CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS
Certain
statements and other information set forth in this prospectus supplement and the accompanying prospectus may relate to future
events and expectations, and as such constitute “forward-looking statements” within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”). Our forward-looking statements include, but are not limited to, statements regarding
our business strategy, plans and objectives and our expected or contemplated future operations, results, financial condition,
beliefs and intentions. In addition, any statements that refer to projections, forecasts or other characterizations or predictions
of future events or circumstances, including any underlying assumptions on which such statements are expressly or implicitly based,
are forward-looking statements. The words “anticipate”, “believe”, “continue”, “can”,
“could”, “estimate”, “expect”, “intend”, “may”, “might”,
“plan”, “possible”, “potential”, “predict”, “project”, “scheduled”,
“seek”, “should”, “would” and similar expressions, among others, and negatives expressions
including such words, may identify 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;
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our ability to compete effectively in our industries;
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the effect of evolving technology on our business;
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our ability to renew long-term contracts and retain customers, and secure new contracts and customers;
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our ability to maintain relationships with suppliers;
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our ability to protect our intellectual property;
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our ability to protect our business against cybersecurity threats;
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our ability to successfully grow by acquisition as well as organically;
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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;
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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 supplement, 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 SEC.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary contains selected information about us and this offering. Because this is a summary, it may not contain all the information
that may be important to you. You should read this entire prospectus supplement and the accompanying prospectus carefully, including,
but not limited to, the information set forth under our consolidated financial statements and the schedules and related notes,
“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 29, 2021 (as
amended by Amendment No. 1 on Form 10-K/A filed with the SEC on May 10, 2021), our Quarterly Report on Form 10-Q for the three
months ended March 31, 2021 filed with the SEC on May 14, 2021, both of which are incorporated by reference herein, and the other
information incorporated by reference into this prospectus supplement and the accompanying prospectus.
Overview
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
customer base includes regulated operators of lotteries, licensed sports bookmakers, gaming and bingo halls, casinos and regulated
online operators, adult gaming centers, pubs, holiday parks, and motorway service areas. Some of our key customers include William
Hill, SNAI, Sisal, Lottomatica, Betfred, Paddy Power and Betfair (each part of Flutter Entertainment), Genting, bet365, Sky Bet,
Fortuna, the Greek Organisation of Football Prognostics, Entain, the Pennsylvania Lottery, Bourne Leisure, Stonegate, Mitchells
& Butler, Marstons, Greene King, JD Wetherspoon, Parkdean Resort, Centre Parcs Resorts and Novomatic. Geographically, 70%
of our revenues (excluding $42.2 million of VAT-related revenue remitted to us by two of our major UK customers, to which we were
entitled because of a UK tax ruling, which created a rebate of value added tax that had otherwise been incorrectly applied to
certain gaming machines in their estate in the past) for the year ended December 31, 2020 were generated from our UK operations,
with the remainder generated from Italy, Greece and the rest of the world.
Our
products are designed to operate within applicable gaming and lottery regulations and our customers are regulated gaming or lottery
operators or are otherwise licensed to operate our products.
We
conduct business across different jurisdictions of which United Kingdom, Italy and Greece have historically contributed the most
significant recurring revenues. We are licensed or certified (as applicable) by the Gambling Commission in the United Kingdom,
and by the Hellenic Gaming Commission in Greece, and registered with L’Agenzia delle dogane e dei Monopoli in Italy. We
are licensed by regulators in other jurisdictions such as the Malta Gaming Authority, Licensing Authority of Gibraltar, the Alderney
Gambling Control Commission, the Belgian Commission, Autorité Des Marchés Financiers (Quebec) and we hold licenses
with the states of New Jersey, Illinois, Saskatchewan, Michigan and West Virginia. We are currently in the process of applying
for licensure in Pennsylvania and Alberta, where we expect to benefit from any future market growth.
Certain
product and company names referred to herein are trademarks™ or registered® trademarks of their respective holders.
Product
Overview
We
currently operate in four business segments: Gaming, Leisure, Virtual Sports and Interactive, as further described below.
Gaming
Segment
Our
Gaming segment supplies gaming terminals as well as gaming software and games for the terminals provided to betting offices, casinos,
gaming halls and high street adult gaming centers. It utilizes our Server Based Gaming (“SBG”) technology to supply
products to our customers’ global land-based gaming venues. SBG products offer an extensive portfolio of games through digital
terminals. Our games are currently deployed through more than 31,500 digital terminals. Because our SBG products are fully digital,
they interact with a central server and are provided on a “distributed” basis, which allows us to access a wide geographic
footprint through internet and proprietary networks.
Our
SBG game portfolio includes a broad selection of popular omni-channel slots titles including the CenturionTM game family and Super
Hot FruitsTM (featuring the Sizzling Hot SpinsTM game family). These games offer customers a wide range
of volatilities, return-to-player and other special features, which we collectively refer to as “game math.” We also
offer a range of more traditional casino games through our SBG network, such as roulette, blackjack and numbers games.
We
distribute games to devices through different game management systems (“GMS”), each tailored to a specific operator
or sector. Our CORETM GMS is designed for distributed street-gaming sectors and uses the Company’s cabinets in
combination with gaming content from the Company, as well as a wide portfolio of content from independent game developers. CORE-CONNECT
is our American Gaming Association G2S standard-based video lottery terminal (“VLT”) GMS, currently deployed in the
Greek VLT sector and North America. Our SBG products comply with all requirements in the UK (B2/B3), Italy (‘6B), Greece
(G2S) and Illinois (G2S).
Our
SBG terminals in the United Kingdom account for a material portion of all SBG terminal placements, and we offer over 150 games
for play across this portfolio. We are also a material supplier to customers in Greece and Italy. Over the past two years, we
have grown our business in North America where we have sold products in Illinois and to the Western Canada Lottery Corporation.
We offer SBG terminals such as the Flex4k curved screen, EclipseTM, ValorTM, OptimusTM, BlazeTM
and Sabre HydraTM, each offering a different size terminal, graphics, technology and price proposition.
Leisure
Segment
We
are a supplier of gaming terminals and amusement machines to the Leisure and Hospitality sectors and one of the largest operators
of “pay to play” gaming terminals and amusement machines in the UK. As of December 31, 2020, we supplied and operated
over 11,600 gaming terminals and 7,000 pool tables, prize vending and jukeboxes located in pubs, bingo halls, bowling centers,
family entertainment centers and adult gaming centers. We also service approximately 2,200 gaming terminals under maintenance
only contracts. The increasing majority of gaming terminals we operate are server based, allowing us to distribute content supplied
by our “in house” design studios as well as some of the most popular content titles from our strategic partners.
In
addition, we also supply and operate approximately 9,300 amusement machines and 2,200 gaming terminals in family entertainment
centers and adult gaming centers located in holiday parks, bowling centers and other entertainment venues. These include virtual
reality simulators and arcade games, redemption and skill with prize games, basketball, air hockey and cue sports. Commercial
arrangements across our Leisure segment are typically structured as either revenue participations or fixed fee rental agreements.
Our
customers in this segment include the vast majority of recognizable brands that participate in the geographies and sectors in
which we operate. These customers include large pub operators JD Wetherspoons, Stonegate Pub Company, Marstons PLC, Greene King,
Mitchells and Butler, Punch Taverns, Whitbread and Star Pubs and Bars (Heineken). In the Bingo sector, we supply gaming terminals
and services to Buzz Bingo and Mecca. We supply gaming terminals and services to transport hub operators, Moto and Welcome Break
and major airports including Heathrow. We also operate our own adult gaming centers under the Quicksilver brand in Extra Motorway
Services. We have commercial joint ventures with holiday park operators Parkdean Resorts and Bourne Leisure across their Haven
and Warner Hotels brands, where we supply machines and trained staff to manage and operate gaming machines and non-gaming machines.
