The Intertain Group Limited Announces Closing of Its Qualifying
Transaction
TORONTO, ONTARIO--(Marketwired - Feb 11, 2014) - The Intertain
Group Limited (formerly Aumento Capital II Corporation) (the
"Company" or "Intertain") (TSX-VENTURE:AQT.P), a Capital Pool
Company, is pleased to announce that it closed its Qualifying
Transaction today (as such term is defined in Policy 2.4 of the
Corporate Finance Manual of the TSX Venture Exchange) involving the
amalgamation of Goldstar Acquisitionco Inc. ("Goldstar") with a
wholly-owned subsidiary of the Company, and the exchange of all of
the issued and outstanding securities of Goldstar for securities of
the Company (the "Amalgamation"). Pursuant to the terms of the
Qualifying Transaction, the Company consolidated its issued and
outstanding common shares on the basis of one new common share for
every 20 issued and outstanding, and issued 13,890,023 common
shares, 3,431,250 share purchase warrants (the "Warrants"), and
unsecured convertible debentures in the aggregate principal amount
of $17,500,000 (the "Debentures") in exchange for all of the issued
and outstanding securities of Goldstar. The Company also changed
its name to "The Intertain Group Limited."
The common shares of the Company are expected to be delisted
from the TSX Venture Exchange and relisted for the trading on the
Toronto Stock Exchange ("TSX") under the symbol "IT". In addition,
the Company also expects to list its convertible debentures on the
TSX under the symbol "IT.DB".
The Company's board of directors is now comprised of the
following individuals: John Kennedy FitzGerald, Mark Redmond, Stan
Dunford, John Fielding, Brent Choi, David Danziger, and Paul
Pathak. In addition, the board has appointed John Kennedy
FitzGerald as President and Chief Executive Officer, and Keith
Laslop as Chief Financial Officer.
James Walker has resigned as a director of the Company, and
David Danziger has resigned as President, Chief Executive Officer,
Secretary, and Chief Financial Officer of the Company.
Upon closing of the Qualifying Transaction, 1,183,463 options
were issued to incoming directors, officers, consultants and
employees of the Company, each having an exercise price of $4.00
per share for a period of five years, with such options vesting as
to 1/36th each month for a period of three years.
Prior to closing of the Qualifying Transaction, Goldstar
completed a private placement (the "Offering") of unit subscription
receipts (the "Unit Subscription Receipts") at a purchase price of
$4.00 per Unit Subscription Receipt and convertible debenture
subscription receipts (the "Debenture Subscription Receipts") at a
purchase price of $1,000 per Debenture Subscription Receipt.
Canaccord Genuity Corp. acted as sole bookrunner and lead agent
(the "Lead Agent") on behalf of itself and a syndicate of Agents,
including Cormark Securities Inc., Industrial Alliance Securities
Inc., Clarus Securities Inc., and Global Maxfin Capital Inc.
(collectively, the "Agents") in respect of the Offering. The net
proceeds from the Offering, after taking into consideration the
Agents' commissions and expenses, was approximately $61
million.
Upon completion of the escrow release conditions set out in the
subscription receipt agreement entered into among the Company,
Goldstar, and CST Trust Company on December 19, 2013 (the "Escrow
Release Conditions"), each Unit Subscription Receipt was
automatically exchanged for units of Goldstar (the "Goldstar
Units"), each Goldstar Unit consisting of one common share of
Goldstar and one quarter of one common share purchase warrant (the
"Goldstar Warrants") with each whole Goldstar Warrant being
exercisable by the holder for one common share of Goldstar at an
exercise price of $5.00 per share until December 31, 2015, and each
Debenture Subscription Receipt issued was automatically exchanged
for one debenture of Goldstar (the "Goldstar Debentures"), and 30
Goldstar Warrants for each such Goldstar Debenture so issued. The
Goldstar Debentures accrue interest at a rate of 5.0% per annum,
payable semi-annually in arrears on June 30, and December 31 in
each year, commencing on June 30, 2014. A total of 11.625 million
Goldstar Units and 17,500 Goldstar Debentures were issued upon
satisfaction of the Escrow Release Conditions.
Upon completion of the Amalgamation today, the common shares of
Goldstar were exchanged for common shares of the Company, the
Goldstar Warrants were exchanged for Warrants having substantially
the same terms and conditions as the Goldstar Warrants, and the
Goldstar Debentures were exchanged for Debentures having
substantially the same terms and conditions as the Goldstar
Debentures.
Proceeds from the Offering were used to fund the acquisition by
Goldstar of all of the issued and outstanding common shares of
WagerLogic Malta Holding Ltd. ("WagerLogic") from a subsidiary of
Amaya Gaming Group Inc. ("Amaya") (TSX: AYA) for consideration of
$70 million (the "WagerLogic Acquisition") pursuant to the terms of
a Share Purchase Agreement dated November 27, 2013 (the "Share
Purchase Agreement"). The WagerLogic Acquisition was completed
today through the payment of $60 million cash and the issuance of a
$10 million vendor take-back in the form of a promissory note,
bearing interest at 6.0% per annum payable semi-annually in arrears
beginning in the second year following its issuance and maturing on
the fourth anniversary of its issuance.
The Share Purchase Agreement provides for a bonus payment of USD
$10,000,000 if CryptoLogic Operations Limited ("CryptoLogic
Operations"), the wholly-owned operating subsidiary of WagerLogic,
achieves a net revenue target of USD $30,000,000 during the second
year following closing (payable in 12 monthly instalments during
the third year following closing), and a bonus payment of USD
$10,000,000 if CryptoLogic Operations achieves a net revenue target
of USD $40,000,000 during the third year following closing (payable
in 12 monthly instalments during the fourth year following
closing).
CryptoLogic Operations is an online casino operator through its
"Inter" brand consisting of InterCasino™, InterPoker™, and
InterBingo™, amongst other online names (the "InterCasino
Business"). Revenue and net income of the InterCasino Business were
USD $8.0 million and USD $1.8 million respectively for the nine
month period ended September 30, 2013. Revenue and net income for
the full year 2012 were USD $17.2 million and US$5.8 million
respectively.
Subsidiaries of Amaya (the "Service Providers") will continue to
supply CryptoLogic Operations with software, services and content
to power the InterCasino Business pursuant to a number of service
agreements. Amaya and its Service Providers have entered into a
Revenue Guarantee Agreement, under which they jointly and severally
guarantee the financial obligations of the Service Providers under
the service agreements, including an obligation to pay CryptoLogic
Operations, during the next two years, an amount equal to the
shortfall between CryptoLogic Operation's quarterly net revenue and
a pre-established quarterly net revenue target of USD
$4,750,000.
Intertain's President and CEO said "We are excited today to have
completed the acquisition of WagerLogic from Amaya and look forward
to the commencement of trading of The Intertain Group on the TSX.
The InterCasino brand is one of the first brands in online gaming
and provides an excellent launch pad for future growth".
DISCLAIMERS
The TSX Venture Exchange Inc. has in no way passed judgment
upon the merits of the proposed Transactions and has neither
approved nor disapproved the contents of this press
release.
Certain statements included herein, including those that
express expectations or estimates by Intertain of its future
performance constitute "forward-looking statements" within the
meaning of applicable securities laws. Forward-looking statements
are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by Intertain at this time, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. Investors are
cautioned not to put undue reliance on forward looking statements.
Except as required by law, Intertain does not intend, and undertake
no obligation, to update any forward-looking statements to reflect,
in particular, new information or future events.
The Intertain Group LimitedKeith LaslopCFO+44 208 123
5558klaslop@intertain.com
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