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VANCOUVER, British Columbia, March 14, 2019 (GLOBE NEWSWIRE) -- Kona Bay Technologies Inc. (“Kona
Bay” or the “Company”) (TSXV: KBY) is pleased to announce that it has entered into a binding letter of
intent dated March 8, 2019 (the “LOI”) with Asia Interactive Services (Hong Kong) Limited
(“PropGo”), whereby Kona Bay is proposing to acquire 100% of PropGo by way of a reverse takeover of Kona Bay by
PropGo (the “Proposed Transaction”), with the resulting company (the “Resulting Issuer”)
operating under the name “PropGo Media Technologies Corp.,” or such other name as may be approved by the board and the TSX Venture
Exchange (the “Exchange”) and carrying on the business of PropGo as currently constituted. In connection
with the Proposed Transaction, the Resulting Issuer will apply to list its common shares on the Exchange as a technology company.
The Proposed Transaction is an arm’s length transaction.
About PropGo
PropGo is a Hong Kong based leading real estate media and software company serving many large and influential
real estate agencies and media companies. PropGo has built a suite of real estate agency enterprise software that allows real
estate agencies to manage their entire business across multiple countries and geographies. These enterprise software solutions
include CRM, data analytics, listing stock management, and media distribution. PropGo counts many global and reputable companies
among its client base including the Financial Times, New York Times China, Nikkei, Christies International Realty, Colliers,
Savills, and Sotheby’s International Realty.
PropGo offers a scalable software platform with proprietary technology (which is developed in-house with no
dependence on any 3rd party platforms). PropGo’s solutions are globally focused and can address multiple languages, countries, and
geographies on a single platform which now include China, Asia, EU, and the US. With a growing audience of over 50,000,000+ monthly
visitors (through PropGo, PropGoLuxury, and media partner sites), the company is able to reach and engage with property consumers
around the world.
PropGo is currently in the process of getting its most recent year-ends audited. For the year ended December 31,
2018 the unaudited statements indicate revenue of HK$13,363,422 and net income of HK$3,832,777 with assets of HK$5,081,728 and
liabilities of HK$707,776.
$1.00 CDN = $5.8 HK$
Transaction Summary
Pursuant to the terms of the LOI, the Proposed Transaction is anticipated to proceed by way of a share exchange,
amalgamation, scheme of arrangement or similar form of business combination whereby the shareholders of PropGo will receive common
shares in the capital of the Resulting Issuer in exchange for their securities of PropGo and shall become the majority shareholders
of the Resulting Issuer. The final form of the transaction is expected to be set forth in a definitive agreement to be
entered into among the parties that will replace and supersede the LOI (the “Definitive Agreement”).
An aggregate of 6,713,968 common shares of Kona Bay are currently issued and outstanding and a further 4,591,269
common shares of Kona Bay are reserved for issuance under outstanding common share purchase warrants. Pursuant to the terms of the
LOI, Kona Bay is expected to undertake a two (2) for one (1) consolidation of its outstanding common shares (the “Share
Consolidation”). As a result, there will be 3,356,984 Kona Bay shares on a post-consolidated basis and 2,295,634 Kona Bay
share purchase warrants outstanding. It is expected that 49,532,377 post-consolidation shares of Kona Bay will be issued to the
shareholders of PropGo to acquire PropGo pursuant to the terms of the Proposed Transaction. In addition, there are currently
4,975,000 PropGo share purchase warrants outstanding that are expected to be exchanged for common share purchase warrants of the
Resulting Issuer upon completion of the Proposed Transaction. In conjunction with the completion of the Proposed Transaction there
is expected to be 52,889,361 shares excluding share issued on the Concurrent Private Placement (as defined below).
Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to,
completion of the Share Consolidation, Exchange approval, and shareholder approval if required pursuant to Exchange or corporate
law requirements. In addition, completion of the Proposed Transaction is subject to certain standard closing conditions,
including the completion of due diligence investigations to the satisfaction of each of Kona Bay and PropGo, execution of the
Definitive Agreement, and there being no material adverse change in the business of Kona Bay or PropGo prior to completion of the
Proposed Transaction.
Concurrent Financing
In connection with the closing of the Proposed Transaction, the Company is expected to carry out a private
placement (the “Concurrent Private Placement”) for aggregate gross proceeds of up to $5,000,000 USD at a price of
$0.40 USD per common share on a post-consolidated basis.
