Filed pursuant to 424(b)(3)
File Number 333-256175
PROSPECTUS
20,974,029
Shares
Inspired
Entertainment, Inc.
Common
Stock
The
selling stockholders named in this prospectus may offer and sell from time to time up to an aggregate of 16,974,079 shares of common
stock of Inspired Entertainment, Inc. (“Inspired Entertainment,” “Inspired,” “the Company,” “we,”
“us” or “our”) covered by this prospectus, which includes (i) an aggregate of 2,031,500 shares of our common
stock that may be offered for resale by the selling stockholders under this prospectus, consisting of (a) 1,127,185 shares issued in
March 2019 in connection with an earnout relating to the Company’s business combination that closed in December 2016; (b) 3,195
shares issued in January 2017 in connection with the Company’s aforementioned business combination, which had not been previously
registered; and (c) 901,120 shares held by the Company’s former President and Chief Executive Officer, which were issued in December
2016 (including 617,515 shares that are subject to cancellation if certain price targets are not met) and (ii) an aggregate of 14,942,579
shares of common stock that are currently registered and remain unsold under a prior registration statement on Form S-3 (File No. 333-217215)
initially declared effective on July 17, 2017 and last amended on August 23, 2018 (the “Prior Registration Statement”), including
up to 5,539,615 shares issuable upon exercise of 11,079,230 private placement warrants issued in connection with our initial public offering
and in connection with our initial business combination (the “Private Warrants”). In addition, this prospectus relates to
the issuance of up to 3,999,950 shares registered under the Prior Registration Statement which are issuable upon the exercise of 7,999,900
warrants originally issued as part of units in our initial public offering (the “Public Warrants” and together with the Private
Warrants, the “warrants”). We refer to our common stock that may be offered by the selling stockholders pursuant to this
prospectus and any applicable prospectus supplement collectively as the “shares” (see “Selling Stockholders”
section).
We
will not receive any proceeds from the sale of shares of common stock to be offered by the selling stockholders pursuant to this prospectus.
However, we will pay the expenses, other than underwriting discounts and commissions, associated with the sale of shares pursuant to
this prospectus. We will receive up to an aggregate of approximately $109,704,998 from the exercise of warrants, assuming the exercise
in full of all the warrants for cash. We expect to use the net proceeds from the exercise of the warrants for general corporate purposes.
Our
registration of the securities covered by this prospectus does not mean that the selling stockholders will offer or sell any of the shares.
The selling stockholders may sell the shares of common stock covered by this prospectus in a number of different ways and at varying
prices on terms to be determined at the time of sale. We provide more information about how the selling stockholders may sell the shares
in the section entitled “Plan of Distribution”.
Our
common stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “INSE.” The closing bid price
for our common stock on May 13, 2021 was $7.85 per share, as reported on Nasdaq.
Investing
in our common stock involves high risks. See “Risk Factors” on page 4 and
the documents incorporated by reference into this prospectus.
We
are a “smaller reporting company” and a “non-accelerated filer” which qualifies us for reduced public company
reporting requirements including an exemption from providing an auditor attestation of internal control over financial reporting pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002 (see “Risk Factors” on page 4).
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is May 24, 2021.
TABLE
OF CONTENTS
Neither
we nor the selling stockholders have authorized anyone to provide any information or to make any representations other than those contained
or incorporated by reference in this prospectus, any accompanying prospectus supplement or any free writing prospectus we have prepared.
We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.
This prospectus is an offer to sell only the shares of common stock offered hereby and only under circumstances and in jurisdictions
where it is lawful to do so. The information contained or incorporated by reference in this prospectus is current only as of its date.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”)
using a “shelf” registration process. Under this shelf registration process, the selling stockholders may, from time to time,
offer and sell shares of our common stock in one or more offerings. This prospectus generally describes Inspired Entertainment, Inc.
and our common stock. The selling stockholders may use the shelf registration statement to sell up to an aggregate of 16,974,079 shares
of our common stock from time to time through any means described in the section entitled “Plan of Distribution,” including
up to 5,539,615 shares issuable upon exercise of our Private Warrants. This prospectus also relates to the issuance of up to 3,999,950
shares of our common stock issuable upon exercise of our Public Warrants.
We
will not receive any proceeds from the sale of shares of common stock to be offered by the selling stockholders pursuant to this prospectus.
However, we will pay the expenses, other than underwriting discounts and commissions, associated with the sale of shares pursuant to
this prospectus. We will receive up to an aggregate of approximately $109,704,998 from the exercise of warrants, assuming the exercise
in full of all the warrants for cash. We expect to use the net proceeds from the exercise of the warrants for general corporate purposes.
We
and the selling stockholders, as applicable, may deliver a prospectus supplement with this prospectus, to the extent appropriate, to
update the information contained in this prospectus. The prospectus supplement may also add, update or change information included in
this prospectus. You should read both this prospectus and any applicable prospectus supplement, together with additional information
described below under the captions “Where You Can Find More Information” and “Incorporation of Certain Information
by Reference.”
No
offer of these securities will be made in any jurisdiction where the offer is not permitted.
Unless
the context indicates otherwise, the terms “Inspired Entertainment,” “Company,” “we,” “us”
and “our” refer to Inspired Entertainment, Inc., a Delaware corporation, and its subsidiaries. References to “Hydra
Industries Acquisition Corp.” are to the Company prior to the Business Combination. References to the “Business Combination”
refer to the acquisition of Inspired Gaming Group by Hydra Industries Acquisition Corp. on December 23, 2016. We changed our name from
Hydra Industries Acquisition Corp. to Inspired Entertainment, Inc. upon consummation of the Business Combination. References in this
prospectus to (i) the “Hydra Sponsor” refer to Hydra Industries Sponsor LLC and (ii) the “Macquarie Sponsor”
refer to MIHI LLC. Together, the Hydra Sponsor and the Macquarie Sponsor, which co-sponsored our initial public offering, are referred
to herein as the “Sponsors.”
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any accompanying prospectus supplement and the documents we have filed or will file with the SEC that are or will be incorporated
by reference into this prospectus and the accompanying prospectus supplement contain forward-looking statements, within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
that involve risks and uncertainties. Any statements contained, or incorporated by reference, in this prospectus and any accompanying
prospectus that are not statements of historical fact may be forward-looking statements. When we use the words “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “will” and other similar terms and phrases, including references to assumptions,
we are identifying forward-looking statements. Forward-looking statements involve risks and uncertainties which may cause our actual
results, performance or achievements to be materially different from those expressed or implied by forward-looking statements.
