NorthStar Gaming has officially entered into a subscription agreement with Playtech, with closure of the $10m offer expected to occur by the end of October 2023.
The Ontario-based casino and sportsbook gaming platform first announced a proposed financing of at least $10m back in August, with Chair and CEO Michael Moskowitz highlighting the importance of strengthening the firm’s balance sheet in order to support the growth of the NorthStar Bets brand.
“We are very excited about our expansion outside of Ontario starting this fall, made possible by the Slapshot Media acquisition we completed in the second quarter and the offering,” he said at the time.
Earlier this month, Playtech CEO Mor Weizer also shared his excitement over NorthStar, whom his firm have had a strategic partnership with since January 2022, and with whom it finalized a strategic investment earlier this year.
NorthStar subsequently entered into a subscription agreement with Playtech last Thursday, September 21, in which it provides for the issuance of 28,571,428 units at a price of $0.175 per unit, with each unit comprised of one common share of the company, and a half warrant to acquire common shares exercisable at $0.36 per full warrant and a further half warrant to acquire common shares exercisable at $0.40 per full warrant, in each case for a period of five years.
The deal also includes a three-year 8% unsecured convertible debenture in the aggregate principal amount of $5m converting into common shares at $0.20 per share with interest payable-in-kind. Proceeds from the offering will be utilized to fund NorthStar’s expansion into the rest of Canada, and for general working capital purposes.
Additionally, it is expected that members of the company’s senior management and directors will, concurrently with the offering, subscribe for up to 714,286 units at a price of $0.175 per unit for aggregate gross proceeds of up to $125,000, and a convertible debenture in the aggregate principal amount of up to $125,000.
The company may also issue a further $250,000 in units at a price of $0.175 per unit and $250,000 aggregate principal amount in convertible debentures to arm’s length parties.
Meanwhile, NorthStar is seeking an exemption from the Ontario Securities Commission and the TSXV from the requirement to hold a shareholders’ meeting to approve the offering and instead obtain written approval from holders of a majority of the common shares (excluding Playtech and management) in accordance with Section 9.1 of MI 61-101 and the policies of the TSXV.
If the exemptions are not granted, a shareholders’ meeting will be called and closing of the offering may be delayed.