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RTG VENTURES INC FILES (8-K/A) Disclosing Entry into a Material Definitive Agreement, Financial Statements and Exhibits
(Edgar Glimpses Via Acquire Media NewsEdge) Item 1.01 Entry Into a Material Definitive Agreement.
On March 31, 2010, RTG Ventures, Inc., a Florida corporation (the "Company") and
Cloud Channel Limited, which was subsequently re-named as RTG Ventures (Europe)
Limited in July 2010 ("RTG Ventures (Europe)"), a private company registered in
England and Wales with company number 07147702, limited by shares, entered into
and completed a Share Exchange Agreement whereby the Company acquired 100% of
the shares of RTG Ventures (Europe), 10,000 (Ten Thousand) ordinary shares at £
.0001 per share par value.
· On March 31, 2010 RTG Ventures (Europe) entered into a share purchase
agreement with Stylar Limited "Stylar" a private limited company, registered
in England and Wales, company number 07009951, whereby RTGV would acquire 100%
of its shares.
· On March 31, 2010 RTG Ventures (Europe) Limited entered into a share purchase
agreement with Bitemark MC Limited "Bitemark" a private limited company,
registered in England and Wales, company number 4258735, whereby RTGV would
acquire 100% of its shares.
RTG Ventures (Europe) will be allocated Convertible Preferred Shares of RTG
Ventures, Inc. The convertible Preferred Shares will be issued concurrently with
their conversion to common stock 12 months from the September 3, 2010 which is
the effective transaction date.
The business of RTG Ventures (Europe) Ltd was described in form 8 K/A filed on
July 15, 2010. Additional information is now included below.
Item 2.01 Completion of Acquisition
On September 03, 2010 (the "Closing Date"), we completed the share purchase
agreements with Stylar, and Bitemark. The effects of the completion of the
respective transactions will be reported as of the date of issuance of RTG
Ventures, Inc. audited financial statements for the period ended August 31,
2010.
Consideration to Stockholders of RTG Ventures (Europe) Limited
Pursuant to the Share Exchange Agreement, the Registrant acquired 100% of the
outstanding capital stock of RTG Ventures (Europe) Ltd from its stockholders for
consideration consisting of Convertible Preferred Shares of RTG Ventures, Inc.
according to the valuation methodologies outlined in the Share Exchange
Agreements of Bitemark MC Limited and Stylar Limited. RTG Ventures (Europe) Ltd
has been valued 12 months forward using forecasts submitted by them and agreed
by the Company. Based on the results after 12 months, shareholders will be able
to convert the preferred shares into common stock using the average share price
of the 30 days preceding the conversion. At conversion the valuations will be
adjusted up to a maximum of 25% in either direction using performance against
forecast. All preferred stock will be held by the Registrant's transfer agent
for the 12 month period.
Description of Business
Business Overview
RTG Ventures (Europe) Ltd has developed a unique model that enables live music
video rights owners to control and monetize their assets through internet and
mobile internet distribution. RTG Ventures also enables destination site owners
to source top quality media content without the need to negotiate rights for
each media item they stream.
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RTG Ventures, Inc. Corporate Structure
Equity Structure
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Operating Organization
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RTG Ventures is organized as three divisions; Media Systems, Payment Systems and
Software and Services, each of which contains both wholly-owned companies and
joint ventures with independent business plans, strategies and management. In
addition to servicing their discrete markets, these companies all contribute to
RTG Venture's total product offering for media rights owners which enables
rights owners to stream content in any format to any digital video platform with
monetization and rights management rules built in to the network itself.
At the heart of RTG Ventures' total product offering is a Monetization
Application which allows rights owners to define and meta tag media content in
detail, to set and enforce rights management and distribution rules, to receive
payment on distribution and to obtain detailed analytics in real time.
There are four key steps in RTG Ventures' work flow :
· Content Acquisition
· Monetization Application
· Content Delivery Network
· Content Distribution
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RTG Ventures' Total Product Value Chain
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Media Systems Division
The Media Systems division is responsible for development and management of RTG
Ventures' total product offering with support and services provided by the other
two divisions. Specifically, the Media Systems Division tasks are:
· To make and maintain relationships with digital media rights owners;
? To create a marketplace of top quality content with in-built Digital Rights
Management (DRM);
? To produce original content in order to promote and monetize live events;
? To digitize archive content in order to unlock the earning potential of
content libraries.
· To create a single management interface for rights owners:
? To manage distribution of all of their content online;
? To provide the mechanisms for monetizing content on any digital platform;
? To access real time performance analytics in order to optimize distribution
and monetization of their assets;
? To reconcile asset income.
· To make and maintain relationships with portals, niche destination sites and
high traffic web sites of all kinds and on all digital media platforms:
? To deliver rights owners volume;
? To reach consumers who will pay per view;
? To provide site owners with top quality content without the need to negotiate
a license from the rights owner; and
? Where dedicated destination sites for media types do not exist, to form joint
ventures with leaders in those niches in order to attract and monetize
audiences for the rights owners.
Payment Systems
The Payment Systems Division is responsible for development and management of
cutting edge value-exchanging technologies in order to reduce the cost of
electronic payments and extend the reach of RTG Ventures'
technology. Specifically, the Payment Systems Division's tasks are:
· To reduce transaction costs for RTG Ventures' businesses by:
? Vertically integrating payment systems into its products;
? Offering alternatives to the Visa/Mastercard clearing system;
? Utilizing electronic bank-to-bank payments wherever possible;
? Aggregating foreign currency transactions in order to achieve highly
competitive FX rates.