Our
forward-looking statements reflect our current expectations about our future results, performance, liquidity, financial condition, prospects
and opportunities, and are based upon information currently available to us, our interpretation of what we believe to be significant
factors affecting our business and many assumptions regarding future events. Actual results, performance, liquidity, financial condition,
prospects and opportunities could differ materially from those expressed in, or implied by, our forward-looking statements. This could
occur as a result of various risks and uncertainties, including the following:
|
●
|
the
persistence of the ongoing global coronavirus (COVID-19) pandemic on our business with respect to the potential duration and frequency
of the various Government-ordered emergency measures including travel restrictions, social distancing and/or shelter in place orders
and closure of retail and leisure, resurgences in various regions and appearances of new variants requiring ongoing reinstitution
of such Government-ordered emergency measures;
|
|
|
|
|
●
|
government
regulation of our industries;
|
|
|
|
|
●
|
our
ability to compete effectively in our industries;
|
|
|
|
|
●
|
the
effect of evolving technology on our business;
|
|
|
|
|
●
|
our
ability to renew long-term contracts and retain customers, and secure new contracts and customers;
|
|
|
|
|
●
|
our
ability to maintain relationships with suppliers;
|
|
|
|
|
●
|
our
ability to protect our intellectual property;
|
|
|
|
|
●
|
our
ability to protect our business against cybersecurity threats;
|
|
|
|
|
●
|
our
ability to successfully grow by acquisition as well as organically;
|
|
|
|
|
●
|
fluctuations
due to seasonality;
|
|
|
|
|
●
|
our
ability to attract and retain key members of our management team;
|
|
|
|
|
●
|
our
need for working capital;
|
|
|
|
|
●
|
our
ability to secure capital for growth and expansion;
|
|
|
|
|
●
|
changing
consumer, technology and other trends in our industries;
|
|
|
|
|
●
|
our
ability to successfully operate across multiple jurisdictions and markets around the world;
|
|
|
|
|
●
|
changes
in local, regional and global economic and political conditions; and
|
|
|
|
|
●
|
other
factors.
|
In
light of these risks and uncertainties, and others discussed in this prospectus there can be no assurance that any matters covered by
our forward-looking statements will develop as predicted, expected or implied. Readers should not place undue reliance on any forward-looking
statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. We advise
you to carefully review the reports and documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”).
THE
OFFERING
Issuer
|
|
Inspired
Entertainment, Inc.
|
|
|
|
Shares
of common stock offered by the selling stockholders
|
|
16,974,079
shares (comprised of 11,434,464 shares of common and 5,539,615 shares of stock issuable upon the exercise of Private Warrants).
|
|
|
|
Shares
issuable upon exercise of Public Warrants
|
|
3,999,950
shares issuable upon the exercise of 7,999,900 Public Warrants.
|
|
|
|
Use
of proceeds
|
|
All
of the shares of common stock offered by the selling stockholders pursuant to this prospectus will be sold by the selling stockholders
for their respective accounts. We will not receive any of the proceeds from these sales. We will receive up to an aggregate of approximately
$109,704,998 from the exercise of warrants, assuming the exercise in full of all the warrants for cash. We expect to use the net
proceeds from the exercise of the warrants for general corporate purposes.
|
|
|
|
Mandatory
Redemption of Securities from Certain Investors
|
|
Any
of our securities owned or controlled by an “Unsuitable Person” (defined as a person who (i) is determined by a gaming
authority to be unsuitable to own or control any securities, or unsuitable to be connected or affiliated with a person engaged in
gaming activities in a gaming jurisdiction, or (ii) causes the Company or any of its affiliated companies to lose or to be threatened
with the loss of any gaming license or (iii) in the sole discretion of the board of directors of the Company, is deemed likely to
jeopardize the Company’s or any affiliated company’s application for, receipt of approval for, right to the use of or
entitlement to, any gaming license) or an affiliate of an Unsuitable Person shall be subject to redemption by the Company, out of
funds legally available therefor, by action of the board of directors, to the extent required by the gaming authority making the
determination of unsuitability or to the extent deemed necessary or advisable by the board of directors. For a further description
of the Company’s redemption powers and procedures, see “Description of Capital Stock”.
|
|
|
|
Market
for our common stock
|
|
Our
shares of common stock are currently listed on NASDAQ, under the ticker symbol “INSE”.
|
|
|
|
Risk
Factors
|
|
Any
investment in the securities offered hereby involves high risks. You should carefully consider the information set forth under
“Risk Factors”.
|
Unless
otherwise indicated, all references in this prospectus to the number and percentages of shares of common stock outstanding do not give
effect to, as of May 21, 2021:
●
5,539,615 shares issuable upon the exercise of the Private Warrants;
●
3,999,950 shares issuable upon the exercise of the Public Warrants;
●
624,116 shares subject to outstanding restricted stock awards;
●
4,314,814 shares subject to outstanding restricted stock unit awards;
●
2,371,799 shares available for new grants under the Company’s equity incentive plan; and
●
467,751 shares available for purchase under the Company’s employee stock purchase plan.
INFORMATION
ABOUT THE COMPANY
We
are a global gaming technology company, supplying content, platform and other products and services to online and land-based regulated
lottery, betting and gaming operators worldwide through a broad range of distribution channels, predominantly on a business-to-business
basis. We provide end-to-end digital gaming solutions (i) on our own proprietary and secure network, which accommodates a wide range
of devices, including land-based gaming machine terminals, mobile devices and online computer applications and (ii) through third party
networks. Our content and other products can be found through the consumer-facing portals of our interactive customers and, through our
land-based customers, in licensed betting offices, adult gaming centers, pubs, bingo halls, airports, motorway service areas and leisure
parks.
Our
principal executive offices are located at 250 West 57th Street, Suite 415, New York, New York 10107, and our telephone number is (646)
565-3861. Our website is www.inseinc.com. The information found on our website is not part of this prospectus.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Prior to making a decision about investing in our securities, you should
carefully consider all of the other information contained or incorporated by reference in this prospectus and any prospectus supplement.
You should also consider the risks, uncertainties and assumptions discussed under Item 1A, “Risk Factors” included in our
Annual Report on Form 10-K for the year ended December 31, 2020 and any updates contained in subsequent filings with the SEC, including
in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are incorporated herein by reference. The occurrence
of any of these risks might cause you to lose all or part of your investment in the offered securities. The risks and uncertainties we
have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem
immaterial may also affect our operations.
USE
OF PROCEEDS
All
of the shares of common stock offered by the selling stockholders pursuant to this prospectus will be sold by the selling stockholders
for their respective accounts. We will not receive any of the proceeds from these sales. We will receive up to an aggregate of approximately
$109,704,998 from the exercise of warrants, assuming the exercise in full of all the warrants for cash. We expect to use the net proceeds
from the exercise of the warrants for general corporate purposes.