Virtual
Sports Segment
Our
Virtual Sports business designs, develops, markets and distributes ultra-high-definition games that create an always-on sports
wagering experience in betting shops, other locations and online. Our Virtual Sports product comprises a complex software and
networking package that provides fixed odds wagering on an ultra-high definition computer rendering of a simulated sporting event,
such as soccer, football or basketball. Players can bet on the simulated sporting event, in both a streaming and on-demand environment,
overcoming the relative infrequency of live sporting events. We have developed this product using an award-winning TV and film
graphics team with advanced motion capture techniques.
We
believe we are one of the most innovative suppliers of Virtual Sports gaming products in the world. We offer a wide range of sports
and numbers games to approximately 32,000 retail venues as well as through various online websites. Our products are installed
in over 35 gaming jurisdictions worldwide, including the UK, Italy, Greece, Morocco, and the U.S.
Our
Virtual Sports game portfolio includes titles such as V-Play Soccer, V-Play Football, V-Play Basketball, Virtual Grand National
and V-Play NFLA, as well as greyhounds, other horse racing products, tennis, motor racing, cycling, cricket, speedway, golf and
darts. We have also licensed the use of images of certain sports brands in our games, including with the NFL Alumni. We also entered
into a partnership with the UK Jockey Club to create the Virtual Grand National, which has aired on live UK television since 2017.
Our
customers are many of the largest operators in lottery, gaming and betting worldwide. We are contracted to supply Virtual Sports
to mobile and online operators in the United Kingdom, the U.S. states of Nevada, Pennsylvania and New Jersey; Gibraltar and other
regulated EU sectors, including Italy, Greece and Poland; and other jurisdictions such as Turkey and Morocco. Virtual Sports can
be adapted to function in sports betting, lottery, or gaming environments and is therefore available to a wide range of customers
in both public and private implementations.
The
Virtual Sports events are capable of being offered to millions of our customers’ customers, through land-based, online and
mobile platforms, many of them available 24 hours per day, 7 days per week, and often concurrently within the same location or
interactive platform. We have multiple hosting solutions capable of fulfilling the product delivery needs of our customers including
our proprietary Virtual Plug and Play end to end online and mobile turnkey solutions. In addition, a cloud-based solution is available
to customers who require an XML sportsbook integration that is fully hosted and operated by the Company.
Our
Virtual Sports products are typically offered to operators on a participation basis, whereby we receive a portion of the gaming
revenues generated, plus an upfront software license fee. With our participation-driven business model, our Virtual Sports segment
produces approximately 94% of total revenue on a recurring basis under long-term contracts for which our standard term is three
years in duration. We have successfully renewed all of our key Virtual Sports contracts expiring over the last three years.
Interactive
Segment
Our
Interactive business uses offerings from our Gaming and Virtual Sports segments, as well as interactive-only content, via remote
gaming servers to allow online gaming operators to use our games and content online and on mobile devices worldwide. Our interactive
content includes a wide range of premium random number generated casino content from feature-rich bonus games to European-style
casino free spins and table games incorporating well-known first and third-party brands including 20p RouletteTM, Jagr’s
Super SlotTM, Super Hot FruitsTM and Reel King MegawaysTM. The Company releases several new titles
per month and new games can be seamlessly deployed to the full estate of operators and aggregators through its proprietary Virgo
RGS™. Games are available on over 170 websites across much of regulated Europe including the UK, Gibraltar, Malta, Spain,
Sweden, Italy, Germany, Greece and Belgium as well as in New Jersey. We expect to next go live in Michigan and West Virginia.
The
Company’s Virgo RGS™ is integrated with a number of best known casino brands, including William Hill, Entain, bet365,
Flutter, 888, Kindred, Gamesys, BetFred, Rank, Leo Vegas, OPAP and Stoiximan. We are also now live with six North American operators:
Bet MGM, Draft Kings, Caesars, Resorts, Mohegan, Unibet and Golden Nugget and with Loto Quebec in Canada.
For
more information about our business segments and their performance, please refer to our Annual Report on Form 10-K for the fiscal
year ended December 31, 2020 filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 on Form 10-K/A filed with the
SEC on May 10, 2021) and our Quarterly Report on Form 10-Q for the three months ended March 31, 2021 filed with the SEC on May
14, 2021, which are incorporated by reference into this prospectus supplement.
Our
Strategy
We
seek to deliver innovative and differentiated products that provide value to our customers and exciting experiences to their players
in multiple jurisdictions throughout the world while achieving long-term growth in revenues, profit and cash flow. We place great
emphasis on developing creative solutions, in terms of game content and play, that deliver and sustain superior performance through
operators across interactive and location-based channels. Our technology often allows us to update our games and operating software
remotely, keeping pace with evolving requirements in game play, security, technology and regulations. We seek to achieve these
goals as we:
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Extend
our positions in each of the sectors in which we operate by developing new content and products, which can often be utilized
across multiple distribution channels.
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Continue
to invest in content and technology in order to grow our existing customers’ revenues and penetrate new customers in
our existing markets.
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Add
new customers by expanding into underpenetrated markets.
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Pursue
targeted mergers and acquisitions to expand our product portfolio and distribution footprint.
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For
more information about our strategy and strategic priorities, please refer to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2020 filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 on Form 10-K/A filed with the SEC
on May 10, 2021) and our Quarterly Report on Form 10-Q for the three months ended March 31, 2021 filed with the SEC on May 14,
2021, which are incorporated by reference into this prospectus supplement.
Key
Factors Affecting Business Performance
We
generate revenue in four principal ways: (i) on a participation basis, (ii) on a fixed rental fee basis, (iii) through product
sales and (iv) through software license fees. Participation revenue generally includes a right to receive a share of our customers’
gaming revenue, typically as a share of net win but sometimes as a share of the handle or “coin in”. Under our participation
agreements, payments made to us are calculated based upon a percentage of the net win, which is the amount of earnings generated
from end-users playing the gaming machines, after adjusting for player winnings and relevant gaming taxes. Product sales include
the sale of new SBG terminals and associated parts to gaming and betting operators. Software license revenues are principally
related to our Virtual Sports product and to license sales of our SBG platform.
We
evaluate our business performance, resource allocation and capital spending on an operating segment level, where possible. We
use the operating results and identified assets of each operating segment to make prospective operating decisions. Although our
revenues and cost of sales (excluding depreciation and amortization) are reported exclusively by segment, we include an unallocated
column in our financial statements for certain expenses, including depreciation and amortization as well as selling, general and
administrative expenses. Unallocated balance sheet line items include items that are a shared resource and therefore not allocated
between operating segments.
For
information about our revenues, operating results, assets, liabilities and cash flows, see our consolidated financial statements
and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 29, 2021 (as
amended by Amendment No. 1 on Form 10-K/A filed with the SEC on May 10, 2021) and our Quarterly Report on Form 10-Q for the three
months ended March 31, 2021 filed with the SEC on May 14, 2021.
