On Monday, Bragg Gaming Group announced a non-brokered private placement looking to raise up to $1.3 million.
This type of capital raise sees shares offered to a select group of private investors, rather than the general public. The round included participation from company insiders and industry veteran Matt Davey.
The announcement comes not long after the group had to cut 12% of its global workforce to help improve cost structure, drive EBITDA growth and allow it to achieve sustained net profitability faster.
Details of the private placement
As part of the placements, Bragg planned to issue up to 751,445 subscription receipts, as a placeholder for any investors’ shares.
These are priced at $1.73 each, a figure linked to the company’s Nasdaq closing price on 29 May. Every subscription receipt will convert, following the fulfilment of certain escrow release conditions, into one common share and one non-transferable warrant.
The warrants will be exercisable to purchase one share at a strike price of $2.16, valid for 36 months post-closing.
However, these warrants also come with an acceleration clause. If the volume-weighted average price (VWAP) of Bragg shares on the Toronto Stock Exchange (TSX) were to exceed 25% above the warrant exercise price for 15 consecutive trading sessions, Bragg may issue a 30-day notice to accelerate the warrant expiry, cancelling any unexercised warrants.
The company expects net proceeds from the offering to go towards general corporate purposes and working capital requirements. The closing date for the offering will be around 19 June. This will be subject to standard regulatory approvals, including from the TSX, Nasdaq and relevant authorities.
Insiders and Drayton acquisition
Several key insiders have committed to participating in the placement. Chief financial officer Robbie Bressler subscribed to up to 86,705 subscription receipts, while chief operating officer Morten Tonnesen and director Thomas Winter will each subscribe to up to 57,803 receipts. .
Prominently, Matt Davey, founder and chairman of gaming investment firm Tekkorp Capital, has committed up to 115,607 subscription receipts.
Bragg Gaming estimated that post-acquisition and offering, Davey will hold approximately 10% of Bragg’s issued shares on a non-diluted basis.
Davey, an executive within the gaming sector, is set to become non-executive chair of Bragg following the completion of its Drayton International acquisition, announced last month.
Bragg Gaming said it would issue 4.5 million common shares at $2.00 each to acquire 100% ownership of Drayton International’s equity.
At the time of announcement, BraggCEO Matevž Mazij praised the acquisition, noting it represented “a highly strategic step forward for Bragg as we continue to expand our global footprint and invest in proprietary IP and technology”.
Kathryn Evans
Kathryn covers bitesize breaking news with a primary focus on EMEA and US legislation. A proud North Walian, fluent Welsh speaker and lifelong Wrexham FC fan – long before Hollywood came calling.
Original article: https://igamingbusiness.com/finance/bragg-gaming-raise-1-3m-private-placement-funding/