SELLING
STOCKHOLDERS
Up
to 16,974,079 shares of our common stock may be offered for resale by the selling stockholders under this prospectus, including:
|
(i)
|
3,647,776
shares acquired by our Sponsors, our initial directors and other personnel in connection with our formation, initial public offering
and the Business Combination;
|
|
|
|
|
(ii)
|
6,274,743
shares acquired by the owners of Inspired Gaming Group as consideration in the Business Combination, including 1,127,185 shares issued
as an earnout during 2019;
|
|
|
|
|
(iii)
|
50,825
shares acquired by advisors and consultants to the Company in partial compensation for their services in connection with our initial
public offering and the Business Combination;
|
|
|
|
|
(iv)
|
560,000
shares acquired by certain institutional and accredited investors (the “Investors”) from the Hydra Sponsor in connection
with the Business Combination;
|
|
|
|
|
(v)
|
901,120
shares acquired by our former Chief Executive Officer, Luke Alvarez, in connection with the Business Combination, including 617,515
shares received as a grant of restricted stock under an equity incentive plan which award remains subject to forfeiture if applicable
price targets are not met by December 23, 2021 (i.e., $15.00 for 308,757 shares and $17.50 for 308,758 shares); and
|
|
|
|
|
(vi)
|
5,539,615
shares underlying 11,079,230 Private Warrants acquired by the Sponsors, a former insider and the Investors.
|
To
the extent permitted by law, the selling stockholders listed below may resell shares of our common stock pursuant to this prospectus.
We have registered the sale of the shares of our common stock to permit the selling stockholders and their respective permitted transferees
or other successors-in-interest that receive their shares from the selling stockholders after the date of this prospectus to resell their
shares.
The
following table sets forth the number of shares of common stock being offered by the selling stockholders, including their donees, pledgees,
transferees or other successors-in-interest. The following table also sets forth the number of shares held by the selling stockholders,
as of May 21, 2021 based on the Company’s records, the public filings of certain holders and information previously furnished
to us by holders. The selling stockholders are not making any representation that any shares covered by this prospectus will be offered
for sale. The selling stockholders reserve the right to accept or reject, in whole or in part, any proposed sale of shares. For purposes
of the table below, we assume that all of the shares covered by this prospectus will be sold.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares of common
stock and the right to acquire such voting or investment power within 60 days through the exercise of any option, warrant or other right.
Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect
to the shares of common stock beneficially owned by them. Except as described in the footnotes to the following table and under “Material
Relationships with Selling Stockholders” below, none of the persons named in the table has held any position or office or had any
other material relationship with us or our affiliates during the three years prior to the date of this prospectus. The inclusion of any
shares of common stock in this table does not constitute an admission of beneficial ownership for the person named below.
For
ownership prior to the offering, the percentages in the table are based on 23,218,323 shares of common stock outstanding as of the date
of this prospectus. In calculating this percentage for a particular holder, we treated as outstanding the number of shares of our common
stock issuable upon exercise of that particular holder’s warrants and did not assume exercise of any other holder’s warrants.
Ownership percentages after the offering assume the exercise of all Private Warrants, yielding 28,757,938, shares of common stock outstanding.
|
|
Shares Beneficially Owned Prior to the Offering
|
|
|
Number of Shares Available Pursuant to this
|
|
|
Shares Beneficially Owned After the Offering †
|
|
Name
|
|
Number
|
|
|
% ǂ
|
|
|
Prospectus
|
|
|
Number
|
|
|
% ¥
|
|
683 Capital Partners, LP (1)(20)
|
|
|
2,163,126
|
|
|
|
8.86
|
%
|
|
|
120,000
|
|
|
|
2,043,126
|
|
|
|
6.83
|
%
|
A. Lorne Weil (2)(10)(21)
|
|
|
3,346,059
|
|
|
|
12.63
|
%
|
|
|
2,050,000
|
|
|
|
1,296,059
|
|
|
|
4.32
|
%
|
Bank of New York Nominees Limited (23)
|
|
|
1,940
|
|
|
|
*
|
|
|
|
1,940
|
|
|
|
0
|
|
|
|
-
|
|
Barclayshare Nominees Limited (23)
|
|
|
887
|
|
|
|
*
|
|
|
|
887
|
|
|
|
0
|
|
|
|
-
|
|
David Nussbaum (3)(4)(22)
|
|
|
3,000
|
|
|
|
*
|
|
|
|
3,000
|
|
|
|
0
|
|
|
|
-
|
|
EarlyBirdCapital, Inc. (4)(22)
|
|
|
10,000
|
|
|
|
*
|
|
|
|
10,000
|
|
|
|
0
|
|
|
|
-
|
|
Eileen Moore (3)(4)(22)
|
|
|
100
|
|
|
|
*
|
|
|
|
100
|
|
|
|
0
|
|
|
|
-
|
|
Ellenoff Grossman & Schole LLP (5)(22)
|
|
|
1,633
|
|
|
|
*
|
|
|
|
1,633
|
|
|
|
0
|
|
|
|
-
|
|
Eric Carrera (6)(21)
|
|
|
30,697
|
|
|
|
*
|
|
|
|
25,000
|
|
|
|
5,697
|
|
|
|
*
|
|
George Peng (7)(21)
|
|
|
39,071
|
|
|
|
*
|
|
|
|
31,925
|
|
|
|
7,146
|
|
|
|
*
|
|
HG Vora Special Opportunities Master Fund, Ltd. (8)(20)
|
|
|
3,025,000
|
|
|
|
12.81
|
%
|
|
|
850,000
|
|
|
|
2,175,000
|
|
|
|
7.56
|
%
|
Harwood Capital Nominees Limited Accounts (9)(23)
|
|
|
303,286
|
|
|
|
1.31
|
%
|
|
|
50,023
|
|
|
|
253,263
|
|
|
|
*
|
|
Hydra Industries Sponsor LLC (10)(21)
|
|
|
2,310,923
|
|
|
|
9.22
|
%
|
|
|
2,310,923
|
|
|
|
0
|
|
|
|
-
|
|
JM Finn Nominees Limited (11)(23)
|
|
|
958
|
|
|
|
*
|
|
|
|
958
|
|
|
|
0
|
|
|
|
-
|
|
Jennifer Calabrese (21)
|
|
|
1,780
|
|
|
|
*
|
|
|
|
1,780
|
|
|
|
0
|
|
|
|
-
|
|
John Stergides (23)
|
|
|
2,515
|
|
|
|
*
|
|
|
|
2,515
|
|
|
|
0
|
|
|
|
-
|
|
Jonathan Miller (21)
|
|
|
25,000
|
|
|
|
*
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
-
|
|
Kenneth Shea (21)
|
|
|
25,000
|
|
|
|
*
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
-
|
|
Kramer Levin Naftalis & Frankel LLP (12)(22)
|
|
|
26,942
|
|
|
|
*
|
|
|
|
26,942
|
|
|
|
0
|
|
|
|
-
|
|
