Bragg Gaming Targets Up to $1.3m in Non-Brokered Raise
On Monday, Bragg Gaming Group announced a non-brokered private placement aimed at raising up to $1.3 million. In this type of capital raise, shares are offered to a selected group of private investors rather than to the general public.
The round includes participation from company insiders and industry veteran Matt Davey. The move follows a recent decision by the group to cut 12% of its global workforce in an effort to improve cost structure, support EBITDA growth and move toward sustained net profitability more quickly.
Placement Structure and Terms
As part of the offering, Bragg plans to issue up to 751,445 subscription receipts, which act as placeholders for investors’ eventual shares.
Each receipt is priced at $1.73, based on the company’s Nasdaq closing price on 29 May. Following the fulfilment of certain escrow release conditions, every subscription receipt will convert into one common share and one non-transferable warrant.
The warrants can be exercised to purchase one share at a strike price of $2.16 and remain valid for 36 months after closing. They also include an acceleration clause. If the volume-weighted average price (VWAP) of Bragg shares on the Toronto Stock Exchange (TSX) exceeds the warrant exercise price by more than 25% for 15 consecutive trading sessions, Bragg may issue a 30-day notice to accelerate warrant expiry and cancel any unexercised warrants.
The company expects net proceeds from the offering to be used for general corporate purposes and working capital requirements. Closing is expected around 19 June, subject to standard regulatory approvals from the TSX, Nasdaq and other relevant authorities.
Insider Participation and Drayton Deal
Several key insiders have committed to take part in the placement. Chief financial officer Robbie Bressler has subscribed for up to 86,705 subscription receipts, while chief operating officer Morten Tonnesen and director Thomas Winter will each subscribe for up to 57,803 receipts.
Matt Davey, founder and chairman of gaming investment firm Tekkorp Capital, has committed to up to 115,607 subscription receipts. Bragg Gaming estimates that after the acquisition and offering are completed, Davey will hold roughly 10% of Bragg’s issued shares on a non-diluted basis.
Davey, a long-standing executive in the gaming sector, is set to become non-executive chair of Bragg following completion of the Drayton International acquisition announced last month.
Under that deal, Bragg Gaming said it would issue 4.5 million common shares at $2.00 each to acquire 100% of Drayton International’s equity. At the time of the announcement, Bragg CEO Matevž Mazij described the transaction as a strategic move to expand the company’s global footprint and strengthen investment in proprietary IP and technology.