Our
Competitive Strengths
We
believe key factors that give us a competitive edge over other players in the gaming technology space include:
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Established
Presence across multiple Product Verticals
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Highly
and Increasingly More Diversified Business Underpinned by Longstanding Customer Relationships
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Substantial
Recurring Revenue Supported by Long-Term Participation-Based Contracts
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Proprietary
Technology and Track-Record of Strong Content Development
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Attractive
Economic Model to Drive Strong Performance Post COVID-19
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Positioned
To Benefit From Key Market Trends
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Proven
and Experienced Management Team
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For
more information about our competitive strengths, please refer to our Annual Report on Form 10-K for the fiscal year ended December
31, 2020 filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on May 10, 2021)
and our Quarterly Report on Form 10-Q for the three months ended March 31, 2021 filed with the SEC on May 14, 2021, which are
incorporated by reference into this prospectus supplement.
Corporate
Information
We
are headquartered in the United States, with principal operating facilities located in the United Kingdom, India and Italy. We
are a Delaware corporation with principal executive offices located at 250 West 57th Street, Suite 415 New York, New York 10107,
United States. Our telephone number is +1 (646) 565-3861 and our website is www.inseinc.com. The information contained
on, or that may be accessed through our website (or any other website referenced herein) is not part of, and is not incorporated
into, this prospectus supplement.
The
Company is publicly listed on the NASDAQ and had an equity market capitalization of approximately $241.7 million as of May 24,
2021 (based upon a closing stock price of $10.41 on that date).
COVID-19
Update
Governments
in certain of the jurisdictions in which our land-based customers operate have either (i) provided guidance as to the potential
timing for reopening land-based venues in such jurisdictions or (ii) reopened land-based venues with certain restrictions. As
of April 12, 2021, in the United Kingdom, licensed betting offices in England have reopened with certain restrictions including
operating two of four gaming machines per venue, limited dwell time of 15 minutes, as well as a maximum of two visits per day
per patron and an 8:00pm curfew. These restrictions remained in place until May 17, 2021. Gaming machines in pubs, holiday parks,
motorway services, Scottish betting offices and adult gaming centers across the United Kingdom opened on May 17, 2021 with social
distancing restrictions in place. It is currently anticipated that any social distancing restrictions will remain in place in
the United Kingdom until June 21, 2021. Furthermore, betting offices in Wales have reopened with certain social distancing restrictions
in place.
Recent
Developments
On
May 20, 2021 the Company closed a private offering of £235.0 million aggregate principal amount of 7.875% senior secured
notes due 2026 (the “Senior Secured Notes”). The Senior Secured Notes were issued by Inspired Entertainment (Financing)
plc (the “Issuer”), a wholly owned finance subsidiary of the Company, and guaranteed by the Company and certain of
its English and U.S. subsidiaries. The Company used the proceeds from the offering of the Senior Secured Notes (i) to repay its
existing £145.8 million senior secured term loan facility and €93.1 million senior secured term loan facility and accrued
interest thereon, (ii) to pay fees, commissions and expenses incurred in connection with the refinancing, and (iii) to close-out
derivative contracts entered into in connection with the existing term loan facilities. The Company intends to use the balance
of the proceeds for general corporate purposes. On May 20, 2021, in connection with the issuance of the Senior Secured Notes,
the Company, the Issuer and certain subsidiaries of the Company entered into a Super Senior Revolving Facility Agreement with
certain lenders, pursuant to which the lenders agreed to provide a secured revolving facility loan in an original principal amount
of £20 million (the “RCF Loans”). The RCF Loans will terminate on November 20, 2025.
The
Offering
Selling
Stockholder:
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The
Landgame Trust (Evan Davis, Trustee)(1)
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Common
Stock Offered by Selling Stockholder:
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5,406,633
shares (or 6,217,628 if the underwriters’ Over-Allotment Option to purchase up to an additional 810,995 shares is exercised
in full)
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Common
Stock to be Outstanding after this Offering:
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23,218,323
shares.
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Use
of Proceeds:
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The
Selling Stockholder will receive the proceeds from this offering. We will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Stockholder. See “Use of Proceeds” beginning on page S-14 and “Selling
Stockholder” beginning on page S-16 in this prospectus supplement for more information. Notwithstanding the foregoing,
in the event that all of the shares offered pursuant to this prospectus supplement are disposed of in this offering, Landgame
S.à r.l. will be entitled to receive any and all proceeds received on account of the sale of such shares, together
with all previous sales of shares of Common Stock originally held by The Landgame Trust (net of all expenses incurred),
up to the cost basis of Landgame S.à r.l in such shares (which is an amount equal to $10.00 per share) and any proceeds
in excess of this cost basis will be disbursed to the Company. In the event that the Company receives any such excess proceeds,
we intend to use such proceeds for general corporate purposes.
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Risk
Factors:
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See
“Risk Factors” beginning on page S-10 in this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference for a discussion of some of the factors you should carefully consider before deciding
to invest in our Common Stock.
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Listing:
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Our
common stock is listed on NASDAQ under the ticker symbol “INSE.”
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Mandatory
Redemption of Securities from Certain Investors:
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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; (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 (the “Board”), 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, 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” in the accompanying prospectus.
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(1)
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See
“Selling Stockholder” beginning on page S-16 of this prospectus supplement for additional information about
the Selling Stockholder.
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(2)
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The
number of shares of Common Stock outstanding will not change as a result of this offering (including if the underwriters exercise
their Over-Allotment Option). The number of shares of Common Stock to be issued and outstanding after the completion of this offering
(including if the underwriters exercise their Over-Allotment Option) is based on 23,218,323 shares of Common Stock issued and outstanding
as of May 24, 2021.
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Unless
otherwise indicated, all references in this prospectus supplement to the number and percentages of shares of Common Stock outstanding
do not give effect to, as of May 24, 2021:
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5,539,615
shares issuable upon the 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 Placement Warrants”). Each Private Placement
Warrant entitles its holder to purchase one-half of one share of the Company’s common stock at an exercise price of
$11.50 per whole share;
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3,999,950
shares issuable upon the exercise of 7,999,900 warrants originally issued as part of units in our initial public offering
(the “Public Warrants”). Each Public Warrant entitles its holder to purchase one-half of one share of the Company’s
common stock at an exercise price of $5.75 per half share;
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624,116
shares subject to outstanding restricted stock awards;
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4,314,814
shares subject to outstanding restricted stock unit awards;
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2,371,799
shares available for new grants under the Company’s equity incentive plan; and
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467,751
shares available for purchase under the Company’s employee stock purchase plan.
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In
addition, unless we specifically state otherwise, all information in this prospectus supplement assumes no exercise by the underwriters
of their Over-Allotment Option.
RISK
FACTORS
Investing
in our Common Stock involves a high degree of risk. Before deciding whether to invest in our Common Stock, you should consider
carefully the risks described below and discussed under the section captioned “Risk Factors” contained in our
most recent Quarterly Report on Form 10-Q filed with the SEC on May 14, 2021, our Annual Report on Form 10-K filed with the SEC
on March 29, 2021 (as amended by Amendment No. 1 to our Annual Report on Form 10-K/A filed with the SEC on May 10, 2021), and
in our other filings that are incorporated by reference in this prospectus supplement and the accompanying prospectus in its entirety,
together with the other information in this prospectus supplement, the accompanying prospectus, and the documents incorporated
by reference, and in any free writing prospectus that we have authorized for use in connection with this offering. The risks described
in these documents are not the only ones we face, but those that we consider to be material. Additional risks and uncertainties
that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect
our business. Past financial performance may not be a reliable indicator of future performance, and historical trends should not
be used to anticipate results or trends in future periods. If any of these risks actually occur, our business, financial condition,
results of operations or prospects could be adversely effected. This could cause the trading price of our Common Stock to decline,
resulting in a loss of all or part of your investment. Please also carefully read “Cautionary Note Regarding Forward-Looking
Statements” in this prospectus supplement.