The Landgame Trust (Evan Davis, Trustee) (13)(23)
|
|
|
6,217,628
|
|
|
|
26.78
|
%
|
|
|
6,217,628
|
|
|
|
0
|
|
|
|
-
|
|
Lennox Capital (14)(20)
|
|
|
210,309
|
|
|
|
*
|
|
|
|
30,000
|
|
|
|
180,309
|
|
|
|
*
|
|
Luke Alvarez (15)
|
|
|
901,120
|
|
|
|
3.88
|
|
|
|
901,120
|
|
|
|
0
|
|
|
|
-
|
|
MIHI LLC (16)(21)
|
|
|
4,023,750
|
|
|
|
16.61
|
|
|
|
4,023,750
|
|
|
|
0
|
|
|
|
-
|
|
Marion Rainone (21)
|
|
|
8,899
|
|
|
|
*
|
|
|
|
8,899
|
|
|
|
0
|
|
|
|
-
|
|
Martin E. Schloss (17)(21)
|
|
|
205,114
|
|
|
|
*
|
|
|
|
205,114
|
|
|
|
0
|
|
|
|
-
|
|
Mary McCarthy (23)
|
|
|
12
|
|
|
|
*
|
|
|
|
12
|
|
|
|
0
|
|
|
|
-
|
|
Michael Goor (18)(20)
|
|
|
65,000
|
|
|
|
*
|
|
|
|
15,000
|
|
|
|
50,000
|
|
|
|
*
|
|
Michael John Kelly (23)
|
|
|
3
|
|
|
|
*
|
|
|
|
3
|
|
|
|
0
|
|
|
|
-
|
|
Mishcon De Reya LLP (19)(22)
|
|
|
100
|
|
|
|
*
|
|
|
|
100
|
|
|
|
0
|
|
|
|
-
|
|
Ian Worley (23)
|
|
|
47
|
|
|
|
*
|
|
|
|
47
|
|
|
|
0
|
|
|
|
-
|
|
Pershing Nominees Limited (23)
|
|
|
452
|
|
|
|
*
|
|
|
|
452
|
|
|
|
0
|
|
|
|
-
|
|
Robert Stevens (22)
|
|
|
2,818
|
|
|
|
*
|
|
|
|
2,818
|
|
|
|
0
|
|
|
|
-
|
|
Stephen Dannhauser (21)
|
|
|
25,000
|
|
|
|
*
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
-
|
|
Steven Levine (3)(4)(22)
|
|
|
6,232
|
|
|
|
*
|
|
|
|
6,232
|
|
|
|
0
|
|
|
|
-
|
|
TD Waterhouse Nominees (Europe) Limited (23)
|
|
|
224
|
|
|
|
*
|
|
|
|
224
|
|
|
|
0
|
|
|
|
-
|
|
Tom Callanan (23)
|
|
|
54
|
|
|
|
*
|
|
|
|
54
|
|
|
|
0
|
|
|
|
-
|
|
(†)
Assuming the sale of all shares registered pursuant to this prospectus.
(ǂ)
Assuming exercise of only the outstanding Private Warrants held by that particular holder.
(¥)
Assuming exercise of all outstanding Private Warrants.
(*)
Represents less than 1.0%.
(1)
Includes 40,000 shares underlying 80,000 Private Warrants and 1,194,045 shares underlying 2,388,090 Public warrants. Ari Zweiman, being
the Managing Member of 683 Capital Partners, LP, may be deemed to beneficially own or otherwise exercise dispositive powers with respect
to the shares directly held by 683 Capital Partners, LP.
(2)
Includes 2,050,000 shares underlying 4,100,000 Private Warrants and 1,221,660 shares subject to RSUs that are vested or scheduled to
vest within 60 days. Does not include any shares, or shares underlying warrants, owned by Hydra Industries Sponsor LLC over which Mr.
Weil may be deemed to exercise dispositive power. Including the shares and Private Warrants held by Hydra Industries Sponsor LLC (see
footnote 10), Mr. Weil may be deemed to have beneficial ownership of, or exercise dispositive power over, 19.97% of the Company’s
total outstanding shares prior to the offering.
(3)
Does not include any shares owned by EarlyBirdCapital, Inc. over which David Nussbaum, Eileen Moore, and Steven Levine may be deemed
to exercise dispositive power.
(4)
Steven Levine, David Nussbaum and Eileen Moore may be deemed to exercise dispositive powers with respect to the shares directly held
by EarlyBirdCapital, Inc.
(5)
The equity partners of Ellenoff Grossman & Schole LLP may be deemed to beneficially own or otherwise exercise dispositive powers
with respect to shares held directly by Ellenoff Grossman & Schole LLP.
(6)
Includes 25,000 shares underlying 50,000 Private Warrants and 1,033 shares subject to RSUs scheduled to vest within 60 days.
(7)
Includes 25,000 shares underlying 50,000 Private Warrants and 1,291 shares subject to RSUs scheduled to vest within 60 days.
(8)
Includes 400,000 shares underlying 800,000 Private Warrants. Parag Vora may be deemed to beneficially own or otherwise exercise dispositive
powers with respect to the shares directly held by HG Vora Special Opportunities Master Fund, Ltd. (“HGV Fund”).
(9)
Harwood Capital LLP may be deemed to beneficially own or otherwise exercise dispositive powers with respect to these shares on behalf
of funds and accounts managed by Harwood Capital LLP.
(10)
Includes 1,834,615 shares underlying 3,669,230 Private Warrants. A. Lorne Weil may be deemed to beneficially own or otherwise exercise
dispositive powers with respect to shares directly held by Hydra Industries Sponsor LLC.
(11)
The authorized directors of JM Finn Nominees Limited may be deemed to beneficially own or otherwise exercise dispositive powers with
respect to the shares directly held by JM Finn Nominees Limited.
(12)
The managing partner of Kramer Levin Naftalis & Frankel LLP has sole voting and investment power over the shares.
(13)
The shares are held in a trust for the benefit of Landgame S.à r.l., pursuant to a trust
agreement dated December 23, 2020, between Landgame S.à r.l. and Evan Davis, as trustee. Each of Mr. Davis, Landgame S.à
r.l., Vitruvian I Luxembourg S.à.r.l, VIP I Nominees Limited and Vitruvian Partners LLP may be deemed to beneficially own
or otherwise exercise dispositive powers with respect to the shares held in The Landgame Trust. Mr. Davis is party to a voting agreement
with the Company dated December 23, 2020 which provides that the shares held by The Landgame Trust
will be voted at meetings of the Company’s stockholders in proportion to the votes of all other stockholders of the Company represented
in person or by proxy at the meeting (i.e., mirror voting).
(14)
Includes 10,000 shares underlying 20,000 Private Warrants and 117,043 underlying Public Warrants. Richard D. Squires, the President of
RS Holdings, Inc. (general partner of Lennox Capital Partners, LP), and Tyler Brous, the Vice President of RS Holdings, Inc., may be
deemed to beneficially own or otherwise exercise dispositive powers with respect to the shares directly held by Lennox Capital Partners,
LP.
(15)
Includes 617,515 shares of restricted stock awarded to Mr. Alvarez pursuant to the Company’s 2016 Long Term Incentive Plan which
are subject to forfeiture if applicable price targets are not met by December 23, 2021 ($15.00 for 308,757 shares and $17.50 for 308,758
shares).
(16)
Includes 1,000,000 shares underlying 2,000,000 Private Warrants. Macquarie Group Limited may be deemed to beneficially own or otherwise
exercise dispositive powers with respect to the shares directly held by MIHI LLC.
