Tag: Irata LLC

Atari enters into an agreement to acquire Night Dive Studios and announces its intention to proceed with the issuance of €30 M bonds convertible into new Atari shares

PARIS, FRANCE (March 22, 2023 – 11.00 pm CET) – Atari® (the “Company”) — one of the world’s most iconic consumer brands and interactive entertainment producers — announced that it has entered into an agreement to acquire 100% of Night Dive Studios Inc. (“Night Dive”), a full service game development and publishing company based in Vancouver, Washington, USA.

In addition, Atari, SA also announced that it intends to proceed in the near-term with a €30 million bond issue convertible into new shares of Atari (the “Convertible Bonds”) in order to meet with its capital needs in the context of the implementation of its new growth strategy and refinancing of its debt.

AGREEMENT SIGNED TO ACQUIRE NIGHT DIVE STUDIOS

Led by industry veterans Stephen Kick and Larry Kuperman, Night Dive is a full service development and publishing company with expertise in restoring, optimizing, and publishing classic video games. Night Dive has published over 100 titles and has garnered critical acclaim for their releases of seminal industry and fan-favorite titles including System Shock, Doom 64, and Quake.

Night Dive’s most recent project is a remastered version of classic FPS game System Shock, which is one of the most-anticipated retro releases of 2023. System Shock is now available for pre-order on Steam, GOG and Epic Games.

A key to the success of Night Dive is their proprietary KEX engine that makes classic games playable on modern hardware and gives the studio the ability to enhance and improve upon the original to meet the expectations of contemporary players. The studio’s reputation and deep industry knowledge have made them a go-to partner for some of the largest names in gaming and media and allowed them to develop a diversified portfolio of titles.

For the fiscal year ended December 2022, Night Dive has reported revenue of approximately US$3.0 million1. The founders own 87% of the Company’s shares while Wade Rosen, Chairman and CEO of Atari, owns a minority stake of 13%2.

With this acquisition Atari will enrich its large library of owned IP, be able to leverage Night Dive’s proprietary technology, and utilize Night Dive’s publishing capabilities to support Atari’s retro-focused growth strategy.

This acquisition has been approved unanimously by the disinterested members of the board of Atari, it being specified that Wade Rosen did not participate to the vote3.

Wade Rosen, Chairman and CEO of Atari, commented: “Night Dive’s proven expertise and successful track record in commercializing retro IP is well-aligned with Atari’s strategy and I am confident that their combined talent, technology and IP portfolio will contribute to Atari’s future success.”

Stephen Kick and Larry Kuperman, principals of Night Dive commented: “Night Dive and Atari have a long history together and we know that Atari shares our passion for retro games and our focus on producing high-quality new and remastered games that do justice to the original IP. As we look to grow our business and expand our capabilities, we could think of no better long-term partner than Atari.”

TERMS AND TIMING OF THE ACQUISITION

The purchase price of Night Dive will consist of (i) an initial consideration of US$10 million payable half in cash and half in Atari shares at the closing of the acquisition (see below) plus (ii) an earn-out of up to US$10 million, payable in cash over the next three years based on the future performance of Night Dive.

It is expected that the acquisition of Night Dive will be completed in April 2023.

FINANCING OF THE ACQUISITION

  • The initial consideration will be paid half in cash (for US$5 million) and half in newly issued Atari ordinary shares (for US$5 million)4. The calculation of the number of Atari shares to be issued will be based on the 20-day volume weighted average price of Atari shares on Euronext Growth prior to the tenth day prior to the closing of the transaction.
  • The new Atari shares will be issued by the Company, represented by the board of directors of Atari, through a contribution in kind (apport en nature) of Night Dive shares to Atari acting pursuant to the 18th resolution of Atari’s combined shareholders’ meeting held on September 27, 2022 (the “AGM“) and on the basis of the reports of a court-appointed contribution auditor (commissaire aux apports) on the value of the contribution in kind and the fairness of the exchange ratio5.
  • The Company and Irata LLC, a holding company controlled by Wade Rosen (“Irata”), have agreed that Irata intends to provide bridge financing to Atari for the payment of the initial consideration, or $5 million.

