TORONTO, March 3, 2023 – NorthStar Gaming Holdings Inc. (the “Company”), formerly Baden Resources Inc., is pleased to announce that, further to its press release dated June 30, 2022, it has completed the business combination (the “Business Combination”) with NorthStar Gaming Inc. (“NorthStar”) involving the amalgamation of NorthStar and a wholly owned subsidiary of the Company.
The Business Combination resulted in, among other things, (i) the reverse takeover of the Company by the former security holders of NorthStar, (ii) the Company changing its name to “NorthStar Gaming Holdings Inc.”, (iii) the de-listing of the Company’s common shares from the Canadian Stock Exchange (“CSE”) and (iv) the expected listing of the Company’s common shares on the TSX Venture Exchange (the “TSX-V”).
A Form 2B listing application dated March 3, 2023 (the “Listing Application”) in respect of the Company has been prepared in accordance with the requirements of the TSX-V and will be filed under the Company’s profile on SEDAR at www.sedar.com later today. It is anticipated that the Company’s common shares will commence trading on the TSX-V on during the week of March 6, 2023 under the symbol “BET”. The Company will issue an updated release upon the issuance of the trading bulletin by the TSX-V confirming the trading date.
“The public listing of NorthStar represents a significant milestone and we’re pleased to now provide consumers with the opportunity to become shareholders,” said Michael Moskowitz, Chief Executive Officer and a founding partner of NorthStar. “As an organization, we’re focused on executing our strategic vision to grow our iGaming market share across the province of Ontario while also looking ahead to the future with the goal of reaching other markets.”
Prior Financings
On December 19, 2022, NorthStar completed a non-brokered private placement of unsecured convertible debentures (the “Debenture”) with Playtech plc (“Playtech”) for gross proceeds of C$12.25M. The Debenture was converted into units of NorthStar at a price of C$0.50 per unit in accordance with its terms immediately prior to completion of the Business Combination and the securities issued on such conversion were exchanged pursuant to the Business Combination into 24,500,000 Company common shares, 12,250,000 warrants to acquire Company common shares exercisable at C$0.85 until March 3, 2028 and 12,250,000 warrants to acquire Company common shares exercisable at C$0.90 until March 3, 2028.
On September 9 and October 3, 2022, NorthStar completed a brokered private placement of subscription receipts (“Subscription Receipts”) for aggregate gross proceeds of C$5.075M at a price of C$0.50 per subscription receipt, in addition to a non-brokered subscription by Torstar Corporation for 50,000 preferred shares in NorthStar for gross proceeds of C$5.0M. The Subscription Receipts were exchanged for 10,150,000 Company common shares as part of the Business Combination and the preferred shares held by Torstar Corporation were exchanged for the same number of preferred shares in the capital of the Company.
Early Warning Disclosure Regarding Playtech
Immediately prior to the closing of the Business Combination, Playtech did not beneficially own, directly or indirectly, or exercise control or direction over, any Company common shares or any securities convertible into or exercisable for Company common shares. Immediately following the completion of the Business Combination, Playtech now owns 24,500,000 Company common shares, 12,250,000 warrants to acquire Company common shares exercisable at C$0.85 until March 3, 2028 and 12,250,000 warrants to acquire Company common shares exercisable at C$0.90 until March 3, 2028, representing approximately 15.65% of the issued and outstanding Company common shares on a non-diluted basis and 31.31% on a partially diluted basis.
Playtech acquired the securities of the Company as part of a strategic investment in the Company. Playtech intends to review its investment in the Company on a continuing basis and may, from time to time and at any time, and depending on market and other conditions, acquire or dispose of the Company’s equity or debt securities or instruments through open market transactions, private placements and other privately negotiated transactions, or otherwise (including through exercising rights provided to Playtech in the Investor Rights Agreement dated December 19, 2022 between Playtech and the Company (the “Investor Rights Agreement”) and in the Registration Rights Agreement dated December 19, 2022 between Playtech and the Company (the “Registration Rights Agreement”), in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions Playtech deems appropriate.
The Investor Rights Agreement provides Playtech with the right to nominate up to four individuals to the Company’s board of directors, based on Playtech’s ownership interest in the Company. As at the date hereof, Playtech is entitled to nominate one (1) individual to be a director of the Company. The Investor Rights Agreements also includes customary participation and top-up rights in favour of Playtech, in the event of a proposed distribution or issuance of Company common shares or other securities convertible or exchangeable into Company common shares (other than stock options or other securities issued under security based compensation arrangements with respect to the participation right), in order that Playtech may continue to maintain its pro rata equity ownership interest in Company. The Registration Rights Agreement provides Playtech with customary prospectus qualification and registration rights, as well as piggyback distribution rights.
