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TORONTO, April 26, 2016: NYX Gaming Group Limited ("NYX" or the "Company") (TSX-V:NYX) announced today that it has closed on the first tranche of its previously announced $150 million private placement offering (the "Offering"), for aggregate gross proceeds of approximately $116.5 million. A total of 38,713,636 subscription receipts of the Company (the "Subscription Receipts") have been issued at a price of $2.75 (the "Offering Price") per Subscription Receipt, for aggregate gross proceeds of approximately $106.5 million, as well as a $10.0 million unsecured 10% convertible debenture (the "Convertible Debenture") to a strategic investor. Each Subscription Receipt will automatically convert into one Special Warrant (as defined below), and the principal amount of the Convertible Debenture will automatically convert into an aggregate of 3,636,364 Special Warrants (as defined below), without payment of additional consideration or further action on the part of the holder, upon completion of the Acquisition (as defined below). The Underwriters (as defined below) are entitled to a commission of 4% of the aggregate gross proceeds from the Subscription Receipts sold under the first tranche of the Offering and the Convertible Debenture (the "Underwriters' Commission").
As part of the Offering, certain of the Sellers (as defined below) subscribed for an aggregate 12,200,000 Special Warrants at the Offering Price, which shall be issued on the final tranche closing of the Offering (expected to occur in May 2016) in consideration for the reinvestment of $33,500,000 of the purchase price payable to certain of the Sellers by the Company at closing of the Acquisition. A fee of 4% is payable by NYX to the Sellers and no fee is payable to the Underwriters in connection with such subscription.
The Offering was conducted through a syndicate of underwriters co-led by Canaccord Genuity Corp. ("Canaccord Genuity") and Macquarie Capital Markets Canada Ltd. ("Macquarie Canada", together with Canaccord Genuity, the "Co-Leads") and included National Bank Financial Inc., Cantor Fitzgerald Canada Corporation, Cormark Securities Inc., Dundee Securities Ltd., Global Maxfin Capital Inc. and Mackie Research Capital Corporation (collectively, the "Underwriters").
Each Subscription Receipt will entitle the holder to receive, upon the satisfaction of all conditions precedent to the Acquisition (other than the payment of the purchase price and any other amounts to be satisfied by the release of the escrowed funds) and certain other conditions (the "Escrow Release Conditions") as set out in the Subscription Receipt Agreement entered into today between the Company, TMX Equity Transfer and Trust Company (the "Subscription Receipt Agent") and the Co-Leads, and without payment of additional consideration or further action on the part of the holder, one special warrant of the Company ("Special Warrant") in exchange for each Subscription Receipt.
The Special Warrants are exercisable by the holders thereof at any time following issuance, subject to each Special Warrant being automatically converted without any action on the part of the holder into one ordinary share in the capital of NYX (the "Ordinary Shares") and one-quarter of one ordinary share purchase warrant of NYX (each whole warrant, a "Warrant") upon the earlier of: (i) the third business day following the issuance of a final receipt for the Prospectus (as defined below), and (ii) the date that is four months and one day from the date hereof (such date being the hold period expiry date). Each Warrant will entitle the holder to acquire one Ordinary Share for an exercise price of $3.50 per Ordinary Share at any time for a period of three years following the closing of this first tranche of the Offering. The Company will use its commercially reasonable efforts to file a prospectus (the "Prospectus") in order to qualify in Canada the issuance of the underlying Ordinary Shares and Warrants upon the automatic conversion of the Special Warrants.
The net proceeds of the Offering will be used (i) to fund, in part, the acquisition (the "Acquisition") by the Company of 100% of the issued and outstanding shares of OB Topco Limited ("OpenBet") from funds managed by OpenBet's largest existing shareholder and certain other shareholders of OpenBet (collectively, the "Sellers"); and (ii) for general corporate purposes.
The gross proceeds from the sale of the Subscription Receipts, but excluding for greater certainty the gross proceeds raised from the issuance of the Convertible Debenture, less 50% of the Underwriters' Commission, are being held in escrow pending satisfaction of the Escrow Release Conditions. If: (i) the Escrow Release Conditions are not satisfied by July 4, 2016 (which date may be extended up to an additional 30 days by the Co-Leads on behalf of the Underwriters, in their sole discretion); or (ii) NYX advises the Subscription Receipt Agent and the Co-Leads, or announces to the public, that the Acquisition will not be completed (in either case, a termination event, and the date upon which such event occurs, the "Termination Date"), the Subscription Receipt Agent and NYX will return to holders of Subscription Receipts an amount per Subscription Receipt equal to the Offering Price paid by each holder plus a pro rata share of the interest earned on the escrowed funds, net of any applicable withholding taxes, and the Subscription Receipts will be cancelled. NYX shall be responsible for paying any shortfall to each Subscription Receipt holder.
The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United states absent registration or an applicable exemption from the registration requirements.
About NYX Gaming Group Limited
NYX Gaming Group Limited is a premier digital gaming supplier headquartered in Las Vegas, USA with a staff of more than 445 employees based in 8 countries across Europe, North America and Australia. The Company provides one of the world’s largest portfolios of leading content and technology to some of the foremost gaming operators, lotteries and casinos across the globe. NYX also has one of the broadest distribution bases in the industry with over 170 unique customers and a collective game catalogue of over 650 games. The market leading game catalogue includes slots, table games, scratch cards, lottery, bingo and poker available across web and mobile formats.
NYX Gaming Group Limited is listed on the TSX Venture Exchange under the symbol (TSXV: NYX).
Certain statements included herein, including those that express management’s expectations or estimates of NYX’s future performance, constitute “forward-looking statements” within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “potential” or the negative of these terms or other similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to: the proposed financing details and sources used to fund the Acquisition, the timing of the distribution of the Subscription Receipts, Special Warrants, Warrants and other underlying securities, expectations or projections about strategies and goals for growth and expansion, accretive earnings, anticipated revenue and realization of cost synergies associated with the acquisition of OpenBet. In particular, there can be no assurances that the Acquisition will be completed or that any financing alternatives that may be available to the Company to fund the Acquisition will be realized on terms satisfactory to the Company, if at all. Forward looking statements are based on certain assumptions regarding the OpenBet’s expected growth, results of operations, performance, industry trends and growth opportunities. Additional key assumptions on which forward-looking information is based include assumptions about regulatory decisions and outcomes, access to capital markets, timing and completion of the Acquisition, and the realization of the anticipated benefits and synergies of the Acquisition.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward looking statements. Applicable risks and uncertainties include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, the impact of government regulation on the on-line gaming industry and the risk that such regulation is subject to change, competition from other providers of online gaming services, the possibility that the Company will be unable to successfully integrate OpenBet’s business as described herein, the risks associated with international and foreign operations, the impact of consolidations in the online gaming industry and the other risks identified under the heading “Risk Factors” in the Company’s final long form prospectus dated December 18, 2014, and final short from prospectus dated July 9, 2015, each as filed on SEDAR at www.sedar.com, and in other filings that NYX may make with applicable securities authorities in the future. The forward-looking statements contained herein reflect NYX’s current views with respect to future events, and except as required by law, NYX does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events, or otherwise. Any forward-looking statements or facts (including financial information) related to OpenBet’s business discussed or disclosed herein are derived from information obtained from OpenBet and publicly available sources and has not been independently verified by the Company.
Neither the 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 release.
SOURCE NYX Gaming Group Limited