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Playgon closes second tranche of private placement, eyes potential $10M to be brought in through proposed brokered financing and anchor investor

Published 2023-03-27, 01:00 p/m
Updated 2023-03-27, 01:15 p/m
© Reuters.  Playgon closes second tranche of private placement, eyes potential $10M to be brought in through proposed brokered financing and anchor investor

© Reuters. Playgon closes second tranche of private placement, eyes potential $10M to be brought in through proposed brokered financing and anchor investor

Proactive Investors - Playgon Games Inc (TSX-V:DEAL, OTCQB:PLGNF) revealed that it has completed a second tranche closing of its previously announced non-brokered private placement of unsecured convertible debentures for additional aggregate gross proceeds of C$275,000.

On January 19, 2023, the Vancouver-based software-as-a-service technology company focused on licensing digital content for the growing iGaming market, said it had completed the closing of a first tranche of its non-brokered private placement of unsecured convertible debentures for proceeds of $1.82 million.

In total, Playgon said that it received gross proceeds of C$2.09 million following the closing of both tranches of the non-brokered offering.

Read: Playgon closes first tranche of non-brokered private placement of unsecured convertible debentures for proceeds of $1.82M

Playgon noted that the net proceeds of the offerings are intended to be used to finance sales and marketing efforts in European jurisdictions, to enter new markets including Latin America and North America, and continue development costs, new tables with native language speaking dealers, as well as for corporate purposes.

Proposed brokered financing

Meanwhile, Playgon revealed that it has struck an agreement with Pollitt & Company Inc to act as lead agent, on its own behalf and on behalf of a syndicate of agents, in connection with a new proposed private placement offering of unsecured convertible debentures for proceeds of up to $2 million.

The terms governing the new debentures will be identical to those governing the debentures previously issued in connection with the non-brokered offering, added the firm.

The new debentures will mature 24 months following issuance and each $1,000 debenture will bear simple interest at 10% per annum, calculated and paid semi-annually in arrears on the last day of June and December in each applicable calendar year.

The company may elect to pay the accrued interest in cash or in common shares at a price per share equal to the 5-day volume-weighted average price (VWAP), according to Playgon.

Investors can find more details regarding the new debentures here.

Anchor investor likely to bring in $6M

Playgon also announced that current shareholder Kathleen Crook is planning to invest up to an additional C$6 million in Playgon by buying additional unsecured convertible debentures on the same terms and conditions as those governing the existing debentures and the new debentures.

She currently holds, or controls 31,333,333 common shares and 1,666,667 warrants to acquire common shares, representing 12.4% of the total issued and outstanding common shares of Playgon on an undiluted basis. This works out to nearly 12.9% on a partially diluted basis, and she is, therefore, considered an insider, in line with Canadian securities laws.

Crook, along with each of her affiliates currently holds or controls an aggregate of 33,883,858 common shares and an aggregate of 4,491,929 warrants and other convertible securities, representing 13.4% of the total issued and outstanding common shares on an undiluted basis.

On the issuance of the full amount of debentures (assuming the full C$6 million investment) and assuming the full conversion of the debentures into common shares, Crook would own 91,333,333 common shares. This represents 29.2% of the total issued and outstanding common shares of Playgon on an undiluted basis.

On the other hand, Crook will hold 29.5% of Playgon on a partially diluted basis, therefore she will become a new “control person.” As such, Playgon said that it plans to obtain the “written consent” of its shareholders, who hold more than 50% of the total issued and outstanding shares.

The anchor financing would also constitute a related party transaction and the company intends to rely on available exemptions, said Playgon.

Money from the completion of the anchor financing will not only go towards all the activities mentioned earlier but also go towards repaying certain outstanding debt, noted Playgon.

Playgon’s current software platform includes live dealer casino, e-table games and daily fantasy sports, which, through a seamless integration at the operator level, allow customer access without having to share or compromise any sensitive customer data.

Read more on Proactive Investors CA

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