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GAN Raises $2.5M Loan Capital for Patent Licensing Program and Pennsylvania iGaming Regulation

10 April, 2017
GAN plc ("GAN" or "the Company")
 
Conditional Placing and Open Offer of £2 million 9% Convertible Unsecured Loan Notes 2022 and posting of Circular
 
Introduction

The Board of GAN is pleased to announce it has raised £2 million by way of a conditional Placing and Open Offer of 9% Convertible Unsecured Loan Notes 2022. The Company has conditionally placed all of the Convertible Notes with Sir Michael Smurfit.

In order to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the fundraising, the Company is providing all Qualifying Shareholders with the opportunity to subscribe, at the Offer Price, for the Convertible Notes, on the basis of one Convertible Note for every thirty-five Existing Ordinary Shares payable in full on acceptance. The Placing will be subject to claw-back depending on the acceptance levels under the Open Offer. The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of the Convertible Notes on a pre-emptive basis whilst providing the Company with additional capital to invest in the business of the Group.

Reasons for the Placing and Open Offer

The Board has determined there exists a requirement for additional capital in order that the Company has available to it suitable financial resources to respond to the opportunities the Board believes will be available to the Company in newly regulated intra-State Internet gaming markets in the United States, currently specifically in Pennsylvania, together with the opportunity to commence a US patent licensing program and other general working capital purposes. Having considered such opportunities the Board considers the amount sought by way of the Convertible Notes to be the appropriate amount and that capital in the terms of the Convertible Notes is the most suitable form of capital available and is in the best interests of the Company.

Details of the Convertible Notes

The key terms of the Convertible Notes are outlined in the Circular and the instrument creating the Convertible Notes can be reviewed in full via the website of the Company (www.gan.com). Whilst Shareholders should read the Circular and the instrument creating the Convertible Notes in full, Shareholders will note that the terms of the Convertible Notes include:
●     A principal amount of £2,001,483 split into denominations of £1.00 per Convertible Note.
●     An interest rate of 9% per annum accrued daily and payable quarterly in arrears. The first interest payment after the issue of the Convertible Notes shall be on 1 January 2018.
●     That the Convertible Notes are repayable in full during their term at the election of the Company on one month's notice (with an additional one year's interest then being due) and must be repaid in full with accrued interest on 27 April 2022.
●     That the Convertible Notes can be converted into Ordinary Shares at a conversion price of 45.5 pence per Ordinary Share provided Noteholders pass a Special Resolution resolving to convert them.
●     That the Convertible Notes are not transferable.

Related Party Transaction

Sir Michael Smurfit is a related party for the purposes of the AIM Rules and the ESM Rules and accordingly the placing of the Convertible Notes with him comprises a related party transaction. The Directors consider, having consulted with Davy the nominated adviser and ESM Adviser to the Company, believe that the terms of the Placing and Open Offer and the Convertible Notes are fair and reasonable in so far as Shareholders are concerned.

Posting of Circular

A circular, containing further information regarding the conditional Placing and Open Offer, will shortly be sent to Shareholders outlining the terms of the conditional Placing and Open Offer (the "Circular").
Pursuant to Rule 20 of the AIM and ESM Rules, copies of the Circular will shortly be available for inspection at www.gan.com.
Capitalised terms used, but not defined in this announcement, have the same meanings as set out in the Circular.

Year end results

The Company previously announced in its trading statement on 10 January 2017, that it would release its results for the year ended December 31, 2016 on April 26th 2017. The Company now expects to release its results for the year ended December 31, 2016 on May 30th 2017.
 
Expected Timetable of Principal Events
 
Record Date for entitlements under the Open Offer 5 pm on 5 April 2017
Announcement of the Placing and Open Offer, publication and posting of this Document and posting of the Application Forms to Qualifying Shareholders holding certificated Ordinary Shares 10 April 2017
Ex-Entitlement Date for the Open Offer 10 April 2017
Open Offer Entitlements enabled in CREST and credited to stock accounts of Qualifying CREST Shareholders in CREST
Recommended latest time for requesting withdrawal of Open Offer Entitlements and Excess Convertible Notes from CREST
Latest time and date for depositing Open Offer Entitlements into CREST
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)
11 April 2017
 
4.30 pm on 20 April 2017
3.00 pm on 21 April 2017
 
3.00 pm on 24 April 2017
Latest time and date for acceptance of the Open Offer and receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)
Announcement of the results of the Open Offer
Entry of each Noteholder's entitlement in the Convertible Notes register
11.00 am on 27 April 2017
 
28 April 2017
28 April 2017
Despatch of Convertible Note certificates 5 May 2017

If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service. All references are to London time unless stated otherwise.

Placing and Open Offer Statistics
 
 
Number of Existing Ordinary Shares currently in issue
 
 
70,051,924
 
Offer Price per Note
 
 
£1.00
 
Number of Convertible Notes (subject to claw-back)
 
 
2,001,483
 
Basic entitlement under the Open Offer
 
 
 
Conversion Price for the Convertible Notes
 
One Convertible Note for every Thirty-Five Existing Ordinary Shares
 
45.5 pence
 
 
Gross proceeds from the Placing and Open Offer
 
£2,001,483
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
 
For further information please contact:
 
GAN
Dermot Smurfit
Chief Executive Officer
  +44 (0) 20 7292 6262 
dsmurfit@gan.com
     
Davy (Nominated Adviser, ESM Adviser and Broker)
John Frain / Barry Murphy
  +353 (0) 1 679 6363 
     
Investors: The Equity Group  
Adam Prior/Kyle King
  212.371.8660
aprior@equityny.com
     
 
Important notice:
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Convertible Notes, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Placing and Open Offer or otherwise. This announcement is not a prospectus and investors should not subscribe for or purchase any Convertible Notes on the basis of this announcement. Any offer to acquire Convertible Notes referred to in this announcement will be made, and any investor should make his investment, solely on the basis of information in the Circular to be published today. When made available, copies of the Circular may be obtained at no cost through the Company's corporate website (http://www.gan.com/).

The distribution of this announcement and/or the Circular in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this announcement should not be distributed, forwarded to, or transmitted in or into the United States, Canada, Japan, the Republic of South Africa or Australia.
The Convertible Notes will not be offered in or into any jurisdiction unless such an offer can be made without contravention of any unfulfilled registration or other legal or regulatory requirements. The Convertible Notes, the Open Offer Entitlements and the Excess Open Offer Entitlements have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered, sold or delivered in, into or from the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. 

Davy, which is authorised and regulated in Ireland by the Central Bank of Ireland, is acting as nominated adviser, ESM adviser and broker to the Company in connection with the matters described in this Document. Persons receiving this Document should note that Davy is acting exclusively for the Company in connection with arrangements described in this Document and is not acting for any other person and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Davy or for advising any other person on the arrangements described in this Document. Davy has not authorised the contents of, or any part of, this Document and no liability whatsoever is accepted by Davy for the accuracy of any information or opinion contained in this Document or for the omission of any information.

Cautionary note regarding forward looking statements:

This announcement includes certain ''forward-looking statements'' with respect to the business, strategy and plans of the Company and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about the Company's or the Directors' and/or management's beliefs and expectations are forward looking statements. Words such as ''believes'', ''anticipates'', ''estimates'', ''expects'', ''intends'', ''aims'', ''potential'', ''will'', ''would'', ''could'', ''considered'', ''likely'', ''estimate'' and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, those discussed in the Circular. The Company undertakes no obligation publicly to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirement under applicable laws, the AIM Rules, the ESM Rules and other applicable regulations.
 

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