and proposes a directed conversion issue of ca 7.2 MSEK
THIS PRESS RELEASE MAY NOT BE MADE PUBLIC, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN OR INTO
The Board of Directors of
Summary of the Rights Issue
- A person who on the record date of
20 May 2024 is registered as a shareholder ofJumpgate in the share register kept byEuroclear Sweden AB will receive one (1) subscription right for each share held in the Company. One hundred (100) subscription rights entitle the holder to subscribe for ninety-nine (99) new issued shares. -
The Rights Issue entails an issue of maximum 476 464 626 shares at a subscription price of
0.06 SEK per share. -
Fully subscribed, the Rights Issue will contribute ca 28.6 MSEK to
Jumpgate before transaction costs. -
The final day of trading in the Company's shares with the right to receive subscription rights is
16 May 2024 , and the first day of trading in the Company's shares without the right to receive subscription rights is17 May 2024 . -
The subscription period for the Rights Issue runs from
22 May 2024 until and including5 June 2024 . -
Subscription rights that are not exercised during the subscription period become invalid and lose their value. Trading in subscription rights takes place on NGM Nordic SME during the period
22 May 2024 to31 May 2024 . -
Trading in paid and subscribed shares ("BTA") takes place on NGM Nordic SME during the period from
22 May 2024 until the Rights Issue has been registered with Bolagsverket, expected to happen around week 26, 2024. - The Rights Issue is 100 percent covered by subscription commitments, subscription intents, and guarantee commitments. Subscription commitments and subscription intents comprise ca 6.5 MSEK, equivalent of ca 22.7 percent of the Rights Issue, The Bottom Guarantee comprises ca 16.4 MSEK, equivalent of ca 57.3 percent of the Rights Issue, and the Top Guarantee comprises ca 5.7 MSEK, equivalent of 20 percent of the Rights Issue.
-
Full terms and conditions for the Rights Issue as well as other information about the Company will be described in the Information Memorandum, which is expected to be published around
22 May 2024 (the "Memorandum"). - Current shareholders in the Company who do not subscribe for shares in the Rights Issue will get their shareholding diluted. Fully subscribed, the Rights Issue provides a dilution equivalent of ca 50 percent, based on the number of shares in the Company after the Rights Issue.
Background and reason for the Rights Issue
With the purpose of financing the final part of the consideration for the acquisition of Nukklear, to enable the amortization of a part of the Company's interest bearing debt and to strengthen the Company's Working Capital the Board of Directors have resolved to carry out the Rights Issue. The proceeds from the Rights Issue in combination with the sale of the free-to-play mobile game portfolio is partly intended to be used for reducing the Company's debt level significantly and the interest bearing debt is calculated to amount to 11 MSEK following the Rights Issue.
Fully subscribed, the Rights Issue contributes ca 28.6 MSEK in gross proceeds to
- Additional consideration for the acquisition of Nukklear (52 %)
- Amortization of interest-bearing debt (10 %)
- Working Capital such as development, sales, marketing and production (38 %)
"We see continued great potential in our strategy to build a stable base of revenue based on co-development and work-for-hire, where we add significant upside at successful launches in a number of game projects. Despite very challenging market conditions during 2023 and the beginning of 2024, we have, in addition to cost effectivization, also focused on developing the Company and positioning ourselves for a turnaround in the market. Now, we have already signed several important agreements during 2024 and we see positive tendences signalling a normalization of the gaming market. We are proud and happy over the support from current as well as incoming owners. Through the financing, we are able to fulfil our obligations related to the Nukklear acquisition and strengthen our balance sheet significantly. With reduced financial risk, lowered capital costs and additional working capital, we are in a considerably better position to execute the Company's growth plan. We are hoping that as many as possible of our current shareholders participate in the share issue and look forward to follow up with additional important steps forward in the coming months".
Subscription commitments, subscription intents and guarantee commitments
The guarantee commitments consist of the Bottom Guarantee comprising ca 16.4 MSEK, equivalent of ca 57.3 percent of the Rights Issue, as well as the Top Guarantee comprising ca 5.7 MSEK, equivalent of 20 percent of the Rights Issue. Through the Bottom Guarantee, provided that subscription takes place for an amount at least corresponding to the subscription commitments and subscription intents, 80 percent of the proceeds of the Rights Issue is secured. Furthermore, a number of current shareholders and external investors have entered into agreements for a Top Guarantee comprising ca 5.7 MSEK, equivalent of 20 percent of the Rights Issue. Through the Top Guarantee, provided that subscription takes place for an amount at least corresponding to the subscription commitments, subscription intents and the Bottom Guarantee, 100 percent of the proceeds of the Rights Issue is secured.