(17)
Includes 55,114 shares of common stock held by MS Hercules LLC and 150,000 shares underlying 300,000 Private Warrants held by Mr. Schloss.
Mr. Schloss may be deemed to beneficially own or otherwise exercise dispositive powers with respect to the shares directly owned by MS
Hercules LLC.
(18)
Includes 5,000 shares underlying 10,000 Private Warrants. Michael Goor has sole voting and investment power over the shares.
(19)
The senior equity partners of Mishcon de Reya LLP, may be deemed to beneficially own or otherwise exercise dispositive powers with respect
to the shares directly held by Mishcon de Reya LLP.
(20)
Includes shares and shares underlying Private Warrants acquired by the Investors from the Hydra Sponsor in connection with the Business
Combination.
(21)
Includes shares and shares underlying Private Warrants acquired by the Sponsors and insiders in connection with the Company’s formation,
initial public offering and the Business Combination.
(22)
Reflects shares acquired by service providers in partial compensation for services rendered to the Company in connection with the initial
public offering, Business Combination and/or other matters.
(23)
Reflects shares issued as consideration in connection with the Business Combination.
Material
Relationships with Selling Stockholders
Except
as described below, there have been no material relationships between us and the selling stockholders during the last three years.
|
●
|
A.
Lorne Weil has been our Executive Chairman since the Business Combination and was previously Chief Executive Officer of Hydra Industries
Acquisition Corp.
|
|
|
|
|
●
|
George
Peng has been a Vice President since the Business Combination and was previously Chief Financial Officer of Hydra Industries Acquisition
Corp.
|
|
|
|
|
●
|
Hydra
Industries Sponsor LLC, an affiliate of A. Lorne Weil, sponsored our IPO. Pursuant to a stockholders agreement with the Company,
which was entered into in connection with the Business Combination (the “Stockholders Agreement”), the Hydra Sponsor
(i) has the right to designate one (1) director to the Company’s Board and (ii) together with the Macquarie Sponsor, has the
right to co-designate two (2) directors to the Company’s Board.
|
|
|
|
|
●
|
Luke
Alvarez is the former President and Chief Executive Officer of the Company.
|
|
|
|
|
●
|
Landgame
S.à.r.l had the right to designate directors to the Company’s Board under the Stockholders Agreement until December
23, 2020 when it entered into a termination agreement with respect thereto in connection with its agreement to transfer legal title
of its shares to The Landgame Trust pursuant to a trust agreement dated December 23, 2020. In
addition, in connection with the trust agreement, the trustee entered into a voting agreement with the Company which provides that
the trustee shall vote shares held by The Landgame Trust, or authorize a proxy or proxies to vote such shares, in proportion to the
votes of all other stockholders of the Company represented in person or by proxy at each meeting of the stockholders of the Company
(i.e., mirror voting).
|
|
|
|
|
●
|
MIHI
LLC sponsored our IPO. Pursuant to the Stockholders Agreement, MIHI LLC (our Macquarie Sponsor), together with the Hydra Sponsor,
has the right to co-designate two (2) directors to the Company’s Board. Macquarie Corporate Holdings Pty Limited (UK Branch),
an affiliate of the Macquarie Sponsor, is one of the lending parties with respect to our senior secured term loans and revolving
credit facility under our senior facilities agreement dated September 27, 2019 as amended and restated on June 25, 2020.
|
|
|
|
|
●
|
Eric
Carrera has been employed as Manager of Finance/M&A since the Business Combination.
|
|
|
|
|
●
|
Ellenoff
Grossman & Schole LLP provided legal services in connection with our IPO and other legal matters and remains a service provider.
|
|
|
|
|
●
|
Mishcon
De Reya LLP provided legal services in connection with our Business Combination and remains a service provider.
|
|
|
|
|
●
|
HGV
Fund purchased promissory notes issued by a subsidiary of the Company pursuant to a Note Purchase Agreement and Guaranty, dated August
13, 2018, which were repaid in October 2019. HGV Fund is also a stockholder and investor in Leisure Acquisition Corp., a special
purpose acquisition company affiliated with two members of our management.
|
Gaming
Regulatory Limitations on Transfers, Ownership – Unsuitable Persons
We
and our stockholders may be subject to certain restrictions on share transfers and ownership imposed by various gaming or gambling authorities
in the jurisdictions in which we conduct our business. You may not purchase any common stock pursuant to this offering if you are required
to obtain prior clearance or approval from any state, federal or foreign regulatory authorities to own or control the shares and if,
at the time this offering expires, you have not obtained such clearance or approval. The Company’s common stock is transferable
only subject to the provisions of applicable gaming laws, and may be subject to compliance with the requirements of other laws pertaining
to licenses held directly or indirectly by us. The owners of common stock sold in this offering may be required by regulatory authorities
to possess certain qualifications and may be required to dispose of their common stock if the owner does not possess such qualifications.
Pursuant
to our charter, we may redeem the shares of capital stock owned or controlled by a stockholder or its affiliates to the extent required
by the relevant gaming authority making a determination of unsuitability, or to the extent the board of directors determines, in its
sole discretion, that a person is likely to jeopardize the Company’s or any affiliate’s application for, receipt of approval
for, right to the use of, or entitlement to, any gaming license. The redemption price would be determined either by the gaming authority
making the finding of unsuitability, or if such gaming authority does not require a certain price to be paid, by our board of directors,
which would determine the price based on the fair value of the securities to be redeemed; provided, however, that the price per share
represented by the redemption price shall in no event be in excess of the closing sales price per share of the Company’s shares
on the principal national securities exchange on which such shares are then listed on the trading date on the day before we notify the
holder of such redemption. The redemption price may be paid in cash, by promissory note, or both as required pursuant to the terms established
by the applicable gaming authority and, if there are no such terms, as we elect.
PLAN
OF DISTRIBUTION
We
are registering up to 16,974,079 shares of our common stock for possible sale by the selling stockholders. These shares include 5,539,615
shares of our common stock that underlie our Private Warrants and may be issued by us upon the exercise of the Private Warrants by the
holders thereof. Additionally, this prospectus relates to the issuance of up to 3,999,950 shares underlying our Public Warrants. Unless
the context otherwise requires, as used in this prospectus, “selling stockholders” includes the selling stockholders named
in the table above under “Selling Security Holders” and donees, pledgees, transferees or other successors-in-interest selling
shares received from such selling stockholders as a gift, pledge or other transfer after the date of this prospectus.