CONVERTIBLE BONDS

The Company intends to issue €30 million in Convertible Bonds through a public offering in France with a priority subscription period (offre au public avec délai de priorité) for all the shareholders of Atari.

  • A prospectus in relation to the Convertible Bonds offering will be prepared and subject to the AMF approval;
  • The issuance of the Convertible Bonds will occur shortly after the completion of the acquisition;
  • The Convertible Bonds will be issued with a priority subscription period for all shareholders for a period of three trading days (that does not result in the creation of negotiable rights) through a public offering in France (only);
  • The main shareholder of Atari, Irata LLC, holding 29.2% of the share capital of Atari, has indicated that it intends to subscribe its prorata share and to provide a firm underwriting for a number of Convertible Bonds equal to at least to 75% of the total amount of the offering;
  • It is the intent that Irata will undertake contractually and irrevocably vis-à-vis the Company not to convert its Convertible Bonds into Atari shares before at least the 25th of June 2025.

The amount raised through the Convertible Bonds will mainly be used to:

  • Reimburse the $5 million bridge financing provided by Irata in the context of the acquisition and finance future potential acquisitions Atari may consider;
  • Continued investment in growth initiatives, notably in the development of more than 12 new games expected to be launched in the next 18 months;
  • General cash requirements and financial flexibility necessary to pursue the transformation plan;
  • Reimburse the shareholder loans granted by Irata6 previously granted in accordance with its support commitment, and accrued interests on these loans.

About ATARI

Atari is an interactive entertainment company and an iconic gaming industry brand that transcends generations and audiences. The company is globally recognized for its multi-platform, interactive entertainment and licensed products. Atari owns and/or manages a portfolio of more than 200 unique games and franchises, including world-renowned brands like Asteroids®, Centipede®, Missile Command®, Pong®, and RollerCoaster Tycoon®. Atari has offices in New York and Paris. Visit us online at www.atari.com.

Atari shares are listed in France on Euronext Growth Paris (ISIN Code FR0010478248, Ticker ALATA).

©2023 Atari Interactive, Inc. Atari wordmark and logo are trademarks owned by Atari Interactive, Inc.

Contacts

Atari – Investor Relations
Tel + 33 1 83 64 61 57 – investisseur@atari-sa.com | www.atari.com/news/

Calyptus – Marie Calleux

Tel + 33 1 53 65 68 68 – atari@calyptus.net

Listing Sponsor- Euroland
Tel +33 1 44 70 20 84
Julia Bridger – jbridger@elcorp.com

FORWARD-LOOKING STATEMENTS
This press release contains certain non-factual elements, including but not restricted to certain statements concerning its future results and other future events. These statements are based on the current vision and assumptions of Atari’s leadership team. They include various known and unknown uncertainties and risks that could result in material differences in relation to the expected results, profitability and events. In addition, Atari, its shareholders and its respective affiliates, directors, executives, advisors and employees have not checked the accuracy of and make no representations or warranties concerning the statistical or forward-looking information contained in this press release that is taken from or derived from third-party sources or industry publications. If applicable, these statistical data and forward-looking information are used in this press release exclusively for information.

DISCLAIMER
The distribution of this press release and the offer and sale of the Convertible Bonds may be restricted by law in certain jurisdictions and persons into whose possession this document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This press release may not be published, distributed or transmitted in the United States (including its territories and dependencies). This press release does not constitute or form part an offer of securities for sale or any solicitation to purchase or subscribe for securities or any solicitation of sale of securities in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or the law of any state or other jurisdiction of the United States, and may not be offered or sold in the United States absent registration under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Atari does not intend to register all or any portion of the securities in the United States under the Securities Act or to conduct a public offering of the Securities in the United States.
This press release and the information contained herein do not constitute either an offer to sell or purchase, or the solicitation of an offer to sell or purchase, securities of the Company.
No communication or information in respect of any securities mentioned in this press release may be distributed to the public in any jurisdiction where registration or approval is required. No steps have been taken or will be taken in any jurisdiction where such steps would be required. The offering or subscription of the Company’s securities may be subject to specific legal or regulatory restrictions in certain jurisdictions.

