OverActive Media Provides Further Details on the Proposed Transactions to Acquire KOI and Movistar Riders

January 8, 2024 (TORONTO, ONTARIO) – OverActive Media Corp. (TSXV: OAM) (“OverActive” or the “Company”) is issuing this press release at the request of the TSX Venture Exchange to provide additional details with respect to the Acquisitions.

On January 4, 2024 OverActive announced that it had entered into a non-binding letter of intent on that day (the “LOI”) ​ with Goatch Global, S.L. (operating as “KOI”) and Team Randomk Esports S.L., (operating as “Movistar Riders”) setting out the terms of the Company’s proposed acquisition of (i) certain assets used in connection with KOI’s esports operations from KOI (the “KOI Assets Acquisition”) and (ii) all of the issued and outstanding shares of Movistar Riders (the “Movistar Riders Shares Acquisition”, and collectively with the KOI Assets Acquisition, the “Acquisitions”). The LOI sets out the terms upon which OverActive, Goatch and Movistar Riders have agreed to proceed with the Acquisitions. The Acquisitions remain subject to OverActive board approval and the execution of the definitive agreements.

Certain Historical Financial Information

As indicated in the Company’s January 4, 2024 press release, the Company expects the Acquisitions to be accretive to adjusted EBITDA and add $10 to $12 million in revenues in 2024. For the year ended December 31, 2022 per their audited financial results, Movistar Riders generated operating income of CAD$237,641.28, with revenues of CAD$8,127,521.64 and expenses of CAD$7,889,880.36, in each case based on the 2022 annual exchange rate for the Canadian Dollar to European Euro of 1.37. As of December 31, 2022 per their audited financial results, Movistar Riders had assets of $4,180,252.13 and total liabilities of $2,672,216.92, using the same exchange rate mentioned above.

The assets that OverActive is acquiring from KOI consist principally of the esports related assets, agreements, licenses, intellectual property, and social media profiles. The upcoming season will be the first season in which the KOI team will operate the acquired assets and therefore these assets do not constitute an existing business in respect of which any historical financial information exists or can be prepared.

Movistar Riders Shares Acquisition

The consideration payable by OverActive for the Movistar Riders Shares Acquisition will consist of up to 30 million common shares of the Company (“Common Shares”), of which 22.5 million Common Shares will be issued at closing (the “Movistar Riders Initial Consideration Shares”) and up to 7.5 half million Common Shares will be issued based on OAM’s EMEA based business achieving certain adjusted EBITDA targets during the period from January 1, 2024 to December 31, 2028.

All of the Movistar Riders Initial Consideration Shares will be subject to a 30-month lock up period during which the holders of the locked-up Movistar Riders Initial Consideration Shares will not be permitted to trade the shares without the Company’s prior consent, subject to certain customary and limited exceptions. A portion of the Movistar Riders Initial Consideration Shares will also be escrowed for three years following completion of the Acquisitions to secure the indemnification obligations of the vendors under the terms of the definitive purchase agreement in respect of the Movistar Riders Shares Acquisition.

The Movistar Riders Shares Acquisition will be subject to a number of conditions, including the negotiation and execution of a definitive purchase agreement, the concurrent completion of the KOI Assets Acquisition, the receipt of all necessary TSXV, board and third-party approvals, and other customary conditions that will be set out in the definitive purchase agreement.

The Movistar Riders Shares Acquisition is an arm’s length transaction and will not result in the creation of a new “Control Person” as defined in the policies of the TSXV.

KOI Assets Acquisition Details

As noted above, the assets to be acquired by the Company pursuant to the KOI Assets Acquisition certain KOI esports assets and brands and licenses, including social media and intellectual property. In addition to acquiring these assets, OverActive will enter into service agreements with top-tier global influencer Ibai Llanos plus former professional footballer and entrepreneur Gerard Piqué pursuant to which Messrs. Llanos and Piqué will undertake a number of online and in person activities to promote OverActive’s esports teams and business (the “Services Agreements”).

The consideration payable by OverActive to KOI under the KOI Assets Acquisition will consist of up to 30 million Common Shares, of which 22.5 million Common Shares will be issued at closing (the “KOI Initial Consideration Shares”) and up to 7.5 half million Common Shares (the “KOI Earn Out Shares”) will be issued based on OverActive’s EMEA based business achieving certain adjusted EBITDA targets during the period from January 1, 2024 to December 31, 2028, provided that in no event will KOI hold more than 19.9% of the outstanding Common Shares after giving effect to its receipt of any of the KOI Initial Consideration Shares or the KOI Earn Out Shares. OverActive will pay Messrs, Llanos and Piqué a cash fee in exchange for their services under the Services Agreements.