For a summary of the rights of Playtech under the Investor Rights Agreement and the Registration Rights Agreement, see the Form 2B – Listing Application dated March 3, 2023, which will be available under the Company’s profile on SEDAR at www.sedar.com. Copies of the Investor Rights Agreement and Registration Rights Agreement will also be made available under the Company’s SEDAR profile.
The Company common shares and the Company warrants held by Playtech are subject to a surplus security escrow agreement in accordance with TSX-V Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions of the TSX-V (the “Escrow Agreement”). The Escrow Agreement well be available on the Company’s SEDAR profile.
Playtech is a company existing under the laws of the Isle of Man with a registered address of Ground Floor, St George’s Court, Upper Church Street, Douglas, Isle of Man, IM1 1EE. Founded in 1999 and premium listed on the Main Market of the London Stock Exchange, Playtech is a technology leader in the gambling industry with over 7,000 employees across 20 countries. Playtech is the gambling industry’s leading technology company delivering business intelligence driven gambling software, services, content and platform technology across the industry’s most popular product verticals, including, casino, live casino, sports betting, virtual sports, bingo and poker.
An early warning report will be filed by Playtech under applicable Canadian securities laws and once filed will be available under the Company’s SEDAR profile. A copy of such report may also be obtained by contacting Sandeep Gandhi, Head of Investor Relations, Playtech, at +44 (0)1624 645954 or ir@playtech.com.
Early Warning Disclosure Regarding 1135531 Ontario Inc.
In connection with the Business Combination, 1135531 Ontario Inc. (“531”), together with its joint actors, Torstar Corporation (“Torstar”) and Torstar Holdings Inc., acquired beneficial ownership of, or control or direction over, 36,004,922 Company common shares, representing approximately 23.0% of the total number of Company common shares issued and outstanding upon completion of the Business Combination, and 66,300 Company preferred shares, representing approximately 85.0% of the total number of Company preferred shares issued and outstanding upon completion of the Business Combination. Prior to the Business Combination, 531, together with its joint actors, did not have beneficial ownership of, or control or direction over, any securities of the Company.
Pursuant to a conversion rights agreement between Torstar, the Company and certain third parties dated Mach 3, 2023, Torstar has conversion rights in respect of 42,500 of the company preferred shares held by Torstar (the “Conversion Rights”). If Torstar were to exercise its Conversion Rights in full as of the date hereof, 531, together with its joint actors, would acquire beneficial ownership of, or control or direction over, an additional 5,666,666 Company common shares. As a result of such exercise, 531, together with its joint actors, would have beneficial ownership of, or control or direction over, 41,671,589 Company common shares, representing approximately 25.7% of the then-issued and outstanding Company common shares on a partially diluted basis. Further information with respect to the Conversion Rights can be found in the Early Warning Report (as defined herein), which will be available on the Company’s issuer profile on SEDAR at www.sedar.com.
531, together with its joint actors, acquired the aforementioned securities as a result of the completion of the Business Combination, and hold such securities for investment purposes without any current intentions to increase or decrease their beneficial ownership or control or direction over any additional securities of the Company. The Company common shares and the Company preferred shares held by 531, together with its joint actors, are also subject to the Escrow Agreement. Upon release of the Escrowed Securities from escrow pursuant to the Escrow Agreement, 531, together with its joint actors, may, from time to time and depending on market and other conditions, acquire additional Company common shares, Company preferred shares or other securities of the Company in the open market or otherwise, and reserve the right to dispose of any or all of the securities in the open market or otherwise at any time and from time to time.
This portion of this news release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires an early warning report to be filed by 531, together with its joint actors, with the applicable securities regulators containing additional information with respect to the foregoing matters (the “Early Warning Report”). A copy of the Early Warning Report will be available on the Company’s SEDAR profile.
531 is a corporation existing under the laws of the Province of Ontario with an office located at 99 Blue Jays Way, 300, Toronto, Ontario, Canada, M5V 9G9. To obtain a copy of the Early Warning Report, contact Christopher Rankin at 416-367-2000.
Early Warning Disclosure Regarding Tevir Capital LP Ltd. and Rivett Capital Syndicate Inc. (collectively, the “Tevir Entities”)
Immediately prior to the closing of the Business Combination, the Tevir Entities did not beneficially own, directly or indirectly, or exercise control or direction over, any Company common shares or any securities convertible into or exercisable for Company common shares. Immediately following the completion of the Business Combination, the Tevir Entities and their joint actors now own 36,005,548 Company common shares representing approximately 23.00% of the issued and outstanding Company common shares on a non-diluted basis and 17.70% on a fully diluted basis.
