ESE Entertainment Inc. (TSX-V: ESE) has announced the closing of the second tranche of its private placement of convertible notes for gross proceeds of $ 679,000 through the issuance of 679 units at a price of $ 1,000 per unit.
Between the first tranche and the second tranche, the company has issued a total of 1,605 units for aggregate gross proceeds of $ 1,605,000, which it intends to use to fund acquisitions, for business development and as general working capital, ESE said.
Each unit is composed of $ 1,000 in principal amount of an unsecured convertible note and 313 common share purchase warrants of the company, which will mature 24 months from the date of issuance. Interest on each note is 10% per annum and will be paid quarterly from June 30, 2022.
The entire principal amount of each note may be converted into common shares in the company at a price of $ 1.60 per common share at any time before the maturity date. Subject to prior approval of the TSX Venture Exchange, the accrued but unpaid interest may also be converted into common shares at a price equal to the greater of $ 1.60 and the market price on the date of the conversion, the company said.
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Meanwhile, each warrant will entitle the holder to acquire one common share at a price of $ 1.60 per share for a period of 24 months from the date of issuance. This is subject to the company’s right to accelerate the expiry date of the warrants to a date which is 30 days after the date on which a written notice is provided to the warrant holders if the daily volume-weighted average trading price of the common shares is greater than $ 2.25 for any 15 consecutive trading days, subject to receipt of any required approvals from the TSX Venture Exchange.
ESE said it paid cash finder’s fees in the aggregate of $ 47,530 and issued a total of 29,707 finder warrants to Aligned Capital Partners Inc and Echelon Wealth Partners Inc for their services in the second tranche of the placement. Each finder warrant is exercisable at $ 1.60 for a period of 24 months from the date of issuance.
Separately, the company corrected the disclosure included in its news release dated April 11, 2022, regarding the finder warrants issued in connection with the first tranche. It said a total of $ 64,750 was paid in cash and a total of 40,469 finder warrants were issued to Echelon Wealth Partners Inc rather than the $ 68,250 and 42,656 finder warrants it previously announced.
The units, notes, warrants, finder warrants and any securities issuable upon conversion or exercise are and will be subject to a statutory hold period of four months and one day from the date of issuance. The offering is subject to final approval by the TSX Venture Exchange.
ESE is a Europe-based entertainment and technology company focused on gaming and esports. The company provides a range of services to leading video game developers, publishers, and brands by providing technology, infrastructure, and fan engagement services internationally.
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