Poydras Gaming arranges $11.5-million equity financing

2015-04-14 10:02 ET - News Release

Mr. Peter Macy reports
POYDRAS GAMING FINANCE CORP. ANNOUNCES CAD $11.5MM EQUITY FINANCING
Poydras Gaming Finance Corp. has entered into an equity financing, whereby Poydras will raise up to $11.5-million through a combination of private placement financing and short-form prospectus offering. The common shares of the Company will be issued at CAD $0.07 per share, and are subject to a statutory four-month hold from the date of issuance. Funds will be used to fund the Company's 600 machine placement with Tonkawa Tribe of Indians of Oklahoma (see news release dated January 13, 2015) and the cash portion of the purchase price for its acquisition of the Integrity Companies (see news releases dated September 29, 2014 and March 2, 2015), as well as for general working capital purposes.

Poydras will raise up to CAD $4.5 million through the private placement offering, from a combination of US and Canadian investors. As of April 13, 2015, equity subscription agreements have been executed for CAD $2.0 million. Closing of the private placement is expected on or around April 17, 2015. Poydras will raise the remaining CAD $7.0 million through a short form prospectus offering, which is expected to close prior to May 15, 2015. The Company will also enter into a one year fiscal advisory agreement with GC-Global Capital Corp. ("GC-Global") whereby Poydras will receive strategic financial advisory services in exchange for a monthly fee of CAD $20,000. There will be no change of control as a result of the financing. "We are excited to announce this financing as it provides us with the capital to fund both the placement of 600 machines with the Tonkawa Tribe of Indians of Oklahoma and the acquisition of the Integrity Companies, adding approximately USD $15 million in estimated annual revenue for the Company," said Peter Macy, CEO of Poydras. "This financing will give Poydras the financial flexibility to aggressively pursue our growth strategy." The financing is subject to TSX Venture Exchange approval.

Tonkawa and Integrity Transactions:
Poydras management also expects to close its previously announced acquisition of the Integrity Companies within the next 30 days subject to certain conditions including completion of an audit of the Integrity Companies, the approval of the TSX Venture Exchange and the consent of applicable gaming regulatory authorities. Under the terms of an agreement with the Tonkawa Tribe of Indians of Oklahoma, Poydras and Integrity will provide 600 Class III gaming machines under a 6-year and 11-month contract which is expected to generate approximately USD $6 million in annual revenue for Poydras. Under the terms of the agreement, Poydras and Integrity will take over floor space and games currently leased directly by a number of machine vendors including, IGT, Scientific Games (WMS and Bally), Aristocrat, Konami, Ainsworth and Aruze. Poydras announced its initial acquisition of 105 revenue generating games on March 2, 2015 and expects to have completed purchase and financing agreements for substantially all of the remaining 495 Class III gaming machines by the end of April.Upon closing of the acquisition of the Integrity Companies and the placement of machines with the Tonkawa Tribe of Indians of Oklahoma, Poydras will have over 2,500 machines under participation leases with 26 casinos.