The Tevir Entities acquired the securities of the Company as part of a strategic investment in the Company. The Tevir Entities intend to review their investment in the Company on a continuing basis and may, from time to time and at any time, and depending on market and other conditions, acquire or dispose of the Company’s equity or debt securities or instruments through open market transactions, private placements and other privately negotiated transactions, or otherwise (including through exercising rights provided to the Tevir Entities in the Investor Rights Agreement dated February 8, 2023 between the Tevir Entities and the Company (the “IRA”) and in the Registration Rights Agreement dated February 8, 2023 between the Tevir Entities and the Company (the “RRA”), in each case, depending on a number of factors, including general market and economic conditions and other factors and conditions the Tevir Entities deem appropriate.
The IRA provides the Tevir Entities with the right to nominate up to four individuals to the Company’s board of directors, based on the Tevir Entities’ ownership interest in the Company. As at the date hereof, the Tevir Entities are entitled to nominate two (2) individuals to be directors of the Company. The IRA also includes customary participation and top-up rights in favour of the Tevir Entities, in the event of a proposed distribution or issuance of Company common shares or other securities convertible or exchangeable into Company common shares (other than stock options or other securities issued under security based compensation arrangements with respect to the participation right), in order that the Tevir Entities may continue to maintain their pro rata equity ownership interest in Company. The RRA provides the Tevir Entities with customary prospectus qualification and registration rights, as well as piggyback distribution rights.
For a summary of the rights of the Tevir Entities under the IRA and the RRA, see the Form 2B – Listing Application dated March 3, 2023, which will be available under the Company’s profile on SEDAR at www.sedar.com. Copies of the IRA and RRA will also be made available under the Company’s SEDAR profile.
The Company common shares held by the Tevir Entities and their associates and affiliates are also subject to the Escrow Agreement.
An early warning report will be filed by the Tevir Entities under applicable Canadian securities laws and once filed will be available under the Company’s SEDAR profile. A copy of such report may also be obtained by contacting Paul Rivett, Principal, at 416-702-9127.
For more information on the Company, please visit www.northstargaming.ca or visit www.northstarbets.ca to register for the online casino and sportsbook platform.
About NorthStar Gaming
NorthStar Gaming proudly owns and operates NorthStar Bets, a made-in-Ontario casino and sportsbook gaming platform that provides players with a uniquely local, premier user experience. The NorthStar Bets sportsbook provides real-time news, stats, analysis and scores directly in the betting environment along with the most popular online casino games.
A Canadian company, NorthStar Gaming is uniquely positioned to become a convergence leader in the intersection of sports media and sports wagering thanks to its partnerships and agreements with leading media companies. NorthStar Gaming is committed to operating at the highest level of responsible gaming standards and to ensuring local players’ entertainment dollars stay in the province of Ontario and other regulated jurisdictions as they develop. The Company’s registered address is Suite 503 – 905 West Pender Street, Vancouver, B.C. V6C 1H2 and its principal place of business is located at 40 University Avenue, Suite 507, Toronto, Ontario, M5J 1T1.
Forward-Looking Information
This communication contains “forward-looking information” within the meaning of applicable securities laws in Canada. Forward-looking information may relate to future events or future performance of the Company. All statements in this communication, other than statements of historical facts, with respect to the Company’s objectives and goals, as well as statements with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions, are forward-looking information. Specific forward-looking statements in this communication include, but are not limited to: the listing of the Company’s common shares on the TSX-V; the filing of the Listing Application; expectations regarding certain of the Company’s future results, including, among other things, revenue, expenses, revenue growth, capital expenditures, and operations; risk factors relating to national or international economies (including the impact of COVID-19), and other risks present in the jurisdictions in which the Company, its customers, its partners operate and; statements with respect to expected use of cash balances; continuation of prudent management of working capital; source of funds for ongoing business requirements and capital investments; expectations regarding sufficiency of the allowance for uncollectible accounts; analysis regarding sensitivity of the business to changes in exchange rates; impact of recently adopted accounting pronouncements; risk factors relating to intellectual property protection and intellectual property litigation; and expectations concerning any remediation efforts to the Company’s design of its internal controls over financial reporting and disclosure controls and procedures. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this discussion and analysis should not be unduly relied upon. Information contained in forward-looking statements in this communication is provided as of the date hereof and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information or future events or results, except to the extent required by applicable securities laws.
For further information:
NorthStar Gaming
Ben Powell
VP Corporate Development