TORONTO, Nov. 18, 2020 /CNW/ - Bragg Gaming Group
(TSXV: BRAG) (OTC: BRGGF) ("Bragg" or the "Company")
is pleased to announce the Company has closed its previously
announced "bought deal" short form prospectus offering of units
("Units") of the Company ("Offering") at a price of
$0.70 per Unit (the "Offering Price") for total
gross proceeds of $20,700,575, which
included the exercise of the over-allotment option in full. Under
the Offering, 29,572,250 Units were sold by a syndicate of
underwriters including, Cormark Securities Inc. and Canaccord
Genuity Corp., as co-bookrunners, Haywood Securities Inc., Paradigm
Capital Inc. and Eight Capital (collectively, the
"Underwriters").
"I'd like to thank our financial partners and investors for
their support in completing this transaction," said Adam Arviv, Interim CEO of Bragg. "This deal is
the next step in our continued transformation and will allow us to
look ahead to future expansion and growth."
Each Unit consists of one common share in the capital of the
Company (a "Common Share") and one-half of one common share
purchase warrant of the Company (each whole common share purchase
warrant, a "Warrant"). Each Warrant will entitle the holder
to purchase one Common Share at a price of $1.00 at any time prior to 4:30 p.m. (Toronto time) on the date that is 36 months
following the closing of the Offering. At the Company's option, if
the Company's daily volume weighted average Common Share price is
greater than $1.50 for at least ten
consecutive trading days, then the Company may accelerate the
exercise period of the Warrants to a period ending at least 30 days
from the date notice of such acceleration is provided to the
holders of Warrants. To exercise this option, the Company must
provide written notice to the holders of the Warrants, supplemented
by a news release that sets out the accelerated expiry date.
As consideration for their services, the Underwriters received a
cash commission equal to 6.0% of the gross proceeds of the
Offering. As additional consideration, the Company issued a total
of 1,774,335 broker warrants to the Underwriters. Each broker
warrant is exercisable into one Unit at the Offering Price for a
period of 3 years from the closing of the Offering.
The Company intends to use the net proceeds of the Offering to
satisfy a portion of the outstanding the first earn-out payment to
K.A.V.O. Holdings Limited ("KAVO") in partial consideration
for a previously completed acquisition of all of the issued and
outstanding membership interests of its principal subsidiary, Oryx
Gaming International LLC, a turnkey gaming solution supplier
("Oryx").
Related Party Transaction Disclosure
The Company also announces today that, further to its news
releases of September 30, 2020 and
November 7, 2020, the second and
final earn-out payment of €22 million (approximately C$34,289,200) owing to KAVO, will be converted
into Common Shares by January 31,
2021, at a deemed conversion price of $0.73, being 47,000,000 Common Shares, or
otherwise paid in cash by December 1,
2021. The satisfaction of the second and final earn-out
payment and KAVO's entitlement to receive up to €1,500,000 in
certain accounts receivable of the Company are subject to
certain conditions, including receiving disinterested shareholder
approval for the creation of KAVO (and its associates and
affiliates, including Matevž Mazij) as a "control person" of the
Company, being a holder of greater than 20% of the voting rights of
the Company's outstanding securities (the "Transaction").
The Company intends to seek disinterested shareholder approval for
the creation of KAVO as a "control person" at the Company's annual
and special meeting to be held on November
27, 2020 ("Meeting"). Further details with respect to
the Transaction are included in the management information circular
dated October 29, 2020 in connection
with the Meeting. Following the completion of the Transaction, the
KAVO will hold 49,000,000 Common Shares, being, as of this news
release, 30.5% of the outstanding Common Shares of the Company on a
non-diluted basis or 30.4% of the outstanding Common Shares of the
Company on a fully-diluted basis.
