Sun Machine Entertainment, Inc. ("SME") entered into a non-binding letter of intent to acquire Drummond Ventures Corp. (TSXV:DVX.P) in a reverse merger transaction on September 26, 2019. SME entered into an amalgamation agreement to acquire Drummond Ventures Corp. in a reverse merger transaction on December 2, 2019. Pursuant to the transaction, Drummond will issue an aggregate of 28.57 million common shares in the capital of Drummond Ventures and approximately 0.26 million replacement stock options of Drummond Ventures, based on a share exchange ratio of 1.46 Drummond Shares for each common share of SME, such that the current holders of Drummond Ventures will own approximately 15% of the issued and outstanding common shares of the resulting issuer on a non-diluted basis and the shareholders of SME will own approximately 85% of the resulting issuer. As of May 28, 2020, Drummond will issue an aggregate of 28.57 million common shares in the capital of Drummond Ventures and approximately 0.69 million replacement stock options. The shares to be issued pursuant to the proposed transaction may be subject to the escrow requirements of the exchange. Drummond Ventures will complete an advance of CAD 0.23 million to SME as a refundable deposit. Prior to closing of the amalgamation and the bridge financing and the concurrent financing, SME will complete a forward share split on the basis of 1.4462071 post SME share split shares for each one pre-SME share split share. Thereafter and upon closing of the transaction, all of the issued and outstanding securities of SME will be exchanged for corresponding securities of Drummond as follows, each of the common shares of SME including the concurrent financing SME shares and the SME shares issued upon conversion of the debentures, will be cancelled and, in consideration therefore, each SME shareholders will receive one Drummond Share at a deemed price of CAD 0.35 per Drummond Share for each one SME Share held and each of the options to purchase SME Shares will be exchanged for one option to purchase the corresponding number of SME Shares on the same terms as those contained in the SME options, and each such SME option shall be cancelled. Prior to the closing of transaction, SME and Drummond will complete a non-brokered private placement of convertible notes, whereby SME shall issue convertible notes for aggregate proceeds of approximately CAD 0.43 million. In connection with the completion of the transaction, Drummond Ventures intends to change its name to “Sun Machine Entertainment Inc.” and trade on the TSXV under the symbol “SM”. The agreement also includes customary covenants and a termination fee of CAD 0.2 million may be payable by either party in certain circumstances. In connection with the transaction, it is expected that there will be changes to Drummond’s management and Board of Directors. The Board of Directors of the resulting issuer will initially consist of four Directors, currently including William Mozell, Craig Rollins and David De Witt. William Mozell will be the President, Chief Executive Officer and Director, Craig Rollins will be the Executive Vice President, General Counsel, Corporate Secretary and Director, David De Witt will be the Non-Executive Chairman and Director, Derek Yip will be Chief Operating Officer, Steven Krause will be Chief Financial Officer, Cong Ly will be Chief Technology Officer, Kirk Gibbons will be Chief Creative Officer and Rick Griffiths will be Director (Independent). The Parties agree that the address of the registered and records office shall be at 800 - 885 West Georgia Street, Vancouver, British Columbia, V6C 3H1. The transaction is subject to the satisfactory completion of due diligence, the completion of definitive documentation, arrange a financing to raise gross proceeds of CAD 3 million through the issuance of Drummond’s shares, completion of debenture financing by SME, all regulatory approvals, approval of shareholder of SME and third-party approvals, including Exchange approval, completion of a pre-closing Sun Machine share split, delivery of SME’s audited financial statements and the Board of Drummond Ventures having procured resignations and mutual releases from each director and officer of Drummond Ventures who will no longer be serving in such capacities following the closing. The transaction will not be subject to approval of the shareholders of Drummond. The transaction is subject to obtaining conditional approval of TSXV for the listing of shares of Drummond Ventures that will be issued to SME and execution of escrow agreement. The transaction has been approved unanimously by the Boards of Directors of Drummond and SME. As of December 16, 2019, SME completed debenture financing which raised gross and net proceeds of CAD 0.5 million through a non-brokered private placement of 50,000 debentures. The transaction was conditionally approved by the TSXV on February 13, 2020, which was finalized and superseded by a conditional approval from the Exchange on February 21, 2020. As of February 25, 2020, Delivery of SME’s audited financial statements is completed. It is anticipated that the definitive agreement will be entered into on or before October 31, 2019. Closing of the transaction is expected to occur by February 12, 2020, or such other date, as the parties may mutually agree. As of February 25, 2020, closing of the transaction is expected to occur on or about March 13, 2020. As of February 28, 2020, the parties amended the Amalgamation Agreement closing and completion dates from February 28, 2020 to March 15, 2020. As of April 21, 2020, closing of the transaction postpone due to the volatility of the financial markets in the midst of the COVID-19 pandemic and the transaction is expected to close in or before fourth quarter 2020. As of June 23, 2020, the transaction is expected to close in calendar third quarter 2020. As of October 28, 2020, the transaction is expected to be completed on October 31, 2020. As of November 9, 2020, the closing date has been extended to from October 31, 2020 to May 31, 2021. Larry Yen of Dentons Canada LLP acted as legal advisor for Drummond. Virgil Hlus of Clark Wilson LLP acted as legal advisor for SME. Boughton Law Corporation acted as legal advisor to Drummond Ventures. Sun Machine Entertainment, Inc. cancelled the acquisition of Drummond Ventures Corp. (TSXV:DVX.P) in a reverse merger transaction on June 1, 2021. Accordingly, Drummond will be repaid its secured loan in the amount of CAD 0.35 million and has agreed to convert its non-completion fee into a convertible note on the same terms as the current debenture holders of Sun Machine.