A portion of the KOI Initial Consideration Shares issued in connection with the KOI acquisition will be subject to a five year lock up period during which the holders of the locked-up KOI Initial Consideration Shares will not be permitted to trade the shares without the Company’s prior consent, subject to certain customary and limited exceptions. In addition, (i) 20% of the locked-up KOI Initial Consideration Shares will be released from lock-up on each anniversary of closing of the Acquisitions and (ii) the KOI Initial Consideration Shares that remain subject to lock-up may be cancelled for no consideration should there be a breach of certain conditions. A portion of the KOI Initial Consideration Shares will also be escrowed for three years following completion of the Acquisitions to secure the indemnification obligations of KOI under the terms of the definitive purchase agreement in respect of the KOI Asset Acquisition.

The KOI Asset Acquisition will be subject to a number of conditions, including the negotiation and execution of a definitive purchase agreement, the concurrent completion of the Movistar Riders Shares Acquisition, the receipt of all necessary TSXV, board and third-party approvals (including the approval of Riot Games Inc.) and other customary conditions that will be set out in the definitive purchase agreement.

The KOI Asset Acquisition is an arm’s length transaction and will not result in the creation of a new “Control Person” as defined in the policies of the TSXV.

Cautionary Note Regarding Forward-Looking Information

This press release contains statements which constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”), including statements regarding the plans, intentions, beliefs and current expectations of OverActive with respect to the Acquisitions. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding (a) the completion of the Acquisitions , (b) the benefits expected to result from the Acquisitions by the Company, (c) the future performance of Movistar Riders and KOI, including the achievement of certain earn-out targets and their continued expansion and growth, (d) the timing and anticipated receipt of stock exchange approvals, (e) ability of the parties to enter into definitive agreements with respect to the Acquisitions and to satisfy the conditions to the closing of the Acquisitions , and (f) other statements that are not historical facts.

Investors are cautioned that forward-looking statements are not based on historical facts but instead OverActive management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although OverActive believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the OverActive. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the risk that the parties may not enter into definitive agreements with respect to the Acquisitions and that the Acquisitions may not be completed on the terms described herein or at all; the possibility that one or more of the closing conditions to the Acquisitions may not be satisfied; risks associated with the integration of the Acquisitions and the performance of Movistar Riders and KOI following completion of the Acquisitions; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; and risk factors set out in OverActive’s annual information form for the year ended December 31, 2021. These forward-looking statements may be affected by risks and uncertainties in the business of OverActive and general market conditions, including COVID-19.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although OverActive has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. OverActive does not intend, and does not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.

ABOUT OVERACTIVE MEDIA

OverActive Media Corp. (TSXV: OAM) is headquartered in Toronto, Ontario, with operations in Madrid, Spain and Berlin, Germany. OverActive’s mandate is to build an integrated global company delivering sports, media and entertainment products for today’s generation of fans with a focus on esports, videogames, content creation and distribution, culture, and live and online events. OverActive owns team franchises in professional esports leagues, including (i) the Call of Duty League, operating as the Toronto Ultra, and (ii) the League of Legends EMEA Championship, operating as the MAD Lions. OverActive also leads OAM Live, an events arm that produces both live and online events.

ABOUT KOI

KOI is the Barcelona headquartered Esports club founded by Kosmos and Ibai Llanos in December 2021. The club currently has three teams: League of Legends, which competes in the LVP Superliga; VALORANT, which, after a season competing in Spain, now competes in the VALORANT Champions Tour EMEA League; and FIFA.

ABOUT MOVISTAR RIDERS

Movistar Riders is one of the leading eSports clubs in Spain. Its professional players represent the Movistar Riders brand in multiple national and international tournaments, competing in the most popular games such as League of Legends, CS2, or VALORANT; in addition to having the Atlético de Madrid - Movistar team for FIFA.

The club is headquartered at the Movistar eSports Center, in Matadero Madrid, a high-performance center where both players and coaching staff have the most advanced means to develop their activity at the highest level.

For more information, visit the club's official website: https://www.movistarriders.gg/

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.