Last week, Ontario-based NorthStar Gaming Holdings reported that it had entered a subscription agreement dated September 21, 2023, with Playtech plc. The latter, a leading brand in gambling technology, and a supplier of software and services to the company, will now purchase securities of the operator for an average purchase price of CA$10 million.
NorthStar owns and runs NorthStar Bets, which is an Ontario casino and sportsbook gambling platform which delivers a unique experience for local bettors. In addition to the best iCasino titles, it offers real-time news, statistics, analysis and scores in the betting environment. It also delivers managed services to spreads.ca, a gaming website of the Abenaki Council of Wolinak.
Terms of the Deal
Via the agreement, a total of 28,571,428 units will be issued at a price of CA$0.175 with each unit comprised of one share of the Ontario company. It also includes a half warrant to acquire common shares exercisable at CA$0.36 per full warrant and a further half warrant to get common shares exercisable at CA$0.40 per full warrant.
It was reported that proceeds from the offering will be used by NorthStar for its expansion into the rest of the country, after the acquisition of Slapshot and for general working capital initiatives. The closing of the proposed financing should be done by the end of October 2023. The deal is also subject to regulatory approvals from the TSX Venture Exchange.
Furthermore, members of the Ontario firm’s senior management and directors, along with the offering, will subscribe for up to 714,286 units at a price of CA$0.175 unit for aggregate gross proceeds of up to CA$125,000 and a convertible debenture in the aggregate principal amount of up to CA$125,000. The firm may also issue another CA$250,000 in units at a price of CA$0.175.
Lastly, each of the offering and the management subscription are related party transactions as such term defined in MI 61-101. Both are exempt from the valuation requirements of MI 61-101 under Section 5.5(b) of MI 61-101, and the management subscription is exempt from the minority shareholder approval requirements in MI 61-101 under Section 5.7(b) of MI 61-101.
Disclosing Q2 Numbers
A couple of weeks ago, NorthStar Gaming issued its financial numbers for the second quarter of 2023 and the six months ending on June 30, 2023. In Q2, the gaming leader disclosed wagers of CA$160.1 million, a 15% bump from the CA$139.5 million in Q1 of 2023. The handle transformed in gross gaming revenue of CA$5.5 million, which was a solid 26% improvement over the prior quarter.
Meanwhile, gaming revenue hit CA$4.6 million. In addition to that the firm’s report indicated that in Q2 of 2023, its operations highlighted a gross margin of CA$1.9 million, or 40% of gaming revenue. This was a rise of 61% over Q1 2023 when the gross margin reached 32% of the gaming proceeds.
Source: “NorthStar Enters into $10 Million Subscription Agreement with Playtech” NorthStar Gaming, September 22, 2023
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