The
selling stockholders may offer and sell all or a portion of the shares covered by this prospectus from time to time, in one or more or
any combination of the following transactions:
|
●
|
on
Nasdaq, in the over-the-counter markets or on any other national securities exchange on which our shares are listed or traded;
|
|
|
|
|
●
|
in
privately negotiated transactions;
|
|
|
|
|
●
|
in
underwritten transactions;
|
|
|
|
|
●
|
in
a block trade in which a broker-dealer will attempt to sell the offered shares as agent but may purchase and resell a portion of
the block as principal to facilitate the transaction;
|
|
|
|
|
●
|
through
purchases by a broker-dealer as principal and resale by the broker-dealer for its account pursuant to this prospectus;
|
|
|
|
|
●
|
in
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
|
|
|
|
|
●
|
through
the writing of options (including put or call options), whether the options are listed on an options exchange or otherwise;
|
|
|
|
|
●
|
through
the distribution of the common stock by any selling stockholder to its partners, members or stockholders;
|
|
|
|
|
●
|
in
short sales entered into after the effective date of the registration statement of which this prospectus is a part; and
|
|
|
|
|
●
|
“at
the market” or through market makers or into an existing market for the shares.
|
The
selling stockholders may sell the shares at market prices then prevailing, prices related to the-then prevailing market price or at negotiated
prices. The offering price of the shares from time to time will be determined by the selling stockholders and, at the time of the determination,
may be higher or lower than the market price of our common stock on Nasdaq or any other exchange or market.
The
selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions,
or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The shares may be sold directly or through
broker-dealers acting as principal or agent, or pursuant to a distribution by one or more underwriters on a firm commitment or best-efforts
basis. The selling stockholders may also enter into hedging transactions with broker-dealers. In connection with such transactions, broker-dealers
of other financial institutions may engage in short sales of our common stock in the course of hedging the positions they assume with
the selling stockholders. The selling stockholders may also enter into options or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which
shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction). The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon
Rule 144 under the Securities Act, or in reliance on other available exemptions from the registration requirements of the Securities
Act, provided that in each such instance they meet the criteria and conform to the requirements of the applicable exemptions. In connection
with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from
the selling stockholders or from purchasers of the offered shares for whom they may act as agents. In addition, underwriters may sell
the shares to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from
the underwriters or commissions from the purchasers for whom they may act as agents.
The
selling stockholders and any underwriters, dealers or agents participating in a distribution of shares may be deemed to be “underwriters”
within the meaning of the Securities Act, and any profit on the sale of the shares by the selling stockholders and any commissions received
by broker-dealers may be deemed to be underwriting commissions under the Securities Act.
We
and the selling stockholders may agree to indemnify an underwriter, broker-dealer or agent against certain liabilities related to the
sale of the common stock, including liabilities under the Securities Act. Upon our notification by a selling stockholder of an expected
transaction in our common stock, we may file a supplement to this prospectus or an amendment to the registration statement of which this
prospectus forms a part, disclosing certain material information, including:
|
●
|
the
name of the selling stockholder;
|
|
●
|
the
number of shares being offered;
|
|
●
|
the
terms of the offering;
|
|
●
|
the
names of the participating underwriters, broker-dealers or agents;
|
|
●
|
any
discounts, commissions or other compensation paid to underwriters or broker-dealers and any discounts, commissions or concessions
allowed or re-allowed to or paid by any underwriters to dealers;
|
|
●
|
the
public offering price; and
|
|
●
|
other
material terms of the offering.
|
In
addition, upon being notified by a selling stockholder that a donee, pledgee, transferee or other successor-in-interest intends to sell
shares, we will, to the extent required, file a supplement to this prospectus to name specifically such person as a selling stockholder.
We
and the selling stockholders are subject to applicable provisions of the Exchange Act and the rules and regulations under the Exchange
Act, including Regulation M. This regulation may limit the timing of purchases and sales of any of the shares of common stock offered
in this prospectus by the selling stockholders. The anti-manipulation rules under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates. Furthermore, Regulation M may restrict the ability of
any person engaged in the distribution of shares to engage in market-making activities for the particular securities being distributed
for a period of up to five business days before the distribution. The restrictions may affect the marketability of the shares and the
ability of any person or entity to engage in market-making activities for the shares.
In
compliance with guidelines of the Financial Industry Regulatory Authority (“FINRA”), the maximum compensation or discount
to be received by any FINRA member or independent broker or dealer in a transaction subject to such guidelines may not exceed specified
limits determined by FINRA.
To
the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.
DESCRIPTION
OF CAPITAL STOCK
The
following summary of the material provisions of our capital stock is based on and qualified by our Second Amended and Restated Certificate
of Incorporation (the “Charter”), our Bylaws, and our Warrant Agreement dated October 24, 2014 between the Company and Continental
Stock Transfer & Trust Company (“Warrant Agreement”) each of which is incorporated by reference as an exhibit to our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The summary below is also qualified by reference to provisions
of the Delaware General Corporation Law (“DGCL”).
Authorized
Stock
Our
Charter authorizes the issuance of 50,000,000 shares, consisting of 49,000,000 shares of common stock, $0.0001 par value per share (“Common
Stock”), and 1,000,000 shares of preferred stock, $0.0001 par value (“Preferred Stock”).
Common
Stock
As
of May 21, 2021, there were 23,218,323 shares of Common Stock issued and outstanding. The outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and non-assessable.
Voting
Power
Except
as otherwise required by law or as provided in any certificate of designation for any series of Preferred Stock, the holders of Common
Stock possess all the voting power for the election of our directors and all other matters requiring stockholder action. Holders of Common
Stock are entitled to one vote per share held of record on matters to be voted on by stockholders.
Dividends
Holders
of Common Stock will be entitled to receive such dividends, if any, as may be declared from time to time by our board of directors in
its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions,
provided that such holder is not an Unsuitable Person (as defined below).
Liquidation,
Dissolution and Winding-Up
In
the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of our Common Stock
will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders,
after the rights of our creditors and the rights of holders of Preferred Stock, if any, have been satisfied.
Preemptive
or Other Rights
There
are no sinking fund provisions applicable to the Common Stock. Our stockholders have no preemptive or other subscription rights.
Preferred
Stock
Our
board of directors has the authority to issue up to an aggregate of 1,000,000 shares of Preferred Stock in one or more series, and to
fix the designations, preferences, rights, qualifications, limitations and restrictions thereof or thereon, without any further vote
or action by the stockholders. No shares of Preferred Stock are outstanding as of May 21, 2021.
Gaming
and Regulatory Matters – Unsuitable Persons
Our
Charter provides the Company with the ability to restrict securities ownership by persons (“Unsuitable Person”) who fail
to comply with informational or other regulatory requirements under applicable gaming laws, who are found unsuitable to hold the Company’s
securities by gaming authorities or who could by holding the Company’s securities cause the Company or any affiliate to fail to
obtain, maintain, renew or qualify for a license, contract, franchise or other regulatory approval from a gaming authority.
Specifically,
pursuant to our Charter, we may redeem the shares of capital stock owned or controlled by a stockholder or its affiliates to the extent
required by the relevant gaming authority making a determination of unsuitability, or to the extent our board of directors determines,
in its sole discretion, that a person is likely to jeopardize the Company’s or any affiliate’s application for, receipt of,
approval for, right to the use of, or entitlement to, any gaming license. The redemption price would be determined either by the gaming
authority making the finding of unsuitability, or if such gaming authority does not require a certain price to be paid, by our board
of directors, which would determine the price based on the fair value of the securities to be redeemed; provided, however, that the price
per share represented by the redemption price shall in no event be in excess of the closing sales price per share of the Company’s
shares on the principal national securities exchange on which such shares are then listed on the trading date on the day before we notify
the holder of such redemption. The redemption price may be paid in cash, by promissory note, or both as required pursuant to the terms
established by the applicable gaming authority and, if there are no such terms, as we elect.
