Rooplay OTT System and the Kidoz Network will Reach 50 Million Kids a Month with a Premium Subscription System Offering

ANGUILLA, BWI / ACCESSWIRE / December 28, 2018 / Shoal Games Ltd. (TSXV: SGW) (OTCQB: SGLDF) ("Shoal Games" or the "Company"), mobile software developer, owner of the Rooplay edu-games platform (www.rooplay.com) and publisher of the Rooplay Originals games library, announces that it has entered into an agreement to acquire 100% of the issued and outstanding shares of Kidoz Ltd. ("Kidoz") (www.kidoz.net), a privately held Israeli company. Based in Netaniya, Israel, Kidoz is a fast-growing industry-leader in the global kids' content distribution and monetization market - its platform is preloaded by Lenovo, Acer, PBS Kids and other device manufacturers on millions of kids tablets as their official kid-mode and is embedded in thousands of popular kids apps as their developers' main kid-friendly monetization solution.

The combination of the two companies will marry the global reach of Kidoz's content network with Shoal Games' Rooplay subscription OTT platform, to create a unique player in the high growth digital kids market. With the decline in kids' terrestrial television viewing and their increasing shift to digital media, the combined company will be positioned to grow by owning exclusive content, having access to tens of millions of kids each month, an OTT subscription platform, and a safe monetization platform from top kids advertisers.

Highlights of the Transaction

Industry-leading market position: The combined company will provide a unique Kid Safe platform for digital content distribution and monetization that reaches over 50 million children and parents worldwide every month.

Established digital edu-game product strategy: Combining the companies will significantly enhance the cost-effectiveness and reach of Shoal Games' distribution strategies for its consumer-focused EdTech games platform, Rooplay.

"Rooplay Originals" games library and the Kidoz global product offerings: Shoal Games has an extensive games library of curated COPPA-compliant games that can be commercialized using Kidoz sponsored promotions deals with top kids brands like Hasbro, LEGO, Disney, Viacom, Crayola, and many others.

Distribution of Roolpay over the Kidoz content discovery network: Leveraging Kidoz's distribution capabilities will enable the combined company to bring unique, child safe games to the worldwide market into thousands of popular kids apps that use the Kidoz Network.

Accretive economics on both trailing and forward metrics: Kidoz has recently achieved positive adjusted EBITDA, and its lean operations are highly complementary to Shoal Games operations. In combination with Shoal Games' extensive management track record in video game development and in the public markets, the combined entity looks forward to rapidly increasing combined revenues and improving overall economic performance.

Combined company synergies: The combined company is expected to realize improved management efficiencies, leveraging Shoal Games' cost-effective public company management practices and experience and both companies' combined development knowledge and libraries; the Kidoz worldwide distribution platform; cross-selling and up-selling to customers through a broader content portfolio; integrated operations and controls; and implementation of best practices.

Highly experienced management teams with worldwide focus: Kidoz and Shoal Games have been working together for over a year and determined to enter into the Transaction after recognizing that the synergies available from joining together in today's complex technological environment would provide the combined company with a strong global foothold in the continually expanding kids' digital market.

Transaction summary

The outstanding shares of Kidoz are valued at approximately US$21 million and are to be acquired from the Kidoz shareholders by issuance to them of 52,450,286 common shares of Shoal Games (the "Kidoz Acquisition"). Immediately after the Kidoz Acquisition is closed, Shoal Games will conduct an initial closing of the Concurrent Financing it currently has underway (the "Initial Concurrent Financing Closing"), for gross proceeds of approximately (but not less than) US$2.0 million.

After the Kidoz Acquisition and the Initial Concurrent Financing Closing are closed, the shares to be issued to the Kidoz shareholders will constitute 40% of the issued and outstanding common shares of Shoal Games. None of the Kidoz shareholders will, as a result of the issuance of shares to them in connection with the Kidoz Acquisition, become an insider, affiliate or control person of Shoal Games. The shares to be issued to the Kidoz shareholders: (a) will be issued at a deemed price of US$0.40 per share, reflecting the price at which Shoal Games common shares are currently being offered under the Concurrent Financing; and (b) are being offered and sold pursuant to exemptions to the registration requirements of the United States Securities Act of 1933, as amended (the "1933 Act"), and will not be registered under the 1933 Act.

The Concurrent Financing was announced November 21, 2018. The shares being offered and to be sold thereunder have not been and will not be offered or sold in the United States or to U.S. Persons, are being offered and are to be sold in accordance with the provisions of Regulation S made under the 1933 Act, and will not be registered under the 1933 Act.

The Kidoz Acquisition and the Initial Concurrent Financing Closing are subject to acceptance by the TSX Venture Exchange (the "Exchange"). All of the shares issued to the Kidoz shareholders will be held in escrow for such period as the Exchange may require as a condition of its acceptance of the Kidoz Acquisition. The three major shareholders of Shoal Games have undertaken to the Kidoz shareholders not to sell any of their Shoal Games shares during that escrow period. All of the shares issued pursuant to the Concurrent Financing will be subject to a four-month hold period, as required under the rules and policies of the Exchange and applicable securities legislation. After the Kidoz Acquisition is closed, the Kidoz shareholders will be entitled to have three persons nominated by a shareholding-majority of them appointed to the Shoal Games board of directors.

Subject to approval by the Exchange, a US$130,000 fee will be payable to Kidoz's M&A advisor, Ibis Capital Limited, for services provided in connection with the Kidoz Acquisition (the "Ibis Fee Payment").

The Kidoz Acquisition closing, the Initial Concurrent Financing Closi

(PR-Inside.com)