This is the "deal" that MIG were trying to promote in...

This is the "deal" that MIG were trying to promote in conjunction with TNEN . It never happened but maybe it's a pointer to what is contained in the Amiko proposal that would have us listed on the Zurich Stock Exchange.


A. OBJECTIVE

1. To build a world class, valuable company that may be recognised on the right market / exchange so that our shareholders / investors may yield the right return on their investment.

2. To do so there is (i), the operational strategy and (ii) the capital strategy for the group.

B. BACKGROUND

3. migme is trapped with a deadlocked share register since august last year that's deprived the company of working capital. on one hand, we've had clear operating success as is evidenced by the work we did with MNC, and on the other, the company is not able to accept capital through its australian listing, largely as a function of a conflict around a melbourne institutional group with a convertible note and shareholders from the original shell company that migme backdoor listed in. Any capital that we raise gets lost to those two and doesn't find its way into operations.

4. we're looking at introducing another 'friendly' company (TNEN) as a corporate mechanism to separate the locked capital structure and the operations of the business, and reduce migme ltd (the australian company) to a mere investment company. in the course of this transaction, we're looking at bringing in key partners from the original company into the new company. for example, with MOX, we'll be re-issuing them shares in the new company. we are also looking to do the same with MNCGroup. those relationships are important to the operating business and need to be protected.

5. the medium term plan is to get TNEN to NASDAQ. preliminary institutional interest suggests that a USD$400m to USD$600m valuation may be possible. migme ltd is likely to have a > 25% holding which is the equivalent of AUD$60c or above a share.  

6. Based on 5 above and C below, we believe it may be possible that TNEN may pass Standard 4 (see page 6 of the attached guide) and be eligible to be apply for a quotation on NASDAQ in 6-12 months.

C. OPERATIONAL STRATEGY

7. The group in tends to deliver >= 50m MAUs, 10m DAUs, and over USD$5m in monthly sales in 12 months (subject to business risks, market conditions, etc). That profile puts it in the comparable range to MOMO and many other similar geographically niche platform businesses (MOMO (USD$8bn), Weibo (USD$18bn), LINE (USD$8bn), Meitu (USD$8bn), etc).

8. the MAU footprint we believe may be delivered through platform improvements, media deals, etc. there is ample data to show that building a footprint of that size / engagement is possible.

9. the Sales footprint of a possible USD$5m+ per month in 12 months is likely to be made up of:
(i) mimopay + improvements: USD$1m to $2m per month (currently doing about USD$0.9m a month).
(ii) video streaming: USD$1m to $2m per month (similar businesses may do more in the same timeline)
(iii) other apps / games : USD$1m to $2m per month). initial data from social casinos (bingo, micro lotteries, etc) indicates that this is posible.
(iv) platform (mgime, and to be renamed). of USD$1m per month. ie, working with media and content producers to drive content and create valuable interactions (e.g. gifts + other activities).

D. LISTING STRATEGY

10. Based on the following timetable:

(i) 60-90 days. TNEN to complete the acquisition of mimopay, migme, other assets. and grandfather the strategic relationships into the new group.

(ii) 90 to 180 days. restore operations to the group. focus on quality and consistency of operations. hire / select a board.

(iii) 90 to 180 days. Capital reduction of migme ltd and distribution of restricted shares in specie to migme shareholders.

(iv) 180 to 270 days. bulk up by any 'gap' to the NASDAQ qualifications : assets / market capitalisation test, consolidate the shares to establish a > $4 share price

(v) 210 to 360 days. prepare the NASDAQ / SEC applications.

(vi) 360 days. Mezanine round. move to quote on NASDAQ.

11. other requirements: audit, etc. we believe the group qualifies: audit, compliance, etc.

E. WHAT DOES THIS MEAN FOR INVESTORS?

11. There are three classes of investors that are affected:

(i) TNEN Bridge. The subscription is at an effective USD$10m postmoney valuation. if the group gets to around USD$300m or so, then based on our target capitalisation table, may represent a 30x return on their investment.

(ii) migme Ltd shareholders. based on our current plans, migme Ltd shareholders will have an indirect 25% or so interest in TNEN. if TNEN achieves a USD$300m valuation, then this may represent around 30c or so of value to migmeLtd shareholders. If USD$600m then possibly 60c. (higher if higher, lower if lower, and this is s/t to all the risks around a reconstruction: creditor claims, regulatory risks, etc)

(iii) bridge holders. we have convertible notes in disputation that has, as a combination with other elements of the share register, make the current corporate structure inhospitable to investors. the process described abovecreates a neutral pathway to ensure that those noteholders are settled and the disputation doesn't crush the operations of the company anymore (which obviously it has to date).