980
  (b) Other financial liabilities 22                     111,139                     194,270
  (c) Provisions 23                           2,991                           2,327
  (d) Other non-current liabilities 24                           7,772                           8,024
  Total non-current liabilities                     1,489,063                   1,565,601
             
II Current liabilities      
  (a) Borrowings 21                     193,840                     205,535
  (b) Trade payables 25                     266,082                     228,616
  (c) Other financial liabilities 22                   150,936                   1,314,196
  (d) Provisions 23                           8,444                           9,015
  (e) Other current liabilities 24                         162,558                         70,019
  Total current liabilities                     2,140,230                    1,827,381
             
  Total equity and liabilities                     6,205,111                   5,828,580

 

 

 

 

Smaaash Entertainment Private Limited

Consolidated statement of profit and loss and other comprehensive income for six months ended September 30, 2018

All amounts are in Rs. ’000 unless otherwise stated

Particulars Notes For the six months ended September 30, 2018 For the year ended March 31, 2018
I Revenue from operations 26 1,198,063 1,746,459
II Product sales   129,932 378,466
III Other income 27 17,054 18,959
IV Total revenue           1,345,048         2,143,884
V Expenses      
  (a) Cost of material consumed 28  127,019  224,832
  (b) Purchase of stock-in-trade    139,728  304,951
  (c) Change in inventories of stock-in-trade 29    (35,598)    (46,131)
  (d) Employee benefit expense 30  190,995  385,306
  (e) Finance costs 31  192,679  433,184
  (f) Depreciation and amortization expense 6&7  342,843  553,552
  (g) Pre-launch expenses 32      13,202      36,991
  (h) Other expenses 33  539,009  816,983
  Total expenses           1,509,877         2,709,668
VI Loss before exceptional items and tax(IV - V)   (164,829) (565,785)
  Exceptional Items 34      — 26,813
VII Loss before tax   (164,829) (592,598)
VIII Tax expense      
  (1) Current tax 35      —      (2,091)
  (2) Deferred tax 35 (260,723)
  Total tax expense   (262,814)
IX Loss for the period from continuing operations (VII - VIII)   (164,829) (329,784)
X Loss from discontinued operations before tax 36     —    34
XI Tax expense of discontinued operations        —
XII Loss from discontinued operations after tax (X - XI)       —    34
XIII Loss for the period (IX + XII)   (164,829) (329,750)
XIV Other comprehensive income      
  A Items that will not be reclassified subsequently to profit or loss:      
    Remeasurements of the defined benefit plans            239
    Equity instruments through other comprehensive income          717
    Income tax relating to items that will not be reclassified subsequently to profit or loss 35   74 (74)
  B Items that may be reclassified subsequently to profit or loss:      
    Exchange differences on translating foreign subsidiary 19      2,038
  Total other comprehensive income          74    2,920
XV Total comprehensive income for the period (XIII + XIV)   (164,755) (326,830)
XVI Total comprehensive income for the period attributable to:      
    Owners of the Company   (164,755) (326,830)
    Non-controlling interests        —      —

 

See accompanying notes to the consolidated financial statements

 

 

 

 

Smaaash Entertainment Private Limited

Consolidated statement of cash flows for the six months ended September 30, 2018

All amounts are in Rs. ’000 unless otherwise stated 

   Particulars  For the six months ended September 30, 2018  For the year ended March 31, 2018
       
A.  Cash flows from operating activities    
   Consolidated loss for the year    (164,829)  (329,750)
   Adjustments for:      
   Income tax expense recognized in profit or loss (continuing and discontinued operations)  —  (262,814)
   Loss on disposal of property, plant and equipment   2,430   455
   Provision for expected credit loss recognized on trade receivables       (2,275)       —
   Exceptional items       —       26,813
   Bad debts       —       —
   Provision for doubtful advances         —         1,551
   Depreciation and amortization of non-current assets   342,843   553,553
   Depreciation and amortization of non-current assets (Discontinued)         —         7,443
   Finance Charges   192,330   432,542
   Other interest expenses   349   642
   Net gain/(loss) arising on financial assets carried at FVTPL       636       (1,681)
   Net gain/(loss) arising on financial liabilities carried at amortized cost         —         9,028
   Net gain/(loss) arising on financial liabilities carried at amortized cost         —         6,869
   Unwinding of security deposits       (7,465)       (9,056)
   Sundry credit balances written back         —         2,655
   Lease rent adjustment         —         7,487
   Interest Income       (1,071)       (2,456)
   Remeasurements of the defined benefit plans- gains/(losses)   —   239
   Operating profit before working capital changes   362,948   443,520
   Movements in working capital:    
   Increase in trade and other receivables  (107,197)  (427,942)
   (Increase) / decrease in inventories     (32,918)     (90,620)
   (Increase) / decrease in trade receivables  15,050  (152,946)
   Increase / (decrease) in provisions         94         4,411
   Increase / (decrease) in trade payables       37,466       92,472
   Increase / (decrease) in other payables       92,506       (9,083)
   Increase / (decrease) in temporary overdrawn bank balance   173,556   990
   Cash generated from operations  541,504  (139,198)
   Income taxes paid       —       (3,879)
   Net cash generated by/(used in) operating activities  541,504  (143,077)
       
B.  Cash flows from investing activities    
   Net proceeds from investments in mutual funds and others       12,360       19,041
   Interest income         8,535         2,456
   Proceeds from sale of property, plant and equipments and intangibles         (2,430)         9,412
   Purchase of property, plant and equipments and intangibles  (826,405)  (2,182,344)
   Net cash generated by/(used in) investing activities  (807,938)  (2,151,435)
       
