Canadian gaming technology and content provider Bragg Gaming Group announced that the business has secured $8.7 million from Lind Global Fund II after signing an investment agreement with the entity managed by The Lind Partners.
Net Proceeds of $8.2 million
The fund managed by the New York-based institutional fund manager will provide the funding to Bragg Gaming in the form of an $8.7 million convertible security with a face value of $10 million of which the Toronto Stock Exchange (TSX)-listed B2B tech supplier will receive net proceeds of approximately $8.2 million after fees.
Bragg Gaming’s chief executive officer Yaniv Sherman appreciated the “confidence demonstrated by Lind,” a fund that has been supporting growth companies for more than a decade, excited at the opportunity for growth the new capital will bring to Bragg Gaming to affirm its position and continue delivering on its strategic initiatives.
With a 24-month maturity, the convertible security will either be paid in cash or converted into Bragg Gaming common shares at a conversion price of 87.5% of its five-day volume-weighted average price before the execution date of each conversion, once past the maturity date, while shares issued upon conversion will enter a 121-day lock-up period following the deal close.
Phillip Valliere, managing director at The Lind Partners, outlined the rapid growth at Bragg Gaming as a gaming technology business and the company’s ongoing global expansion, excited and eager to start working with Bragg’s “high-caliber management team” and support the team’s initiatives to drive further profitability while penetrating new gaming markets.
Conversion Restrictions and Accelerations
Under the terms of the funding agreement, there are restrictions on how much of the convertible security may be converted in any particular month, with the limit being placed on 1/20 of the outstanding balance or $1 million if the exchange volume is above a predetermined minimum. Under certain circumstances, conversions may be also accelerated.
In the case of Bragg executing its option to buy back the entire remaining balance of the convertible security which it is entitled to at any time, Lind will have the right to a partial conversion of up to 1/3 of the outstanding amount into shares.
As part of the agreement, Lind will be issued a warrant for the purchase of up to 979,048 common Bragg shares at C$9.28 per share for a period of 60 months, while the funding is secured against assets of the group.
The closing of the funding agreement that has been conditionally approved by the TSX, as well as the approval of the issuance of securities, will be subject to other customary closing conditions and the final approval of the exchange.
Last month, Bragg gaming Group posted impressive results for the second business quarter of 2022 and raised its full-year revenue guidance.