East Side Games Group (TSX:EAGR, OTCQB:EAGRF) Inc has announced that its studio, East Side Games Inc. (ESG), which the company acquired in February 2021, has achieved revenue milestones previously set under the acquisition.
As such, the former shareholders of East Side Games studios will be paid a contingent consideration of C$20 million.
The former shareholders of East Side Games studios were entitled to the contingent consideration, payable within 30 days, if the company reached $100 million in gross revenue, on a consolidated basis, in the 12 months ended February 5, 2022, and that revenue milestone has been met.
Of the contingent consideration, $10 million will be paid by way of 4,444,444 common shares, the maximum common shares allowable under the agreement, and the remaining $10 million will be paid in cash, using the company's cash on hand.
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The common shares will be subject to a four-month hold period, under applicable securities laws and additional shareholder lock up arrangements related to ESG directors, officers and shareholders in connection with the common share portion of the contingent consideration.
Of the shares, 3,413,114 shares will be issued to a family trust of which Jason Bailey, executive chair of the company, is a trustee. Immediately prior to such issuance, Bailey indirectly held 37,544,963 common shares of the company and 400,000 stock options, representing 49.0% of the outstanding shares prior to the issuance, calculated on a partially-diluted basis assuming exercise of such options.
After the issuance, Bailey will indirectly hold 40,958,077 common shares of the company and 400,000 incentive stock options, representing 50.5% of the outstanding shares after such issuance, calculated on a partially-diluted basis assuming exercise of such options.
East Side Games Group - formerly operating under the name "LEAF Mobile Inc - is a leading free-to-play mobile game group, creating engaging games that produce enduring player loyalty.
The company's studio groups entrepreneurial culture is anchored in creativity, execution, and growth through licensing of our proprietary Game Kit software platform that enables professional game developers to greatly increase the efficiency and effectiveness of game creation in addition to organic growth through a diverse portfolio of original and licensed IP mobile games that include The Goldbergs: Back to the 80s, It's Always Sunny: The Gang Goes Mobile and Trailer Park Boys Grea$y Money, RuPaul's Drag Race Superstar and The Office: Somehow We Manage.
The company is headquartered in Vancouver, Canada and its games are available worldwide on the App Store and Google Play.
Contact the author at jon.hopkins@proactiveinvestors.com