Bragg Gaming Group has announced a non-brokered private placement to raise up to $1.3 million, featuring significant commitments from insiders. The move comes after workforce reductions aimed at improving profitability. Key details include subscription receipts priced at $1.73, convertible into shares and warrants. The company anticipates using the proceeds for corporate purposes and working capital, with a closing date around June 19.
Bragg Gaming Group is taking significant steps to bolster its financial position, announcing a non-brokered private placement aimed at raising up to $1.3 million. This comes shortly after the company undertook a restructuring effort that involved laying off 12% of its global workforce to streamline operations and enhance profitability.
The private placement will involve offering shares to a select group of private investors, rather than opening the offering to the general public. Among the participants is industry veteran Matt Davey, who has committed to acquiring more than 115,000 subscription receipts.
Bragg plans to issue up to 751,445 subscription receipts, each priced at $1.73, a figure that reflects the company’s Nasdaq closing price as of May 29. These subscription receipts serve as placeholders for future shares. Once certain escrow release conditions are met, each receipt will convert into one common share and one non-transferable warrant.
The warrants will allow holders to purchase one share at a strike price of $2.16, valid for 36 months post-closing. However, there’s an important acceleration clause: if the volume-weighted average price (VWAP) of Bragg shares on the Toronto Stock Exchange exceeds 25% above the exercise price for 15 consecutive trading sessions, the company can issue a 30-day notice to accelerate the warrant expiry, nullifying any unexercised warrants.
The anticipated net proceeds from this offering are earmarked for general corporate purposes and working capital. The closing date is projected for around June 19, pending standard regulatory approvals from entities such as the TSX and Nasdaq.
Several insiders have shown strong support for the placement. Chief Financial Officer Robbie Bressler is set to subscribe to up to 86,705 subscription receipts, while Chief Operating Officer Morten Tonnesen and Director Thomas Winter will each take up to 57,803 receipts. Notably, Matt Davey, founder and chairman of Tekkorp Capital, has committed to acquiring 115,607 subscription receipts, projecting that he will hold around 10% of Bragg’s issued shares on a non-diluted basis after the acquisition and offering.
Davey is poised to become the non-executive chair of Bragg following the completion of the company’s acquisition of Drayton International, a deal announced last month. Bragg plans to issue 4.5 million common shares at $2.00 each to secure 100% ownership of Drayton’s equity.
At the time of the acquisition announcement, Bragg’s CEO Matevž Mazij highlighted its strategic importance, stating that it represents “a highly strategic step forward for Bragg as we continue to expand our global footprint and invest in proprietary IP and technology.”
This private placement and the upcoming acquisition illustrate Bragg Gaming Group’s commitment to enhancing its market position and financial stability. With key insiders backing the initiative, the company appears poised for growth as it navigates the evolving landscape of the iGaming sector.
Kathryn Evans covers bitesize breaking news with a keen focus on EMEA and US legislation. A proud North Walian, she is a fluent Welsh speaker and a lifelong supporter of Wrexham FC, well before Hollywood came into the picture.
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