In connection with the Proposed Transaction, it is expected that there will be certain changes to Kona Bay’s
management and its board of directors (further details of such proposed appointments and nominees will be provided as the Proposed
Transaction progresses and when the Definitive Agreement has been entered into). A new board of directors of the Resulting Issuer
shall be nominated by PropGo and current directors and officers of Kona Bay shall resign at or prior to the closing of the Proposed
Transaction.
The Company intends to hold a special meeting of its shareholders with respect to the Proposed Transaction if
required under securities law or Exchange requirements.
Trading of the common shares of the Company has been halted and will remain halted in accordance with Exchange
policies until all required documentation with respect to the Proposed Transaction has been received and the Exchange is otherwise
satisfied that the halt should be lifted.
No advances or deposits from Kona Bay to PropGo are anticipated.
Sponsorship of a Reverse Take Over (“RTO”) is required by the Exchange unless an exemption from the sponsorship
requirement is available. Kona Bay intends to apply for an exemption from sponsorship for this RTO. There is no assurance that an
exemption from this requirement will be obtained.
A press release with further particulars relating to the Proposed Transaction will follow in accordance with the
policies of the Exchange, which will include a summary of the Definitive Agreement and transaction consideration, summary financial
information of PropGo, biographical information on the proposed directors and officers of the Resulting Issuer, and other relevant
information on the Proposed Transaction and related financings.
ON BEHALF OF THE BOARD OF DIRECTORS
“Vincent Wong”
President and Director
Cautionary Statement
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable,
the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction
will be completed as proposed or at all.
This release includes certain statements and information that may constitute forward-looking information
within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical
facts, including statements regarding future estimates, plans, objectives, timing, assumptions or expectations of future
performance including that the Proposed Transaction is anticipated to be by way of share exchange or other similar business
combination, that the Proposed Transaction is expected to complete on the terms and timeline as anticipated by management, that a
Definitive Agreement is expected to be entered into, that Kona Bay is expected to undergo the Share Consolidation on the terms as
expected by management, that PropGo’s common share purchase warrants is expected to be exchanged for Kona Bay post-consolidation
common share purchase warrants, that the Resulting Issuer is expected to complete the Concurrent Private Placement as anticipated
by management and that Kona Bay is expected to undergo a change in management in connection with the Proposed
Transaction. Generally, forward-looking statements and information can be identified by the use of forward-looking
terminology such as “intends,” “anticipates,” “it is expected,” or variations of such words and phrases, or statements that certain
actions, events or results “may,” “could,” “should,” or “would” occur. Forward-looking statements are based on certain material
assumptions and analyses made by the Company and the opinions and estimates of management as of the date of this press release,
including that the Proposed Transaction will be by way of share exchange or other similar business combination, that the Proposed
Transaction will be completed on the terms and timeline as anticipated by management, that a Definitive Agreement will be entered
into, that Kona Bay will undergo the Share Consolidation on terms as expected by management, that PropGo’s common share purchase
warrants will be exchanged for Kona Bay post-consolidation common share purchase warrants, that the Resulting Issuer will complete
the Concurrent Private Placement as anticipated by management and that Kona Bay will undergo a change in management in connection
with the Proposed Transaction. Although the Company considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to
numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied
in such forward-looking statements. Such risk factors may include, among others, that the Proposed Transaction will not
be by way of share exchange or other similar business combination, that the Proposed Transaction will not be completed on the terms
and timeline as anticipated by management, that a Definitive Agreement will not be entered into, that Kona Bay will not undergo the
Share Consolidation on terms as expected by management, that PropGo’s common share purchase warrants will not be exchanged for Kona
Bay post-consolidation common share purchase warrants, that the Resulting Issuer will not complete the Concurrent Private Placement
as anticipated by management and that Kona Bay will not undergo a change in management in connection with the Proposed
Transaction. There can be no assurance that the transactions contemplated in this news release will complete.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially
from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results
not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such
information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement,
forward-looking information or financial outlook that is incorporated by reference herein, except in accordance with applicable
securities laws. We seek safe harbor.
Investors are cautioned that, except as disclosed in the management information circular or filing statement
to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be
accurate or complete and should not be relied upon. Trading in the securities of Kona Bay should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has
neither approved nor disapproved the contents of this press release.
For further information please contact Kona Bay Investor Relations at: Tel: (604) 235-1950 Email: investor.relations@konabaytech.com
