Glassy Mind Holdings Limited, a Shareholder of Ourgame Expresses Concerns Regarding the Sale of the World Poker Tour Business from AESE (a subsidiary of Ourgame) to Element Partners, LLC

HONG KONG, July 7, 2021 /PRNewswire/ -- Glassy Mind Holdings Limited ("Glassy Mind Holdings") is one of the shareholders of Ourgame International Holdings Limited (the "Company").  Glassy Mind Holdings hold approximately 26.97% of the issued shares of the Company.

Glassy Mind Holdings urges the shareholders of the Company to consider concerns below in connection with the sale of Club Services, Inc. (and, therefore, the WPT Business) held by Allied Esports Entertainment Inc. ("AESE") (a subsidiary of the Company) to Element Partners, LLC ("Sale Transaction"):

The Company did not provide any detailed background information of Element Partners, LLC

As of the date of the letter, the Company has not provided, nor had Glassy Mind Holdings' former board representatives in the Company received, any detailed background information of Element Partners, LLC, or any fund proof hereof.

The Current Management was rushed in closing the Sale Transaction

According to the Overseas Regulatory Announcement dated 2 June 2021, a special meeting of stockholders of AESE was held on 28 June 2021 (the "Special Meeting") to consider and vote on a proposal to approve and adopt the Sale Transaction. However, according to the Notice of Extraordinary General Meeting dated 9 June 2021, the extraordinary general meeting in respect of the Sale Transaction was only held on 30 June 2021 ("6.30 EGM"), which was scheduled 2 days after the Special Meeting (the "Arrangement"). The Arrangement  violates of Rule 14.49 of the Rules Governing the Listings of Securities on the Stock Exchange of Hong Kong Limited (the "Listing Rules"), according to which, the Sale Transaction (which is a very substantial disposal) must be made conditional on approval by shareholders in general meeting of the Company, and no written shareholders' approval of the Company will be accepted in lieu of holding a general meeting. 

Further, the aforesaid violation of the Listing Rules was reported to The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission of Hong Kong and made known to the Current Management. While Glassy Mind Holdings Limited do not speak for the exchange or the regulatory bodies, the breach of the Listing Rules and the Sale Transaction may be subject to the potential regulatory investigations. Nevertheless, the Current Management has never given any reply to Glassy Mind Holdings Limited in this regard.

The Current Management did not response to irregularities

Glassy Mind Holdings' examination of the register of writs and other originating process of the Grand Court of the Cayman Islands on 2 July 2021 reveals that the shares of the Company held by Jian Ying Ourgame High Growth Investment Fund (hold approximately 18.6% of the issued shares of the Company, the "Fund"), have been subject to winding up proceedings in the Cayman Islands and that the Fund undertook to the Court of the Cayman Islands not to vote in respect of any shareholder resolution proposed by the Company in respect of the Sale Transaction (i) before the hearings of the summons for the appointment of joint provisional liquidators and/or the summons for directions of the Court of the Cayman Islands; or (ii) unless any such vote is exercised in accordance within the written directions of the petitioner (together, the "Undertaking to Court");

According to the Poll Results of 6.30 EGM and Glassy Mind Holdings's voting records against the Sale Transaction, Glassy Mind Holdings deduces that the voting rights attached to the shares held by the Fund were exercised in favour of the Sale Transaction. Due to the fact that the voting rights by the Fund was exercised despite of the restrictions set forth in the Undertaking to Court, Glassy Mind Holdings infers that such voting was made in breach of the Undertaking to Court. 

In light of the foregoing, Glassy Mind Holdings casts doubt on the validity of the resolutions approving the Sale Transaction which were passed at 6.30 EGM (the "6.30 Resolutions"), and such validity of the 6.30 Resolutions may be challenged before in the Cayman Islands courts.

Glassy Mind Holdings has promptly alerted the Company and AESE on 1 July 2021 of the above- mentioned irregularity of the 6.30 Resolutions as well as potential litigation risks. However, as of the date of this letter, Mr. LI Yangyang, Mr. Lu Jingsheng and Ms. WU (Claire) Libing, who are part of the Current Management of the Company and concurrently serving AESE as independent directors, failed to protect the interests of the shareholders of the Company by not taking any action or reporting to the shareholders of the Company about the aforesaid circumstances under which the 6.30 Resolutions were passed.

Element Partners, LLC disregarded all risks and still elected to proceed with the Sale Transaction

Element Partners, LLC has been notified by Glassy Mind Holdings  by letter on 1 July 2021 of all risks in connection with the irregularities and/or the potential litigation risks in the Cayman Islands legal proceedings.

Glassy Mind Holding believes if Element Partners, LLC should have had some hesitation and would have ceased or delayed the Sale Transaction until all risks are cleared. To the best of Glassy Mind Holdings's knowledge, Element Partners LLC is minded to close the Sale Transaction as of the date of this letter. 

In light of the circumstances relating to the Sale Transaction as well as the 6.30 Resolutions, Glassy Mind Holdings will have to take all remedial actions (including requesting the Company to convene a shareholders' meeting to remove the Current Management) so that the shareholders of the Company shall pre-empt the risk of dissipation of asset as a result of the Sale Transaction.

Disclaimer: for the avoidance of doubt, this content does not constitute professional advice, whether legal or otherwise, and does not purport to be relied on by any recipient or addressee of this content.

For more information, please visit Glassy Mind Holdings Limited's website:
https://www.glassymindholdings.com/