For the Bottom Guarantee, there is a guarantee fee of fourteen (14) percent of the guaranteed amount paid in new issued shares in the Company. For the Top Guarantee, there is a guarantee fee of twenty (20) percent of the guaranteed amount paid in new issued shares in the Company. No fee is attributable to subscription commitments or subscription intents. Neither the subscription commitments, subscription intents or guarantee commitments are secured by bank guarantee, escrow funds, pledging or similar arrangements.
Preliminary time plan for the Rights Issue
Last trading day including the right to receive subscription rights | |
First trading day excluding the right to receive subscription rights | |
Record date for participation in the Rights Issue | |
22 May - | Trading in subscription rights at NGM Nordic SME |
22 May - | Subscription period |
Trading with paid and subscribed shares "BTA" will take place at NGM Nordic SME from 22 May until the Rights Issue has been registered at the Swedish Companies Registration Office, expected to take place around week 26 2024. | |
Publication of preliminary outcome of the Rights Issue |
Background and reason for the Conversion Issue
To secure the Company's need for liquidity and to continue the development of current game projects,
The Board of Directors reason for deviating from the shareholders' preferential rights
Ahead of the Conversion Issue, the Company's board of directors have done an analysis of different financing options and as part of this have contemplated carefully the possibility to raise additional capital through the Rights Issue. The conclusion of this analysis is that the Conversion Issue, objectively, is the most advantageous alternative for the Company and its shareholders. The reasons for this, and why the deviation from the shareholders' preferential rights, is the following:
- A Rights Issue for an amount over 2.5 MEUR had required a prospectus to be issued, adding additional complexity, demanded more time from the Company and provided increased costs. Furthermore, such a rights issue would not have been possible to carry out until after the summer, providing a risk that a negative share price development during the process, especially given the current volatile and challenging market conditions.
- Repaying the debt with the liquidity from the Rights Issue would have hindered the Company from executing the activities fully that the proceeds are allocated to.
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The main part of the Conversion Issue is subscribed for by directors, executives, larger shareholders and persons engaged with
Jumpgate . A conversion of the debt will further strengthen their long-term engagement with the Company and increase their incentive while strengthening the shareholder base further.
Based on the above, the board of directors is of the opinion that, after weighing the alternatives, the Conversion Issue is the most advantageous option for further strengthening the Company's balance sheet while retaining the most value in
Extraordinary general meeting
Some of the person eligible for subscribing in the Conversion Issue are subject to chapter 16 of the Swedish Companies Act (the so called Leo-legislation) meaning that the Conversion Issue is subject to approval by a general meeting with a majority of at least nine tenths of the given votes as well as the shares represented at the general meeting. Notice to the extraordinary general meeting will be announced through a separate press release.
Change of share capital, number of shares and dilution
The Rights Issue entails that the number of shares in
Provided that the Rights Issue is fully subscribed and the Conversion Issue is carried out, the number of shares in
Changed announcement date for the Company's quarterly report for the first quarter of 2024
Because of the coming Rights Issue, the Board of Directors of
Advisors
Important Information
Publication, release or distribution of this press release may in certain jurisdictions be subject to legal restrictions and persons in the jurisdictions where this press release has been made public or distributed should be informed of and follow such legal restrictions. The recipient of this press release is responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer or solicitation to buy or subscribe for any securities in
There is no intention to register any securities mentioned herein in
Forward-looking statements
This press release contains forward-looking statements related to the Company's intentions, estimates or expectations with regard to the Company's future results, financial position, liquidity, development, outlook, estimated growth, strategies and opportunities as well as the markets in which the Company is active. Forward-looking statements are statements that do not refer to historical facts and can be identified by the use of terms such as "believes," "expects," "anticipates," "intends," "estimates," "will," "may," "implies," "should," "could" and, in each case, their negative, or comparable terminology. The forward-looking statements in this press release are based on various assumptions, which in several cases are based on further assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, there is no guarantee that they will occur or that they are correct. Since these assumptions are based on assumptions or estimates and involve risks and uncertainties, actual results or outcomes, for many different reasons, may differ materially from those what is stated in the forward-looking statements. Due to such risks, uncertainties, eventualities and other significant factors, actual events may differ materially from the expectations that expressly or implicitly are contained in this press release through the forward-looking statements. The Company does not guarantee that the assumptions which serve as a basis for the forward-looking statements in this press release are correct, and each reader of the press release should not rely on the forward-looking statements in this press release. The information, opinions and forward-looking statements that expressly or implicitly are stated herein are provided only as of the date of this press release and may change. Neither the Company nor any other party will review, update, confirm or publicly announce any revision of any forward-looking statement to reflect events that occur or circumstances that arise with respect to the contents of this press release, beyond what is required by law or NGM Nordic SME's rules for issuers.
Potential investors should not put undue faith in the forward looking information herein, and potential investors are strongly encouraged to read the parts of the information memorandum including a more detailed description of factors that may impact the Company's activities and the market where the Company operates.
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About the Company
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