Playgon Games Inc (TSX-V:DEAL, OTCQB:PLGNF) said it has completed the closing of a first tranche of its previously announced non-brokered private placement of unsecured convertible debentures for aggregate gross proceeds of $1.82 million.
The company said it intends on completing a second tranche closing of the offering as soon as possible.
Playgon noted that the net proceeds of the offering are intended to be used to finance continuing sales and marketing efforts in core European jurisdictions, to enter new markets including Latin America and North America, continuing development costs, new tables with native language speaking dealers, as well as for general working capital and corporate purposes.
The debentures will mature on January 19, 2025, 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.
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The company may, at its sole discretion, subject to the approval of the TSX Venture Exchange (TSX-V), elect to pay the accrued interest in cash or in common shares of the company at a price per share equal to the five-day VWAP (volume-weighted average price) of the common shares on the TSX-V (or such other stock exchange where the majority of trading volume occurs) immediately preceding the date interest is due, subject to such deemed issuance price being no less than the maximum allowable discount permitted by the TSX-V.
Holders of the debentures will be entitled to convert the principal amount of the debentures at any time on or prior to the maturity date into common shares at a conversion price of 10 cents, subject to standard adjustments. If, at any time after the initial statutory hold period of four months plus one day following the closing of the offering, the common shares trade or close at a price equal to 25 cents or more for 10 consecutive trading days on the TSX-V (or such other stock exchange where the majority of trading volume occurs), the company will have the right, in its sole discretion to force the conversion of the principal amount of the debentures into common shares at the conversion price by giving notice via news release of its exercise of such right and thereafter the debentures will be deemed satisfied and represent the right, on the tender thereof to the company, to receive the common shares.
Such conversion shall not occur earlier than the first anniversary of the closing of the offering. The company shall also have the right, in its sole discretion, after the first anniversary of the closing of the offering, to issue 30 days written notice to the holders of the debentures notifying them of the company's intention to redeem the debentures for cash. The holders of the debentures can, in such case, continue to exercise their right to convert the debentures into common shares within the notice period.
Should the company elect to redeem the debentures early as previously stated, the company intends to pay each holder an additional cash bonus or, at the company's sole discretion and with the approval of the TSX-V, may issue common shares in lieu of cash at a price per share equal to the five-day VWAP of the common shares on the TSX-V (or such other stock exchange where the majority of trading volume occurs) immediately preceding the date interest is due, subject to such deemed issuance price being no less than the maximum allowable discount permitted by the TSX-V.
In connection with the offering, the company paid the following finders' fees to certain registered brokers - an amount of $27,000 was paid to Canaccord Genuity and an amount of $3,000 was paid to Leede Jones Gable.
The debentures (including the underlying common shares) will be subject to a statutory hold period of four months plus one day following the closing date of the offering. The offering remains subject to the final approval of the TSX-V.
Playgon is a software-as-a-service technology company focused on developing and licensing digital content for the growing iGaming market. The company provides a multitenant gateway that allows on-line operators the ability to offer their customers innovative iGaming software solutions. Its 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.
As a true business-to-business digital content provider, the company's products are ideal turnkey solutions for on-line casinos, sportsbook operators, land-based operators, media groups and big database companies.
Contact the author at jon.hopkins@proactiveinvestors.com