Finance

Newgioco aims to raise $9.2m through share issue

2 minutes read
Sports betting and igaming operator and supplier Newgioco aims to raise net proceeds of at least $9.2m through a share offering in order to repay outstanding debts as well as to accumulate working capital and or general corporate purposes.

Sports betting and igaming operator and supplier Newgioco aims to raise net proceeds of at least $9.2m through a share offering in order to repay outstanding debts as well as to accumulate working capital and or general corporate purposes.

The business will offer 3,623,188 units – consisting of one ordinary share and one warrant to purchase a share for $3.45 per share in the next five years – at a price of $2.76 per unit. The business may opt to increase or decrease the number of units sold or the price offered.

The unit price is set based on the price of a Newgioco share at the close of Nasdaq Capital Market trading on 23 July, while the warrant purchase price is set at 125% of this figure.

The target of $9.2m is based purely on the sales of the shares themselves rather than the warrants, as these may never be exercised. Should they be exercised, they may raise up to an additional $11.5m before costs, bringing the overall funds raised above $20m.

Newgioco said it will use around $2.9m of this figure towards paying off $2.4m in principal amounts and $443,000 in interest toward its debts, which carry interest of 10% per year. The remaining funds will go towards “working capital and general corporate purposes”.

The business added that it will have “significant flexibility” in how it spends the funds.

“The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business,” it said. “Pending their use, we intend to invest the net proceeds of this offering in a variety of capital-preservation investments, including short-and intermediate-term, interest-bearing, investment-grade securities and government securities.”

Last week, Newgioco reported a year-on-year rise in revenue for the first quarter, while thebusiness was also able to return to a net profit during the period. Net gaming revenue for the three months through to 31 March amounted to $10.2m (£8.0m/€8.8m), representing an increase of 9.7% from $9.3m in the corresponding period in 2019.

Publication of the quarterly results comes after Newgioco was earlier this month issued a warning by the Listing Qualifications Department of the Nasdaq stock exchange after it failed to file the results in time.

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