As
disclosed in our Annual Report on 10-K filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 to our Annual Report
on Form 10-K/A filed with the SEC on May 10, 2021) under the section titled “Risk Factors,” our business and
results of operations may continue to be negatively affected by the COVID-19 pandemic. In addition, to the extent the ongoing
COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of
the other risks and uncertainties described in the “Risk Factors” section in our Annual Report on Form 10-K
filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 to our Annual Report on Form 10-K/A filed with the SEC on
May 10, 2021), which may materially and adversely affect our business and results of operations.
U.S.
FEDERAL TAX CONSIDERATIONS FOR NON-U.S. STOCKHOLDERS
The
following is a general discussion of the material U.S. federal income and certain estate tax consequences of the ownership and
disposition of shares of our Common Stock by a Non-U.S. Stockholder (as defined herein) that purchases shares of our Common Stock
during this offering. For purposes of this discussion, a “Non-U.S. Stockholder” is a beneficial owner of our Common
Stock that is or is treated for U.S. federal income tax purposes as:
●
an individual who is neither a citizen nor a resident of the United States;
●
a corporation created or organized under the laws of a jurisdiction other than the United States, any state thereof or the
District of Columbia;
●
an estate, other than an estate the income of which is subject to U.S. federal income taxation regardless of its source;
or
●
a trust, other than a trust (i) the administration of which is subject to the primary supervision of a court within the
United States and which has one or more U.S. persons who have the authority to control all substantial decisions of the
trust, or (ii) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United
States person (within the meaning of Section 7701(a)(30) of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”)).
This
discussion does not address the U.S. federal tax consequences to an entity treated as a partnership for U.S. federal income tax
purposes or to persons investing through such an entity. If an entity treated as a partnership holds our Common Stock, the tax
treatment of a partner will generally depend on the status of the partner and the activities of the partnership. A partner in
a partnership considering an investment in our Common Stock should consult its own tax advisors as to the U.S. federal income
and estate tax consequences of being a partner in a partnership that owns or disposes of our Common Stock.
In
addition, this discussion does not address the U.S. federal tax consequences to the Selling Stockholder or to any holder of our
Common Stock that is not a Non-U.S. Stockholder.
This
summary assumes that our Common Stock is held as a capital asset (generally, property held for investment). This summary is of
a general nature and thus does not address all of the U.S. federal income and estate tax considerations that might be relevant
to a Non-U.S. Stockholder in light of its particular circumstances or to a Non-U.S. Stockholder subject to special treatment under
U.S. federal tax laws (such as banks, insurance companies, dealers in securities or other Non-U.S. Stockholders that generally
mark their securities to market for U.S. federal income tax purposes, foreign governments, international organizations, tax-exempt
entities, “controlled foreign corporations,” “passive foreign investment companies,” regulated investment
companies, real estate investment trusts, certain former citizens or residents of the United States, or Non-U.S. Stockholders
that hold our Common Stock as part of a straddle, conversion transaction or constructive sale transaction or that purchase or
sell our Common Stock as part of a wash sale for U.S. federal tax purposes). Furthermore, this summary does not discuss any aspects
of U.S. federal gift, Medicare, state, local or non-U.S. taxation. In addition, this discussion does not address the alternative
minimum tax consequences of holding our Common Stock. This summary is based on current provisions of the Code, U.S. Treasury regulations
promulgated or proposed thereunder, judicial opinions, published positions of the U.S. Internal Revenue Service (the “IRS”)
and other applicable authorities, all of which are subject to change or differing interpretation, possibly with retroactive effect.
Each prospective purchaser of our Common Stock is advised to consult its own tax advisor with respect to the U.S. federal, state,
local and non-U.S. tax consequences of purchasing, owning and disposing of our Common Stock. No assurance exists that the IRS
will not challenge any of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, an opinion
of counsel with respect to the U.S. federal income or estate tax consequences to a Non-U.S. Stockholder of owning and disposing
of our Common Stock.
PROSPECTIVE
INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF U.S.
FEDERAL TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION
AND ANY APPLICABLE TAX TREATY.
Distributions
If
we make distributions on our Common Stock, the distributions will be dividends for U.S. federal income tax purposes to the extent
paid from current or accumulated earnings and profits. To the extent distributions exceed our current and accumulated earnings
and profits, they will constitute a return of capital that will first reduce a Non-U.S. Stockholder’s basis in our Common
Stock (determined separately for each share), but not below zero, and then will be treated as gain from the sale of stock (as
discussed further below).
Any
dividend paid to a Non-U.S. Stockholder with respect to our Common Stock generally will be subject to withholding tax at a 30%
rate (or such lower rate specified by an applicable income tax treaty). Generally, a Non-U.S. Stockholder must certify as to its
eligibility for reduced withholding under an applicable income tax treaty on a properly completed IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable. A Non-U.S. Stockholder that does not timely provide the applicable withholding agent with the certification,
but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate
claim for refund with the IRS. Non-U.S. Stockholders should consult their own tax advisors regarding their possible entitlement
to benefits under a tax treaty.
If,
however, the Non-U.S. Stockholder provides a valid IRS Form W-8ECI, certifying that the dividend is effectively connected with
the Non-U.S. Stockholder’s conduct of a trade or business within the United States (and, if an income tax treaty applies,
the gain is attributable to a permanent establishment or fixed base maintained by such Non-U.S. Stockholder in the United States),
and otherwise complies with applicable certification requirements, the dividend will not be subject to the withholding described
above. Instead, the dividend will be subject to U.S. federal income tax in the manner described below under “Effectively
Connected Income.”
Sale,
Exchange or Other Taxable Disposition of Our Common Stock
Except
as otherwise discussed below, a Non-U.S. Stockholder generally will not be subject to U.S. federal income tax on any gain realized
upon a sale, exchange or other taxable disposition of our Common Stock unless (i) such gain is effectively connected with the
Non-U.S. Stockholder’s conduct of a U.S. trade or business (and, if an income tax treaty applies, the gain is attributable
to a permanent establishment or fixed base maintained by such Non-U.S. Stockholder in the United States), (ii) the Non-U.S. Stockholder
is an individual who is present in the United States for a period or periods aggregating 183 days or more during the year in which
such sale, exchange or other taxable disposition occurs and certain other conditions are met, or (iii) we are or have been a “United
States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time during
the shorter of (x) the five-year period ending on the date of such sale, exchange or other disposition and (y) such Non-U.S. Stockholder’s
holding period with respect to our Common Stock, and, provided that our Common Stock is regularly traded on an established securities
market within the meaning of applicable U.S. Treasury regulations, such Non-U.S. Stockholder has held, directly or constructively,
at any time during said period, more than 5% of our Common Stock. We do not believe that we are or will become a USRPHC; however,
there can be no assurance in that regard.
Gain
described in clause (i) immediately above will be subject to U.S. federal income tax in the manner described below under “Effectively
Connected Income.” A Non-U.S. Stockholder described in clause (ii) immediately above will be subject to tax at a 30% rate
(or such lower rate specified by an applicable income tax treaty) on the net gain derived from the sale, exchange or other taxable
disposition, which may be offset by U.S.-source capital losses of the Non-U.S. Stockholder during the taxable year.