This press release does not, and shall not, in any circumstances, constitute a public offering, a sale offer nor an invitation to the public in connection with any offer of securities. The distribution of this document may be restricted by law in certain jurisdictions. Persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions.

A French prospectus comprising (i) the Company’s universal registration document filed with the AMF on July 27, 2022 under number D.22-0661, (ii) an amendment to the universal registration document to be filed with the AMF, (iii) a securities note (including the summary) relating to the public offering of convertible bonds and (iii) the summary of the French prospectus will be submitted to the approval by the AMF and will be published on the AMF’s website (www.amf-france.org). As from such filing with the AMF, copies of the prospectus will be available free of charge at the Company’s registered office.

This announcement is an advertisement and not a prospectus within the meaning of the Regulation (EU) 2017/1129, as amended (the “Prospectus Regulation“).

With respect to the member states of the European Economic Area other than France, no action has been undertaken or will be undertaken to make an offer to the public of the securities referred to herein requiring a publication of a prospectus in any relevant member state. As a result, the securities may not and will not be offered in any relevant member state except in accordance with the exemptions set forth in Article 1 (4) of the Prospectus Regulation or under any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Regulation and/or to applicable regulations of that relevant member state.

The distribution of this press release has not been made, and has not been approved, by an “authorised person” within the meaning of Article 21(1) of the Financial Services and Markets Act 2000. As a consequence, this press release is only being distributed to, and is only directed at, persons in the United Kingdom that (i) are “investment professionals” falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Article 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”). Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

This announcement may not be published, forwarded or distributed, directly or indirectly, in the United States of America, Canada, Australia, South Africa or Japan.

1 Under US GAAP, based on unaudited financial statements of Night Dive Studios Inc., under further review in the context of usual due diligence
2 Held by Wade J. Rosen Revocable Trust, registered under US laws
3 As related party in the transaction.
4 Subject to customary net debt / working capital adjustment.
5 In accordance with article L. 225-147 of the French code de commerce and AMF recommendation DOC-2020-06. The reports of the contribution auditor will be made available on Atari’s website upon issuance by the auditor.
6 Equals to around 8 million euros in principal at the date of this press release, and excluding any potential shareholder loans concluded until the issuance of the convertible bonds

 

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Disclaimer
All transactions are carried out by The SiLLC Assembly, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to provide general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions, and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relate to The SiLLC Assembly International.

Atari to announce various steps to consolidate its balance sheet, implement a reverse split and propose a transfer to Euronext Growth

Atari to announce various steps to consolidate its balance sheet, implement a reverse split and propose a transfer to Euronext Growth

Paris, February 21, 2022 – Atari, S.A., a world-wide producer in the industry of consumer brands and interactive entertainment products (the “Company”), announced today that it is working on long term solutions to reinforce its balance sheet, limit its stock volatility and reduce compliance burden by moving its stock listing to Euronext Growth.

As discussed during the General Meeting held on November 30, 2021, the Company is currently preparing a EUR 22 to 25 million recapitalization with preferential subscription rights, the completion of which remains subject to AMF’s approval on the prospectus and granting of an exemption for mandatory tender offer.

If approved by the AMF, this capital increase will be made available to the existing shareholders through a rights issue and Irata LLC, main Company shareholder, will irrevocably guarantee its completion of up to 75% of the initial size (the “Fund Raising”).

In the context of this guarantee, Irata LLC is likely to exceed the threshold of 30% of the share capital and voting rights of the Company, which would place it in a mandatory public offering situation. Irata LLC’s maximum shareholding in the Company post-Fund Raising could be between approximately 29% and 34% of the share capital and voting rights (depending on the price assumptions and including the remuneration of the guarantee which will be the subject of a receivable recognition and will be incorporated in the share capital increase). Irata LLC has therefore requested from the AMF the granting of an exemption from the obligation to file a public offer on the basis of article 234-9 2° of the AMF General Regulations (subscription to the capital increase of a company in a situation of proven financial difficulty, subject to the approval of the general meeting of its shareholders).

