Globe & Mail 07:43 AM EDT, 06/03/2022 (MT Newswires) -- Enthusiast Gaming Holdings Inc. (NASDAQ and TSX:EGLX) on Friday said it has settled certain deferred and earn-out payments in connection with its acquisitions of Addicting Games, Inc. Outplayed Inc. and Vedatis SAS by issuing 16.2 million common shares at an implied weighted average value of US$2.47 apiece.
The gaming entertainment company said the deferred and earn-out payments represented a total liability of more than US$40 million for the company to be paid over a period lasting until December 2023. The Vedatis payment of 750,000 euros was due in May and the first Addicting Games payment of US$7 million is due in September, it said.
Enthusiast Gaming said negotiations for these payments resulted in certain changes in the purchase agreements for Addicting Games and Outplayed. It settled the obligations in respect of Vedatis as per the original terms.
John Albright, Lead Director of Enthusiast Gaming, said both Addicting Games and Outplayed decided to convert what could have been a cash obligation into common shares of Enthusiast Gaming. This shows their confidence in the company, he said.
Enthusiast Gaming also said that it has offered a dissident shareholder, Greywood Investments, LLC, an option to acquire up to 1.66 million shares on a private placement basis at a price of C$2.91 apiece to maintain its pro rata interest after giving effect to the announced share issuances.
In addition, Enthusiast Gaming said it has received approval from the Toronto Stock Exchange to hold its 2022 annual meeting by Aug. 30 to allow sufficient time for the company to review and respond to Greywood's proposals. As a result, the company's board of directors has postponed the annual meeting of shareholders to July 19.