Effectively
Connected Income
Any
dividend with respect to, or gain recognized upon a sale, exchange or other taxable disposition of, our Common Stock that is effectively
connected with a trade or business carried on by a Non-U.S. Stockholder within the United States (and, if an income tax treaty
applies, that is attributable to a permanent establishment or fixed base maintained by such Non-U.S. Stockholder in the United
States) will be subject to U.S. federal income tax, based on the Non-U.S. Stockholder’s net effectively connected income,
generally in the same manner as if the Non-U.S. Stockholder were a U.S. person for U.S. federal income tax purposes. If a dividend
or gain is effectively connected with a U.S. trade or business of a Non-U.S. Stockholder that is a corporation for U.S. federal
income tax purposes, such corporate Non-U.S. Stockholder may also be subject to a “branch profits tax” on its effectively
connected earnings and profits (subject to certain adjustments) at a 30% rate (or such lower rate as may be specified by an applicable
income tax treaty). Non-U.S. Stockholders should consult their own tax advisors regarding any applicable tax treaties that may
provide for different rules.
FATCA
Withholding
Under
legislation commonly known as “FATCA,” a U.S. federal 30% withholding tax generally will be imposed on dividends with
respect to shares of our Common Stock paid to (i) a foreign financial institution (as defined in Section 1471(d)(4) of the Code
and the U.S. Treasury regulations promulgated thereunder), unless the foreign financial institution (a) enters into an agreement
with the U.S. Treasury Department to collect and disclose certain information regarding its U.S. account holders (including certain
account holders that are foreign entities that have U.S. owners) and satisfies certain other requirements or (b) is deemed to
be compliant with the requirements of FATCA, including pursuant to an intergovernmental agreement, and (ii) certain other non-U.S.
entities, unless the entities provide the payor with certain information regarding certain of their direct and indirect U.S. owners,
or certify that they have no such U.S. owners, and comply with certain other requirements. All Non-U.S. Stockholders generally
will be required to furnish certifications (generally on an IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI) or other documentation
to establish an exemption from withholding under FATCA. Even if a Non-U.S. Stockholder provides such certification, FATCA withholding
will still apply where our Common Stock is held through a non-U.S. broker (or other non-U.S. intermediary) that is not FATCA compliant.
Under certain circumstances, a Non-U.S. Stockholder may be eligible for refunds or credits of the tax.
Current
provisions of the Code and U.S. Treasury regulations that govern FATCA treat gross proceeds from the sale or other disposition
of instruments that can produce U.S.- source dividends (such as our Common Stock) as subject to FATCA withholding after December
31, 2018. However, under proposed U.S. Treasury regulations (the preamble to which specifies that taxpayers are permitted to rely
on them pending finalization), such gross proceeds are not subject to FATCA withholding.
Non-U.S.
Stockholders are encouraged to consult with their own tax advisors regarding the possible implications of FATCA on their investment
in shares of our Common Stock, including the potential applicability of any intergovernmental agreements entered into between
the United States and countries in which such applicable Non-U.S. Stockholders are resident or maintain a branch.
Information
Reporting and Backup Withholding
Annual
reporting to the IRS and to each Non-U.S. Stockholder will be required as to the amount of dividends paid to such Non-U.S. Stockholder
and the amount, if any, of tax withheld with respect to such dividends. This information may also be made available to the tax
authorities in the Non-U.S. Stockholder’s country of residence. Dividends generally are not subject to “backup withholding”
if the Non-U.S. Stockholder properly certifies as to its non-U.S. status (usually by completing an IRS Form W-8BEN, IRS Form W-8BEN-E
or IRS Form W-8ECI).
The
payment of the proceeds of the sale, exchange or other disposition of our Common Stock to or through the U.S. office of a broker
will be subject to both backup withholding (currently at a rate of 24%) and information reporting unless the Non-U.S. Stockholder
certifies its non-U.S. status on IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI or otherwise establishes an exemption.
Information reporting requirements, but generally not backup withholding, will also generally apply to payments of the proceeds
of a sale, exchange or other disposition of our Common Stock by non-U.S. offices of U.S. brokers or non-U.S. brokers with certain
types of relationships to the United States unless the Non-U.S. Stockholder certifies its non-U.S. status or otherwise establishes
an exemption. Certain Non-U.S. Holders (including corporations) are not subject to backup withholding and information reporting
requirements.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules from payments made to a Non-U.S.
Stockholder may be refunded or credited against such Non-U.S. Stockholder’s U.S. federal income tax liability, if any, provided
that the required information is timely furnished to the IRS.
Estate
Tax
A
Non-U.S. Stockholder who is an individual should note that shares of our Common Stock (i) owned and held by such individual or
(ii) otherwise includible in such individual’s gross estate for U.S. federal estate tax purposes (for example, where such
shares are owned and held by a trust funded by such individual and with respect to which the individual has retained certain interests
or powers), generally will be, absent an applicable treaty, treated as U.S.-situs property subject to U.S. federal estate tax.
Accordingly, Non-U.S. Stockholders who are individuals may be subject to U.S. federal estate tax on all or a portion of the value
of our Common Stock owned, directly or indirectly, at the time of their death. Prospective investors who are non-resident alien
individuals (or entities includible in such an individual’s gross estate for U.S. federal estate tax purposes) are urged
to consult their own tax advisors concerning the potential U.S. federal estate tax consequences of owning our Common Stock.
USE
OF PROCEEDS
We
will not be selling any shares of Common Stock in this offering and will not receive any proceeds from the sale of the shares offered
pursuant to this prospectus supplement. The Selling Stockholder will receive all of the proceeds from the sale of the shares of Common
Stock offered by this prospectus supplement. We will be reimbursed by Landgame S.à r.l. for all reasonable and documented
out-of-pocket costs, expenses and fees reasonably incurred in connection with this offering. The Selling Stockholder is responsible
for any underwriting discounts or selling commissions and brokerage fees related to the offer and sale of their shares. For information
about the Selling Stockholder, see “Selling Stockholder” beginning on page S-16 of this prospectus supplement.
Notwithstanding
the foregoing, in the event that all of the shares offered pursuant to this prospectus supplement are disposed of in this offering,
Landgame S.à r.l. will be entitled to receive any and all proceeds received on account of the sale of such shares, together
with all previous sales of shares of Common Stock originally held by The Landgame Trust (net of all expenses incurred), up to
the cost basis of Landgame S.à r.l in such shares (which is an amount equal to $10.00 per share) and any proceeds in excess
of this cost basis will be disbursed to the Company. In the event that the Company receives any such excess proceeds, we intend
to use such proceeds for general corporate purposes.
DILUTION
Because
we will not be selling any shares of Common Stock in this offering, the offering will not result in any dilution of equity ownership
to existing stockholders.
SELLING
STOCKHOLDER
The
following table sets forth (i) the number of shares of our Common Stock beneficially owned by the Selling Stockholder prior to this offering,
as of May 24, 2021, based on the Company’s records, the public filings of the Selling Stockholder and information previously
furnished to us by the Selling Stockholder, (ii) the number of shares of Common Stock being offered by the Selling Stockholder, including
its donees, pledgees, transferees or other successors-in-interest, pursuant to this prospectus supplement and (iii) the number of shares
of our Common Stock beneficially owned by the Selling Stockholder after this offering. The Selling Stockholder is not making any representation
that any shares covered by this prospectus supplement will be offered for sale. The Selling Stockholder reserves 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 (i) the 5,406,633 shares
offered hereunder are sold as contemplated herein and (ii) that the underwriters do not exercise their Over-Allotment Option to purchase
any additional shares of Common Stock within 30 days of the date of this prospectus supplement.
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, the Selling Shareholder named in the table has sole voting
and investment power with respect to the shares of Common Stock beneficially owned by it. Except as described in the footnotes
to the following table and under “Material Relationship with Landgame S.à r.l.” 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 supplement. The inclusion of any shares of Common Stock in this table does not
constitute an admission of beneficial ownership for the person named below.