Matevž Mazij is the managing director of Oryx, of which the
Company is a control person, and as a result thereof, the
Transaction is a "related party transaction" under the provisions
of Multilateral Instrument 61-101 – Protection of Minority
Securityholders in Special Transactions ("MI
61-101") and therefore, is subject to majority of the minority
shareholder approval. The disinterested shareholder approval will
also constitute majority of the minority shareholder approval for
purposes of MI 61-101. As the Common Shares are listed on the TSXV,
the Transaction is exempt from the valuation requirement as
described in section 5.5(b) of MI 61-101. There are no prior
valuations in respect of the Company or the Common Shares and
neither the board of directors of the Company ("Board") nor
the officers of the Company are aware of the existence of any such
valuation.
No special committees of the Board were established in
connection with the Transaction, there were no conflicted
directors, no materially contrary view or abstention was expressed
or made by any director. The Board believes that the Transaction is
in the best interest of the Company. The Board based its
recommendation upon the totality of information presented to it and
considered by it in light of its knowledge of the business,
financial conditions and prospects of the Company, after having
undertaken a thorough review of, and having carefully considered
the terms of the Transaction.
The following summary of the information and factors considered
by the Board is not intended to be exhaustive but includes a
summary of the material information considered in connection with
the consideration of the Transaction:
- Contingent Liabilities: The completion of the
Transaction would effectively remove the vast majority of the
Company's contingent liabilities from its balance sheet, which was
otherwise due in cash.
- Security Discharge: As a result of the Transaction, the
security against Oryx in favour of KAVO will be discharged giving
the Company flexibility to pursue further financing.
- Expands Strategic Relationship with Matevž Mazij: There
is positive value of having Matevž Mazij, the founder and current
managing director of Oryx, aligned and invested with the success of
the Company. In addition, Matevž Mazij will continue to be
committed to the Company through his appointment to the Board at
the Meeting.
These various considerations were carefully considered and
weighed against the dilutive impact of the Transaction to the
current shareholders of the Company and the effective control
Matevž Mazij would have upon the completion of the Transaction.
About Bragg Gaming Group
Bragg Gaming Group Inc. is a next generation gaming group with
cutting-edge technology, leading brands and world-class management
expertise, developing into a global gaming force. Formed by a team
of gaming industry experts, Bragg's main portfolio asset is ORYX
Gaming, an innovative business-to-business gaming technology
platform and casino content aggregator.
Through this brand and targeted acquisitions, Bragg is focused
on becoming a leader within the evolving global gaming industry.
Learn more at https://www.bragg.games.
Cautionary Statement Regarding Forward-Looking
Information
This news release may contain forward-looking statements or
"forward-looking information" within the meaning of applicable
Canadian securities laws ("forward-looking statements"). Often, but
not always, forward-looking statements can be identified by the use
of words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or describes a "goal", or variation of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs and
assumptions based on information available at the time the
statements were made. Actual results or events may differ from
those predicted in these forward-looking statements. All of the
Company's forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements. The key assumptions that have been made
in connection with the forward-looking statements include the
following: the impact of COVID-19 on the business of Bragg; the
countercyclical growth of the business of Bragg; the regulatory
regime governing the business of Bragg; the operations of the
Company; the products and services of the Company; Bragg's
customers; acquisition opportunities; the growth of Bragg's
business, which may not be achieved or realized within the time
frames stated or at all; and the anticipated size and/or revenue
associated with the gaming market globally.
Forward-looking statements involve known and unknown risks,
future events, conditions, uncertainties and other factors that may
cause actual results, performance or achievements to be materially
different from any future results, prediction, projection,
forecast, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, the
following: risks associated with general economic conditions;
adverse industry events; future legislative and regulatory
developments; the inability to access sufficient capital from
internal and external sources; the inability to access sufficient
capital on favorable terms; realization of growth estimates, income
tax and regulatory matters; the ability of Bragg to implement its
business strategies; competition; economic and financial
conditions, including volatility in interest and exchange rates,
commodity and equity prices; the estimated size of the gaming
market globally; changes in customer demand; disruptions to our
technology network including computer systems and software; natural
events such as severe weather, fires, floods and earthquakes; the
ability of the Company to satisfy the earn-out payments; and risks
related to health pandemics and the outbreak of communicable
diseases, such as the current outbreak of COVID-19.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events, or otherwise, except in accordance with
applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
SOURCE Bragg Gaming Group