· To extend the reach of RTG Ventures' products by:
? Establishing acceptance and/or integration with EPOS and Ecommerce providers;
? Creating and operating a wireless digital certificate (gift voucher) system
that can be used as sales promotional tools;
? Ensuring its products are compatible with other media companies "paywall"
technologies
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Role of Software & Services
The Software and Services Division is to provide products and services that add
value to the total product offering including but not limited to being an
internal service provided to other RTG Ventures companies. Specifically, the
Software & Services Division's tasks are:
· Provide digital marketing services to RTG Ventures' companies
? Secure top 10 search engine rankings
? Manage social media networks to raise profile of products and services
? Extend RTG Ventures reach into the marketing world to attract leading edge
companies into the business development pipeline
? Be an internal centre of excellence for all matters relating to digital
marketing, branding and e-commerce
· Provide product marketing capabilities to RTG Ventures' companies
? Manage and maintain relationships with product designers, engineers, contract
manufacturers and quality assurance companies
? Provide and manage third party logistics network for distribution of
merchandise and other physical goods
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The Media Market
The worldwide television market in 2009 was worth approximately $355bn
(IDATE). This is broken down by continent as illustrated below. The United
States is the single largest television market, but the importance of the region
is trending downwards going from 39% in 2008 to 38.7% in 2009.
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Over the same period, Europe also decreased by 2.4% compared to 2008. Germany,
UK and France accounted for 44% of total revenue in 2009.
Asia Pacific and Latin America both displayed growth in market share between
2008 and 2009, but the market overall declined by 1.2% showing that the
television industry didn't escape the consequences of global economic downturn.
The explosive emergence of internet video combined with other new delivery
methods for consuming TV output, such as TV anywhere and IPTV, is leading to a
convergence between traditional TV and the Internet. This will gradually
transform the TV media market from a broadcaster-led centralized market to a
consumer-led fragmented market. In every market, distributing content is
becoming increasingly complicated creating an opportunity for new intermediaries
like RTG Ventures. And, while Web TV companies are working to get content onto
television sets, traditional broadcasters are working to get their content onto
the internet. The excerpt below is taken from an iDate Consulting and Research
report published in April 2010 entitled "Global TV 2010 - Markets, Trends, Facts
and Figures (2008-2013)
All the conditions for the TV industry's migration to the Internet are now in
place:
· consumers are comfortable with online visual consumption;
· technical solutions that give users access to Internet content on their
television sets have been implemented;
· open Internet access is possible from mobile telephones;
· premium content is available on the Web;
· online video quality of service is improving;
· new players from industries related to the television industry have aligned
their strategies.
· While this migration will be gradual, it will have a deep-seated impact on the
industry:
· the exclusive rights model will no longer be the standard;
· some consumers will abandon traditional managed networks;
· a globalization trend will be sparked, to the benefit of the major rights
holders.
Unlike the music and print media industries, the TV industry is gaining a strong
position on the Web. As a result, television is poised to play a central role in
video services. This offensive strategy will likely pay off down the line, but
does not entirely eliminate the possibility of destroying value. There are
structural reasons for this, including a fiercely competitive online advertising
market and a lack of control over program circulation.
Far from being simply transitory, the 2009-2010 economic downturn marks the
beginning of a decade of restructuring for the TV industry. This new period will
begin with an overall decline in the sector's resources before increasingly
varied consumption patterns spur a new period of growth. The decade running from
2010 to 2020 will also be a period that focuses on cost control, with the
industrialization of TV production that will depart once and for all from its
historical model, i.e., film.
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Next Gen TV
There are many companies seeking to innovate in TV distribution. IDATE positions
the innovators as displayed below.
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RTG Ventures operates in two areas of this business model. Its monetization
application provides a new kind of tool to media groups who want to control how
their content is consumed on the open Internet. Every category on this chart
could receive content from the application's distribution hub. RTG Ventures will
also deploy a destination site (currently known as Flowcaster).
In a consumer-led, fragmented market, RTG Ventures believes that internet
broadcast models, coupled with rapidly changing consumer consumption patterns
such as via mobile or video-on-demand can both grow new markets and take market
share from traditional companies in the pay-TV segment.
Live Music Online
RTG Ventures defines three key areas in the online live music video market:
· Live performances, live-to-air
· Recorded live performances
· Recorded live studio sessions
In October 2009, U2 broke new ground when it broadcast a concert live from the
Rosebowl straight to the internet. The concert was streamed on YouTube and
attracted 10m viewers from all over the world, breaking previous YouTube
records.
Two companies have also declared an interest in acquiring rights to live music
and streaming content as an aggregator; Hulu.com and Vevo.com.
But, the market for live music online is young, fragmented and there are no
authoritative published analytics of the market. Various companies have
experimented in the market, among them Live Nation who announced in 2008 that it
was going to film concerts at its 150 venues so that fans who couldn't attend
events could still enjoy them.
To understand the market as it exists now for rights owners, one must explore
the options they have for monetizing content.
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As a content owner, the current choices for streaming content are:
· Pay to stream
· Stream for free with advertising support - someone else's revenue
· Sign up to a blanket licensing agreement
· Build a bespoke platform to manage content and distribute using a content
delivery network
RTG Ventures' model offers media owners the opportunity to build their own
distribution network, stream for free and earn revenue on each and every stream.
The Payment Systems Market
Wireless payment systems have been a hot technology topic since before the year
. . .
Item 9.01 Financial Statements and Exhibits.
(b) Exhibits
10.1 Consolidated financial statements
10.2* Amendment to Share Exchange Agreement, dated March
30, 2010, between RTG Ventures, Inc., and Cloud
Channel Limited.
10.3* Amendment to Share Purchase Agreement between Cloud
Channel Limited and Bitemark MC Limited.
10.4* Amendment to Share Purchase Agreement between Cloud
Channel Limited and Stylar Limited.
* Previously filed in the exhibits to the Registrant's Current Report on form
8-KA filed with the commission on July 15, 2010.
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