Our
calculation of the percentage of beneficial ownership is based on 23,218,323 shares of Common Stock outstanding as of May 24,
2021.
|
|
Shares Beneficially Owned
Prior to the Offering(3)
|
|
|
Number of Shares Available Pursuant to this Prospectus
|
|
|
Shares Beneficially
Owned After the
Offering
|
|
Name of Selling Stockholder
|
|
Number
|
|
|
%
|
|
|
Supplement(4)
|
|
|
Number(4)
|
|
|
%(4)
|
|
The Landgame Trust (Evan Davis, Trustee) (1)(2)
|
|
|
6,217,628
|
|
|
|
26.78
|
%
|
|
|
5,406,633
|
|
|
|
810,995
|
|
|
|
3.49
|
%
|
(1)
|
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).
|
|
|
(2)
|
Reflects
shares issued as consideration in connection with the acquisition of Inspired Gaming Group by Hydra Industries Acquisition
Corp. on December 23, 2016.
|
|
|
(3)
|
Derivative
securities such as warrants and RSUs that are exercisable or convertible into shares of common stock within 60 days of the
date as of which information is provided in this table are deemed to be beneficially owned and outstanding for purposes of
computing the ownership of the person holding such securities but are not deemed to be outstanding for purposes of computing
the ownership of any other person. The shares that were issued pursuant to grants of restricted stock under our 2016 Long-Term
Incentive Plan are included in the outstanding shares of common stock (such shares carry voting rights but remain subject
to vesting requirements including based on satisfaction of stock price performance targets).
|
|
|
(4)
|
Assumes
that the underwriters do not exercise their Over-Allotment Option to purchase any additional shares of Common Stock. If the
underwriters exercise their Over-Allotment Option in full, the total shares to be sold in the offering will be 6,217,628.
|
If
all the shares of Common Stock offered by this prospectus supplement are sold and the underwriters exercise their Over-Allotment
Option in full, then after this offering the Selling Stockholder has advised us that it will no longer hold a beneficial ownership
in any shares of our Common Stock.
Material
Relationship with Landgame S.à r.l.
In
the past we had a material relationship with Landgame S.à r.l. Landgame S.à r.l. had the right to designate directors
to the Company’s Board under a 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).
UNDERWRITERS
The
Selling Stockholder is offering the shares of Common Stock described in this prospectus supplement through underwriters. We, the
Selling Stockholder and Landgame S.à r.l. intend to enter into an underwriting agreement with the underwriters. Under the
terms and subject to the conditions in the underwriting agreement, the underwriters named below have agreed to purchase and the
Selling Stockholder has agreed to sell to them the number of shares indicated below:
|
|
Number of Shares
|
|
Name
|
|
|
|
|
B. Riley Securities, Inc.
|
|
|
3,514,312
|
|
Macquarie Capital (USA) Inc.
|
|
|
756,929
|
|
Craig-Hallum Capital Group LLC
|
|
|
378,464
|
|
Roth Capital Partners, LLC
|
|
|
378,464
|
|
Union Gaming Securities, LLC
|
|
|
378,464
|
|
|
|
|
|
|
Total
|
|
|
5,406,633
|
|
The
underwriters are offering the shares of Common Stock subject to their acceptance of the shares from the Selling Stockholder. The
underwriting agreement provides that the obligation of the underwriters to pay for and accept delivery of the shares of Common
Stock offered by this prospectus supplement are subject to the approval of certain legal matters by its counsel and to certain
other conditions. The underwriters are obligated to take and pay for all of the shares of Common Stock offered by this prospectus
supplement if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the
underwriter’s Over-Allotment Option described below.
The
Selling Stockholder has also granted the underwriters an Over-Allotment Option to buy up to 810,995 additional shares of its Common
Stock. The underwriters may exercise this Over-Allotment Option at any time and from time to time during the 30-day period from
the date of this prospectus supplement. If any additional shares of Common Stock are purchased from the Selling Stockholder, the
underwriters will offer the additional shares of Common Stock owned by the Selling Stockholder on the same terms as those on which
the shares are being offered.
The
underwriters initially propose to offer part of the shares of Common Stock directly to the public at the offering price listed on the
cover page of this prospectus supplement and part to certain dealers at a price that represents a concession not in excess of $0.2775
per share under the public offering price. After the initial offering of the shares of Common Stock, the offering price and other
selling terms may from time to time be varied by the underwriters. Sales of Common Stock made outside of the United States may be made
by affiliates of the underwriters.
In connection with this offering, the underwriters
or their affiliates may purchase shares in the offering to be held for investment purposes. Any such purchases will be made at
the public offering price.
We expect that delivery of the shares will be made
against payment therefor on or about the third business day in the United States following the date of pricing of the common shares
(this settlement cycle being referred to as “T+3”). Under Rule 15c6-1 of the Exchange Act, trades in the secondary
market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers
who wish to trade their common shares on the date of pricing of the offering will be required, by virtue of the fact that the common
shares initially will settle in T+3, to specify an alternate settlement cycle at the time of any such trade to prevent a failed
settlement. Purchasers of the common shares who wish to trade their common shares on the date of pricing should consult their own advisor.
Commissions
and Expenses
The
following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before
expenses to the Selling Stockholder, assuming no exercise or full exercise of the option to purchase additional shares of Common
Stock by the underwriters. These amounts are shown assuming both no exercise and full exercise of the underwriter’s Over-Allotment
Option (i.e. to purchase up to an additional 810,995 shares of Common Stock).
|
|
|
|
|
Total
|
|
|
|
Per
Share
|
|
|
No
Exercise
|
|
|
Full
Exercise
|
|
Public offering price
|
|
$
|
9.2500
|
|
|
$
|
50,011,355.2500
|
|
|
$
|
57,513,059.0000
|
|
Underwriting discounts and commissions to be paid by the Selling Stockholder
|
|
$
|
0.4625
|
|
|
$
|
2,500,567.7625
|
|
|
$
|
2,875,652.9500
|
|
Proceeds, before expenses, to the Selling Stockholder
|
|
$
|
8.7875
|
|
|
$
|
47,510,787.4875
|
|
|
$
|
54,637,406.0500
|
|
We
estimate that the total expenses of the offering will be
approximately $750,000. We will be reimbursed by Landgame S.à r.l. for all reasonable and documented out-of-pocket costs,
expenses and fees reasonably incurred in connection with this offering. Landgame S.à r.l. has agreed to pay
out-of-pocket, accountable, bona fide expenses actually incurred by the underwriters in the offering in an amount not to
exceed $150,000 for fees and disbursements of counsel to the underwriters.
Our
Common Stock is listed on NASDAQ under the ticker symbol “INSE.”
Lock-Up
Agreement
We,
all of our directors and executive officers, and the Selling Stockholder have agreed that, without the prior written consent of
B. Riley Securities, Inc., we and they will not, during the period ending 30 days after the date of this prospectus supplement
(the “restricted period”):
|
●
|
offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common
stock or any securities convertible into or exercisable or exchangeable for shares of common stock;
|
|
|
|
|
●
|
enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of the common stock; or
|
|
|
|
|
●
|
with
respect to the Company, file any registration statement with the Securities and Exchange Commission relating to the offering
of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock;
|
whether
any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise.
In addition, each such person other than the Company agrees that, without the prior written consent of B. Riley Securities, Inc.,
such person will not, during the restricted period, make any demand for, or exercise any right with respect to, the registration
of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock.