Warrants
As
of May 21, 2021, there were 19,079,130 Warrants outstanding exercisable for 9,539,565 shares of Common Stock, consisting of 7,999,900
Public Warrants and 11,079,230 of Private Warrants.
Public
Warrants
The
Company’s Public Warrants were originally issued as part of the units sold in the Company’s IPO. Pursuant to the terms of
the Warrant Agreement, each such warrant entitles the registered holder to purchase one-half of one share of our Common Stock at a price
of $5.75 (or $11.50 per whole share), subject to adjustment as discussed below. Such warrants may be exercised only for a whole number
of shares of our Common Stock. The Public Warrants became exercisable on January 23, 2017 and will expire five years after the completion
of our Business Combination, at 5:00 p.m., New York City time on December 23, 2021, or earlier upon redemption or liquidation.
We
will not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Public Warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Common Stock underlying
such warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below
with respect to registration. No such warrant will be exercisable, and we will not be obligated to issue any shares to holders seeking
to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered and qualified under the securities
laws of the state of the exercising holder, unless exemptions therefrom are available. In the event that the conditions in the two immediately
preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such
warrant and such warrant may have no value and may expire worthless. In no event will we be required to net cash settle any Public Warrant.
We
will use our best efforts to maintain the effectiveness of a registration statement, and a current prospectus relating thereto, until
the expiration or redemption of the Public Warrants in accordance with the provisions of the Warrant Agreement. Notwithstanding the above,
if our Common Stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders
of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or qualify the underlying
shares under state blue sky laws.
We
may call the Public Warrants for redemption:
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder;
and
|
|
●
|
if,
and only if, the reported last sale price of the Common Stock equals or exceeds $24.00 per share for any 20 trading days within a
30-trading day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders.
|
If
and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register the underlying
securities for sale or qualify then under applicable state securities laws.
We
have established the last of the redemption conditions discussed above to prevent a redemption call unless there is, at the time of the
call, a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption
of the Public Warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date.
However, the price of the Common Stock may fall below the $24.00 redemption trigger price as well as the warrant exercise price of $5.75
per one-half of one share ($11.50 per whole share) after the redemption notice is issued.
If
we call the Public Warrants for redemption as described above, our management will have the option to require holders that wish to exercise
their warrants to do so on a “cashless basis.” In determining whether to require holders to exercise their warrants on a
“cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding
and the dilutive effect on our stockholders of issuing the maximum number of shares of Common Stock issuable upon the exercise of our
warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their
warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares
of Common Stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair
market value” (defined below), by (y) the fair market value. The “fair market value” shall mean the average reported
last sale price of the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of
redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption will contain
the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the warrants, including the
fair market value in such case. If we call our warrants for redemption and our management does not take advantage of this option, the
initial purchasers of the private placement warrants and their permitted transferees would still be entitled to exercise their Private
Warrants for cash or on a cashless basis using the same formula described above.
A
holder of a Public Warrant may notify us in writing in the event the holder elects to be subject to a requirement that such holder will
not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such
person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount
as such holder may specify) of the shares of Common Stock outstanding immediately after giving effect to such exercise.
If
the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, a split of shares
of common stock or other similar event, then, on the effective date of such stock dividend, split or similar event, the number of shares
of Common Stock issuable on exercise of each Public Warrant will be increased in proportion to such increase in the outstanding shares
of Common Stock. A rights offering to holders of Common Stock entitling holders to purchase shares of Common Stock at a price less than
the fair market value will be deemed to be a stock dividend of a number of shares of Common Stock equal to the product of (i) the number
of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering
that are convertible into or exercisable for Common Stock) multiplied by (ii) one minus the quotient of (x) the price per share of Common
Stock paid in such rights offering divided by (y) the fair market value. For these purposes: (i) if the rights offering is for securities
convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there will be taken into account
any consideration received for such rights, as well as any additional amount payable upon exercise or conversion, and (ii) fair market
value means the volume weighted average price of Common Stock as reported during the 10 trading day period ending on the trading day
prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way,
without the right to receive such rights.
In
addition, if we, at any time that the Public Warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities
or other assets to the holders of Common Stock on account of such shares of Common Stock (or other shares of our capital stock into which
the warrants are convertible), other than (a) as described above, or (b) certain ordinary cash dividends, then the warrant exercise price
will be decreased, effective immediately after the effective date of such event, by the amount of cash or the fair market value of any
securities or other assets paid on each share of Common Stock in respect of such event.
If
the number of outstanding shares of our Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification
of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Public Warrant will be decreased
in proportion to such decrease in outstanding shares of Common Stock.
Whenever
the number of shares of Common Stock purchasable upon the exercise of the Public Warrants is adjusted, as described above, the warrant
exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the
numerator of which will be the number of shares of Common Stock purchasable upon the exercise of the warrants immediately prior to such
adjustment, and (y) the denominator of which will be the number of shares of Common Stock so purchasable immediately thereafter.
In
case of any reclassification or reorganization of the outstanding shares of our Common Stock (other than those described above or that
solely affect the par value of such shares of Common Stock), or in the case of any merger or consolidation of us with or into another
corporation (other than a consolidation or merger in which we are the continuing corporation and which does not result in any reclassification
or reorganization of our outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity
of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders
of the Public Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified
in the warrants and in lieu of the shares of our Common Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon
such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder
of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders
were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation
or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed
to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively
make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders under circumstances in
which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate (within the meaning
of Rule 12b-2 under the Exchange Act) of such maker and any members of any such group of which any such affiliate or associate is a part,
own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of Common Stock, the
holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually
have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange
offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer,
subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments
provided for in the Warrant Agreement. Additionally, if less than 70% of the consideration receivable by the holders of Common Stock
in such a transaction is payable in the form of Common Stock in the successor entity that is listed for trading on a national securities
exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such
event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such
transaction, the warrant exercise price will be reduced as specified in the Warrant Agreement based on the per share consideration minus
the Black Scholes value (as defined in the Warrant Agreement) of the warrant.
The
Public Warrants were issued in registered form under the Warrant Agreement with Continental Stock Transfer & Trust Company, as warrant
agent, and us. You should review a copy of the Warrant Agreement for a complete description of the terms and conditions applicable to
the warrants. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure
any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public
Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full
payment of the exercise price by certified or official bank check payable to us (or on a cashless basis, if applicable), for the number
of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Common Stock nor any voting rights
until they exercise their warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of
the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No
fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the warrants, a holder would be entitled
to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Common
Stock to be issued to the warrant holder.