Following completion of the contemplated Fund Raising, the Company is contemplating a subsequent transfer of the listing of its shares from Euronext to Euronext Growth. These steps will allow Atari to appropriately fund the implementation of its strategy for the short-term and mid-term, reduce its cost-exposure to the regulatory constraints associated with the Euronext market and be listed on a simplified market which is more appropriate to the Group’s profile and current need. This will allow the Company to further focus its resources on the underlying business while maintaining a Euronext exchange listing in a more appropriate market for the Company’s size.

Such transfer to Euronext Growth will be discussed and resolved upon during a shareholder meeting that Atari will convene shortly.

This contemplated transfer from Euronext to Euronext Growth would be possibly preceded or followed by a reverse stock-split of the Company shares the modalities of which are to be further determined by the Company board of directors, in order to improve market profile and limit share price volatility.

Atari remains entirely focused and dedicated to the implementation of the Group strategy presented to the shareholders during the General Meeting held on November 30, 2021.

Following the negative vote of the shareholders of Atari S.A. during the General Meeting held on November 30, 2021 regarding the compensation of Frédéric Chesnais in connection with his former mandate of Chief Executive Officer (Directeur Général) for the financial year ending on March 31, 2021, on January 28, 2022 the Company has notified to Frédéric Chesnais its request for restitution and return of the corresponding variable and exceptional compensations that consists of 49,108,403 ATRI Atari cryptocurrency tokens and USD 94,439, in order to comply with the applicable Say-on-Pay regulations.

Atari Group has experienced certain issues in the relationship with its licensee ICICB Limited and ICICB Investments Limited in relation to Atari licences granted to ICICB. Consequently, notices of breach have been sent by Atari Group to such licensees in relation to the corresponding license agreements, requesting the remediation of the concerned breaches. In case no corrective measures are taken by ICICB in the short-term in order to remedy such breaches, Atari Group may have to terminate the related license agreements. In case such termination cannot be avoided, this would lead to a write-down on the minimum incomes booked in Atari’s accounting in accordance with applicable accounting principles, for a financial impact estimated to be up to USD 11.4 million.

It has also come to the attention of Atari that ICICB Limited has issued a press release regarding the listing of the decentralized Atari tokens in which a member of ICICB Limited has wrongfully been identified as an Atari executive. Additionally, it has come to the knowledge of Atari that past and current judicial actions may have been taken by a foreign jurisdiction against the sole shareholder and senior officer of ICICB Limited. While such judicial actions do not relate in any manner whatsoever to the activities carried out by Atari Chain, Limited and more generally by the Atari Group, Atari is assessing the most suitable course of action to minimize any adverse consequences for Atari, including with respect to potential reputational risk.

In addition, while Atari is a party to usual litigation matters related to the protection of its intellectual property, Atari is currently appealing a loss in a unique intellectual property protection case and is resisting a demand for fees and expenses of over USD 2 million. Atari views the demand as unreasonable and legally questionable and will vigorously defend against the claim.

Finally, Atari is currently reviewing its commercial strategy with regards to its hardware operations and will communicate in due course the operational and financial impacts of such decisions as required.

Disclaimer:

The realization of the plans, and their operational budget and financing plan remain inherently uncertain, and the non-realization of these assumptions may impact their value.
About Atari:

Atari, comprised of Atari SA and its subsidiaries, is a global interactive entertainment and multiplatform licensing group. The true innovator of the video game, founded in 1972, Atari owns and/or manages a portfolio of more than 200 games and franchises, including globally known brands such as Asteroids®, Centipede®, Missile Command® and Pong®. From this important portfolio of intellectual properties, Atari delivers attractive online games for smartphones, tablets, and other connected devices. Atari also develops and distributes interactive entertainment for Microsoft, Sony and Nintendo game consoles. Atari also leverages its brand and franchises with licensing agreements through other media, derivative products and publishing. For more information: www.atari.com and www.atari-investisseurs.fr/en/. Atari shares are listed in France on Euronext Paris (Compartment C, ISIN Code FR0010478248, Ticker ATA) and are eligible for the Nasdaq International program in the United States (OTC – Ticker PONGF).

Contacts

Atari – Philippe Mularski, CFO                                Calyptus – Marie Calleux
Tel +33 1 83 64 61 57 – pm@atari-sa.com                        Tel + 33 1 53 65 68 68 – atari@calyptus.net

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Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

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