The
restrictions described in the immediately preceding paragraph to do not apply to:
|
●
|
the
sale of shares to the underwriter;
|
|
|
|
|
●
|
the
registration on Form S-8 of the Company’s 2021 Omnibus Incentive Plan or an amendment of any Form S-8 of the Company;
|
|
|
|
|
●
|
the
issuance by the Company of shares of common stock upon the exercise of an option or a warrant or the conversion of a security
outstanding on the date of this prospectus supplement of which the underwriter has been advised in writing;
|
|
|
|
|
●
|
transactions
by any person other than the Company relating to shares of common stock or other securities acquired in open market transactions
after the completion of the offering of the shares; provided that no filing under Section 16(a) of the Exchange Act, is required
or voluntarily made in connection with subsequent sales of the common stock or other securities acquired in such open market
transactions;
|
|
|
|
|
●
|
(A)
transfers by any person other than the Company of shares of common stock or any securities convertible into common stock as
a bona fide gift, (B) distribution by any person other than the Company of shares of common stock or any security convertible
into common stock to limited partners or stockholders of such person or (C) the issuance by the Company of shares of common
stock in connection with the acquisition of another business, the merger of the Company with or into another company or a
similar transaction, provided that the aggregate number of shares of common stock issued pursuant to this clause (C) shall
not exceed 7.5% of the total number of outstanding shares of common stock issued and outstanding as of the date of this prospectus
supplement, provided that, in the case of any transfer or distribution pursuant to clause (A), (B) or (C), (i) each donee,
distributee, purchaser or recipient, as applicable, shall enter into a written agreement accepting the restrictions set forth
in the immediately preceding paragraph and this paragraph and (ii) no filing under Section 16(a) of the Exchange Act, reporting
a reduction in beneficial ownership of shares of common stock, is required or voluntarily made in respect of the transfer
or distribution during the restricted period;
|
|
●
|
the
negotiation and/or execution of any definitive agreement by the Company in connection with the acquisition of another business,
the merger of the Company with or into another company or a similar transaction pursuant to which the Company is, or may be,
required to issue any shares of its common stock, provided that (i) the consummation of such acquisition, merger or similar
transaction is subject to a condition that such acquisition, merger or similar transaction shall be put to a vote of the holders
of the Company’s capital stock entitled to vote generally in the election of the Company’s directors and shall
be approved by a majority of the votes cast by such holders and (ii) such agreement does not provide for the issuance, transfer
or disposition, directly or indirectly, of any shares of common stock during the restricted period;
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grants
or issuances of securities pursuant to awards or in settlement thereof under the Company’s 2016 Long-Term Incentive
Plan, Second Long-Term Incentive Plan, Employee Stock Purchase Plan, 2021 Omnibus Incentive Plan or any other incentive compensation
plan of the Company in effect as of the date of this prospectus supplement and described in the accompanying prospectus; or
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the
establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of common stock;
provided that (i) such plan does not provide for the transfer of common stock during the restricted period and (ii) to the
extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment
of such plan, such announcement or filing shall include a statement to the effect that no transfer of common stock may be
made under such plan during the restricted period.
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B.
Riley Securities, Inc., in its sole discretion, may release the common stock and other securities subject to the lock-up agreements
described above in whole or in part at any time.
Stabilization
In
order to facilitate the offering of the Common Stock, the underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of the Common Stock. Specifically, the underwriters may sell more shares than they are obligated to
purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater
than the number of shares available for purchase by the underwriters under the Over-Allotment Option. The underwriters can close
out a covered short sale by exercising the Over-Allotment Option or purchasing shares in the open market. In determining the source
of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares
compared to the price available under the Over-Allotment Option. The underwriters may also sell shares in excess of Over-Allotment
Option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the
open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward
pressure on the price of the Common Stock in the open market after pricing that could adversely affect investors who purchase
in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, shares of
Common Stock in the open market to stabilize the price of the Common Stock. These activities may raise or maintain the market
price of the Common Stock above independent market levels or prevent or retard a decline in the market price of the Common Stock.
The underwriters are not required to engage in these activities and may end any of these activities at any time.
Indemnification
We,
the Selling Stockholder and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities
under the Securities Act.
Electronic
Prospectus
A
prospectus in electronic format may be made available on websites maintained by the underwriters, or selling group members, if
any, participating in this offering. The underwriters may agree to allocate a number of shares of Common Stock for sale to their
online brokerage account holders.
Other
Relationships
The
underwriters and their affiliates are full service financial institutions engaged in various activities, which may include securities
trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment,
hedging, financing, and brokerage activities. The underwriters and their affiliates have, from time to time, performed, and may
in the future perform, various financial advisory and investment banking services for us, for which they received or will receive
customary fees and expenses.
In
addition, in the ordinary course of their various business activities, the underwriters and their affiliates may make or hold
a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments
(including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions
in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The
underwriters and theirs affiliates may also make investment recommendations or publish or express independent research views in
respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions
in such securities and instruments.
Selling
Restrictions
Canada
(Alberta, British Columbia, Manitoba, Ontario and Québec Only)
Notice
to Prospective Investors in Canada
This
document constitutes an “exempt offering document” as defined in and for the purposes of applicable Canadian securities
laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with
the offer and sale of the shares of common stock described herein (the “Securities”). No securities commission or
similar regulatory authority in Canada has reviewed or in any way passed upon this document or on the merits of the Securities
and any representation to the contrary is an offence.
Canadian
investors are advised that this document has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting
Conflicts (“NI 33-105”). Pursuant to section 3A.3 of NI 33-105, this document is exempt from the requirement that
the issuer and the underwriters in the offering provide Canadian investors with certain conflicts of interest disclosure pertaining
to “connected issuer” and/or “related issuer” relationships as may otherwise be required pursuant to subsection
2.1(1) of NI 33-105.
Resale
Restrictions
The
offer and sale of the Securities in Canada are being made on a private placement basis only and are exempt from the prospectus
requirement under applicable Canadian securities laws. Any resale of Securities acquired by a Canadian investor in this offering
must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus
requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus
requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain
circumstances apply to resales of the Securities outside of Canada.
Representations
of Purchasers
Each
Canadian investor who purchases the Securities will be deemed to have represented to us, the Selling Stockholder and each dealer
from whom a purchase confirmation is received, as applicable, that the investor (i) is purchasing as principal, or is deemed to
be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to
resale or redistribution; (ii) is an “accredited investor” as such term is defined in section 1.1 of National Instrument
45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii)
is a “permitted client” as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements,
Exemptions and Ongoing Registrant Obligations.
Taxation
and Eligibility for Investment
Any
discussion of taxation and related matters contained in this document does not purport to be a comprehensive description of all
of the tax considerations that may be relevant to a Canadian investor when deciding to purchase the Securities and, in particular,
does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a
resident, or deemed resident, of Canada of an investment in the Securities or with respect to the eligibility of the Securities
for investment by such investor under relevant Canadian federal and provincial legislation and regulations.
Rights
of Action for Damages or Rescission
Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this
prospectus supplement and the accompanying prospectus (including any amendment thereto) contains a misrepresentation, provided
that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities
legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities
legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Personal
Information
Prospective
Canadian purchasers are advised that: (a) we may be required to provide personal information pertaining to the purchaser as required
to be disclosed in Schedule 1 of Form 45-106F1 under NI 45-106 (including its name, address, telephone number, email address,
if provided, and the number and type of securities purchased, the total purchase price paid for such securities, the date of the
purchase and specific details of the prospectus exemption relied upon under applicable securities laws to complete such purchase)
(“personal information”), which Form 45-106F1 may be required to be filed by us under NI 45-106, (b) such personal
information may be delivered to the securities regulatory authority or regulator in accordance with NI 45-106, (c) such personal
information is being collected indirectly by the securities regulatory authority or regulator under the authority granted to it
under the securities legislation of the applicable legislation, (d) such personal information is collected for the purposes of
the administration and enforcement of the securities legislation of the applicable jurisdiction, and (e) the purchaser may contact
the applicable securities regulatory authority or regulator by way of the contact information provided in Schedule 2 to Form 45-106F1.