Private
Warrants
The
Company’s Private Warrants are identical to the Public Warrants sold in the IPO, including as to exercise price, exercisability
and exercise period, except that, if held by the initial private placement purchasers or their permitted assigns, they (a) may be exercised
for cash or on a cashless basis; and (b) are not subject to being called for redemption. If the Private Warrants are held by holders
other than the initial private placement purchasers or their permitted transferees, the Private Warrants will be redeemable by us and
exercisable by the holders on the same basis as the Public Warrants.
If
holders of the Private Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants
for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common
Stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of
the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is
sent to the warrant agent.
Certain
Anti-Takeover Provisions of Our Charter and Bylaws and Certain Provisions of Delaware Law
The
Company’s Charter and Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes
in our management without the consent of our board of directors. These provisions include:
|
●
|
no
cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
|
|
|
|
●
|
the
exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors
or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being
able to fill vacancies on our board of directors;
|
|
|
|
|
●
|
the
ability of our board of directors to determine whether to issue shares of our Preferred Stock and to determine the price and other
terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly
dilute the ownership of a hostile acquirer;
|
|
|
|
|
●
|
limiting
the liability of, and providing indemnification to, our directors and officers;
|
|
|
|
|
●
|
specifying
the Court of Chancery of the State of Delaware as the exclusive forum for adjudication of disputes;
|
|
|
|
|
●
|
controls
over the procedures for the conduct and scheduling of stockholder meetings; and
|
|
|
|
|
●
|
advance
notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters
to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation
of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
|
These
provisions, singly or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors
and management.
As
a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders
holding more than 15% of our outstanding Common Stock from engaging in certain business combinations without approval of the holders
of substantially all of our outstanding Common Stock. Any provision of our Charter or Bylaws, or Delaware law that has the effect of
delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our
Common Stock and could also affect the price that some investors are willing to pay for our Common Stock.
Rule
144
Rule
144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell
companies) or any issuer, such as the Company, that has been at any time previously a shell company. However, Rule 144 also includes
an important exception to this prohibition if the following conditions are met:
|
●
|
the
issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
|
|
|
|
●
|
the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
|
|
|
|
●
|
the
issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding
12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports;
and at least one year has elapsed from the time that the issuer filed current Form 10-type information with the SEC, which in the
case of the Company was filed promptly after completion of the Business Combination.
|
As
a result of the foregoing, Rule 144 was not available for the resale of our securities until one year after the filing of the Form 10
information included in the 8-K that the Company filed with the SEC with respect to the Business Combination on December 30, 2016.
Under
Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months may be entitled
to sell such shares, provided that such person is not deemed to have been one of our affiliates at the time of, or at any time during
the three months preceding, a sale; and we are subject to the Exchange Act periodic reporting requirements for at least three months
before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter
period as we were required to file reports) preceding the sale.
Persons
who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the
time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person
would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of:
|
●
|
1%
of the total number of shares of common stock then outstanding, or
|
|
|
|
|
●
|
the
average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form
144 with respect to the sale.
|
Sales
by our affiliates under Rule 144 are also limited by manner of sale provisions, notice requirements and requirements as to the availability
of current public information about us.
LEGAL
MATTERS
Unless
otherwise indicated in the relevant prospectus supplement, the validity of the securities offered under this prospectus will be passed
upon for us by Ellenoff Grossman & Schole LLP, New York, New York. If legal matters in connection with offerings made under this
prospectus are passed on by counsel for selling stockholders or underwriters, dealers or agents, if any, such counsel will be named in
the relevant prospectus supplement.
EXPERTS
The
audited consolidated balance sheets of Inspired Entertainment, Inc. and Subsidiaries as of December 31, 2020 and 2019, and the related
consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for the years ended
December 31, 2020 and 2019, and the related notes thereto, appear in our Annual Report on Form 10-K/A as of and for the year ended December
31, 2020 and are incorporated herein by reference, in reliance upon the report of Marcum LLP, independent registered public accounting
firm, and upon the authority of said firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. In addition, we have filed with the
SEC a registration statement on Form S-3 under the Securities Act with respect to the securities offered by this prospectus. This prospectus,
which forms a part of that registration statement, does not contain all of the information included in the registration statement, including
its exhibits and schedules. For further information about us and the securities described in this prospectus, you should refer to the
registration statement, its exhibits and schedules. The SEC maintains a website that contains our reports, proxy statements and other
information. The address of that website is www.sec.gov. Additionally, you may access our filings
with the SEC through our website at www.inseinc.com. The information on our website is not part of this prospectus.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
“incorporate by reference” into this prospectus documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus.
Some information contained in this prospectus updates the information incorporated by reference, and information that we file subsequently
with the SEC will automatically update this prospectus. In other words, in the case of a conflict or inconsistency between information
set forth in this prospectus and information that we file later and incorporate by reference into this prospectus, you should rely on
the information contained in the document that was filed later.
We
have filed the following documents with the SEC and they are incorporated herein by reference as of their respective dates of filing:
●
|
our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on March 29, 2021, as amended on May 10, 2021 (our “Annual
Report”);
|
|
|
●
|
our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed on May 14, 2021;
|
|
|
●
|
our Current Reports on Form 8-K filed on May
10, 2021, May
10, 2021, May
12, 2021, May
13, 2021 and May 20, 2021 (excluding any information deemed furnished and not filed pursuant to Item 2.02 or Item 7.01
of such Current Report on Form 8-K); and
|
|
|
●
|
the
descriptions of our securities contained as an exhibit to our Annual Report.
|
In
addition, all documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and before
the termination or completion of this offering of our securities shall be deemed to be incorporated by reference in this prospectus and
to be a part of it from the filing dates of such documents, except in each case for information contained in any such filing where we
indicate that such information is being furnished and is not to be considered “filed” under the Securities Exchange Act of
1934, as amended.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any subsequently
filed document that also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces such statement.
Any statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to constitute a
part of this prospectus. None of the information that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or any corresponding
information, either furnished under Item 9.01 or included as an exhibit therein, that we may from time to time furnish to the SEC will
be incorporated by reference into, or otherwise included in, this prospectus, except as otherwise expressly set forth in the relevant
document. Subject to the foregoing, all information appearing in this prospectus is qualified in its entirety by the information appearing
in the documents incorporated by reference.
Documents
incorporated by reference are available from us without charge, excluding all exhibits unless we have specifically incorporated by reference
the exhibit in this prospectus. You may obtain documents incorporated by reference in this prospectus by requesting them in writing or
by telephone from:
Inspired
Entertainment, Inc.
250
West 57th Street, Suite 415
New
York, New York 10107
Attention:
Corporate Secretary
(646)
565-3861
20,974,029
Shares
Inspired
Entertainment, Inc.
Common
Stock
PROSPECTUS
May 24, 2021
Inspired Entertainment (NASDAQ:INSE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Inspired Entertainment (NASDAQ:INSE)
Historical Stock Chart
From Apr 2023 to Apr 2024