C.    Cash flows from financing activities    
   Interest paid  (170,780)  (534,181)
   Repayment of borrowings  (5,514)  (2,336,234)
   Proceeds of borrowings 3,211,081
   Issue of Share Capital   106,409   869,309
   Share premium received (net of share issue expenses) 279,500 1,036,809
   Increase / (decrease) Other reserves       14,890       34,039
   Net cash generated by/(used in) financing activities 194,724 2,280,823
       
   Net increase in cash and cash equivalents (A+B+C)     (71,710)     (13,689)
   Cash and cash equivalents at the beginning of the year   119,841   133,529
       
   Cash and cash equivalents at the end of the year   48,131   119,841
       
   Components of cash and cash equivalents    
   Cash / Cheques on hand         14,810         9,065
   With Banks -  on Current account/Balance in Cash Credit Accounts   33,321   110,775
       
      48,131   119,840
       

 

 

 

 

Smaaash Entertainment Private Limited

Consolidated statement of changes in equity for the six months ended September 30, 2018

All amounts are in Rs. ’000 unless otherwise stated

 

(a) Equity Share Capital    
Particulars Number of shares Equity share capital
     
 As at April 1, 2017 114,849,740 1,148,497
     
 Issue of shares 23,397,500 233,975
 As at March 31, 2018 138,247,240 1,382,472
     
 Issue of shares
 Conversion of optional convertible preference shares into equity shares
 As at September 30, 2018 138,247,240 1,382,472

 

 

(b) Compulsorily convertible preference shares    
Particulars Number of shares Preference share capital
 As at April 1, 2017
     
 Issue of shares
 As at March 31, 2018
     
 Issue of shares 10,640,966 106,410
 As at September 30, 2018 10,640,966 106,410

 

 

 

 

Smaaash Entertainment Private Limited

Consolidated statement of changes in equity for the six months ended September 30, 2018

All amounts are in Rs. ’000 unless otherwise stated

 

  (c) Other Equity

  Share application money pending allotment Reserves & Surplus Other comprehensive income Total
Securities premium reserve Foreign Currency Translation Reserve Contribution from promotors/ shareholders Accumulated deficit Reserve for equity instruments through other comprehensive income
 As at April 1, 2017 32,000 1,402,101 (17,089) 49,578 (1,283,495) 717 (183,811)
               
 Addition during the year 32,000 32,000
 utilized during the year towards share issue expenses (0)
 Created during the year  2,038 2,038
 Total comprehensive income for the year            
 -Loss for the year  (329,750) (329,750)
 -Other comprehensive income net of income tax 165 717 882
 As at March 31, 2018 64,000 1,402,101 (15,051) 49,578 (1,613,079) 1,433 111,018
               
 Addition during the year (32,000) 32,000
 utilized during the year towards share issue expenses (17,596) (17,596)
 Created during the year  17,827 17,827
 Total comprehensive income for the year            
 -Loss for the year  (164,829) (164,829)
 -Other comprehensive income net of income tax 74 74
 As at September 30, 2018 32,000 1,384,504 2,776 49,578 (1,777,834) 1,433 (307,542)

 

 

 

 

Notes to consolidated financial statements for the six months ended September 30, 2018

 

General information

 

Smaaash Entertainment Private Limited (’Smaaash’ or the ‘Company’) was incorporated as a private limited company in India on November 30, 2009. The Company is engaged in the business of operating entertainment centers. Smaaash presents a various range of games that offer a superlative virtual-reality experience and combines the best of sports, music and dining into a highly immersive, interactive, innovative and involved entertainment experience. The Company also involved in the Product sales i.e. sale of in-house developed games with the help of innovative ideas and cutting edge technology.

 

The address of its registered office is 2nd Floor, Trade wing building, Oasis complex, P B Marg, Lower Parel, Mumbai 400 013 and principal place of business is Mumbai, India.

 

Basis of preparation and significant accounting policies

 

1. Basis of preparation

 

The financial statements of the Company, entities controlled by the Company and its subsidiaries (together ‘the Group’) have been prepared in accordance with International Financial Reporting Standards (‘IFRS’).

 

The aforesaid consolidated financial statement have been prepared in Indian Rupee (INR) and denominated in Thousands.

 

1.1 Historical cost convention

 

These consolidated financial statements have been prepared and presented on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

 

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statement is determined on such a basis, except for leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 or value in use in IAS 36.

 

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

 

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

 

1.2 Classification of current/non-current assets and liabilities

 

The consolidated balance sheet presents current and non-current assets, and current and non-current liabilities, as separate classifications. For this purpose, an asset is classified as current if:

 

It is expected to be realized, or is intended to be sold or consumed, in the normal operating cycle; or

It is held primarily for the purpose of trading; or

It is expected to realize the asset within 12 months after the reporting period; or

 

 

 

 

The asset is a cash or equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

All other assets are classified as non-current.

 

Similarly, a liability is classified as current if:

 

It is expected to be settled in the normal operating cycle; or

It is held primarily for the purpose of trading; or

It is due to be settled within 12 months after the reporting period; or

The Group does not have an unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. Terms of a liability that could result in its settlement by the issue of equity instruments at the option of the counterparty does not affect this classification.

 

All other liabilities are classified as non-current.

 

2. Basis of consolidation

 

The consolidated financial statements incorporated the financial statement of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

 

has power over the investee;

is exposed, or has rights, to variable returns from its involvement with the investee; and

has the ability to use its power to affect its returns.

 

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

 

List of entities that are being are been consolidated:

 

Name of Subsidiaries Country of incorporation/ Principal Place of Business Effective percentage of shareholding
As at September 30, 2018 As at March 31, 2018
Smaaash Innovation Private Limited India 100% 100%
Adrenaline Foods Private Limited India 100% 100%
Smaaash Entertainment USA Limited USA 100% 100%