Prospective Canadian purchasers that purchase securities in this offering will be deemed to have authorized the indirect collection
of the personal information by each applicable securities regulatory authority or regulator, and to have acknowledged and consented
to such information being disclosed to the Canadian securities regulatory authority or regulator, and to have acknowledged that
such information may become available to the public in accordance with requirements of applicable Canadian laws.
Language
of Documents
Upon
receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing
or relating in any way to the sale of the Securities described herein (including for greater certainty any purchase confirmation
or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien
confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant
de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant,
pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.
LEGAL
MATTERS
Certain
legal matters will be passed upon for us by Sidley Austin LLP, New York, New York. Certain legal matters will be passed upon for
the Selling Stockholder by Willkie Farr & Gallagher LLP, New York, New York. Certain legal matters will be passed upon for
the underwriters by Baker McKenzie LLP, London, United Kingdom.
EXPERTS
The
audited consolidated balance sheets of Inspired Entertainment, Inc. and its 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 fiscal years ended December 31, 2020 and 2019, and the related notes thereto appear in our Annual Report on Form 10-K
as of and for the year ended December 31, 2020 filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 to our Annual
Report on Form 10-K/A filed with the SEC on May 10, 2021) 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
have filed with the SEC two registration statements (including amendments thereto) on Form S-3 (333-256175 and
333-217215) under the Securities Act with respect to the shares of Common Stock offered by this prospectus supplement. This prospectus
supplement and the accompanying prospectus do not contain all the information set forth in the registration statements (including
the amendments thereto). Whenever a reference is made in this prospectus supplement or the accompanying prospectus to any of our
contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the
registration statements for a copy of such contract, agreement or other document.
Because
we are subject to the information and reporting requirements of the Exchange Act, we file annual, quarterly and current reports, proxy
statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website
at http://www.sec.gov. Those filings are also available to the public on, or accessible through, our website at www.inseinc.com.
The information contained on, or that may be accessed through our website (or any other website referenced herein) is not part of, and
is not incorporated into, this prospectus supplement. You may also read and copy the registration statements and the exhibits
and schedules to the registration statements, and any document we file, at the SEC’s Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference
Room.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
“incorporate by reference” into this prospectus supplement and the accompanying 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 supplement and the accompanying prospectus. Some information contained in this prospectus supplement
and the accompanying prospectus updates the information incorporated by reference, and information that we file subsequently with the
SEC will automatically update this prospectus supplement and the accompanying prospectus. In other words, in the case of a conflict or
inconsistency between information set forth in this prospectus supplement and the accompanying prospectus and information that we file
later and incorporate by reference into this prospectus supplement, 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:
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our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 29, 2021(as amended by
Amendment No. 1 on Form 10-K/A filed with the SEC on May 10, 2021);
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our
Quarterly Report on Form 10-Q for the three months ended March 31, 2021 filed with the SEC on May 14, 2021;
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our
Current Reports on Form 8-K filed on February 26, 2021, March 11, 2021, May 7, 2021, May 10, 2021 (regarding the Company’s
results for the quarter ended March 31, 2021), May 12, 2021, May 13, 2021 and May 20, 2021;
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the
information specifically incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December
31, 2020 from our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 12, 2021; and
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the
descriptions of our securities contained as an exhibit to our Annual Report on Form 10-K for the fiscal year ended December
31, 2020 filed with the SEC on March 29, 2021 (as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on May 10, 2021).
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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 supplement and the accompanying 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 Exchange Act.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus supplement and the
accompanying prospectus shall be deemed modified, superseded or replaced for purposes of this prospectus supplement to the extent
that a statement contained in this prospectus supplement or the accompanying prospectus, or in any subsequently filed document
that also is deemed to be incorporated by reference in this prospectus supplement or the accompanying 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 supplement and the accompanying 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 supplement and the accompanying prospectus, except as otherwise expressly set
forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus supplement and the accompanying
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 supplement and the accompanying prospectus. You may obtain documents incorporated
by reference in this prospectus supplement and the accompanying 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
5,406,633
Shares
Inspired
Entertainment, Inc.
Bookrunners
B.
Riley Securities
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Macquarie
Capital
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Co-Managers
Craig-Hallum
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Roth
Capital Partners
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Union
Gaming
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May
26, 2021
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:
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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;
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government
regulation of our industries;
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our
ability to compete effectively in our industries;
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the
effect of evolving technology on our business;
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our
ability to renew long-term contracts and retain customers, and secure new contracts and customers;
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our
ability to maintain relationships with suppliers;
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our
ability to protect our intellectual property;
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our
ability to protect our business against cybersecurity threats;
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our
ability to successfully grow by acquisition as well as organically;
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fluctuations
due to seasonality;
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our
ability to attract and retain key members of our management team;
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our
need for working capital;
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our
ability to secure capital for growth and expansion;
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changing
consumer, technology and other trends in our industries;
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our
ability to successfully operate across multiple jurisdictions and markets around the world;
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changes
in local, regional and global economic and political conditions; and
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other
factors.
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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
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Inspired
Entertainment, Inc.
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Shares
of common stock offered by the selling stockholders
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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).
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Shares
issuable upon exercise of Public Warrants
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3,999,950
shares issuable upon the exercise of 7,999,900 Public Warrants.
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Use
of proceeds
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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.
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Mandatory
Redemption of Securities from Certain Investors
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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”.
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Market
for our common stock
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Our
shares of common stock are currently listed on NASDAQ, under the ticker symbol “INSE”.
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Risk
Factors
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Any
investment in the securities offered hereby involves high risks. You should carefully consider the information set forth
under “Risk Factors”.
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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:
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5,539,615
shares issuable upon the exercise of the Private Warrants;
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3,999,950
shares issuable upon the exercise of the Public Warrants;
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624,116
shares subject to outstanding restricted stock awards;
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4,314,814
shares subject to outstanding restricted stock unit awards;
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2,371,799
shares available for new grants under the Company’s equity incentive plan; and
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467,751
shares available for purchase under the Company’s employee stock purchase.
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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)
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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;
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(ii)
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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;
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(iii)
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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;
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(iv)
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560,000
shares acquired by certain institutional and accredited investors (the “Investors”) from the Hydra Sponsor in
connection with the Business Combination;
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(v)
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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
†
|
|
|
|
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:
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the
name of the selling stockholder;
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the
number of shares being offered;
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the
terms of the offering;
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the
names of the participating underwriters, broker-dealers or agents;
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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;
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the
public offering price; and
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other
material terms of the offering.
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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:
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in
whole and not in part;
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at
a price of $0.01 per warrant;
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upon
not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant
holder; and
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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.
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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:
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no
cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
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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;
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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;
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limiting
the liability of, and providing indemnification to, our directors and officers;
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specifying
the Court of Chancery of the State of Delaware as the exclusive forum for adjudication of disputes;
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controls
over the procedures for the conduct and scheduling of stockholder meetings; and
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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.
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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:
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the
issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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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.
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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:
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1%
of the total number of shares of common stock then outstanding, or
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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.
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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:
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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”);
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our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed on May 14, 2021;
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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
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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
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