Jackpot Digital recently announced an agreement with 52 Gaming, effectively ending its royalty obligations to the company. This deal erases all past and future royalty payments, valued at a total of $375,000, with $75,000 already paid. To settle this amount, Jackpot Digital will issue three million common shares at $0.14 each and provide 52 Gaming with two million share purchase warrants, also exercisable at $0.14 per share for five years.
This move comes as part of a strategic shift for Jackpot Digital, aiming to solidify its financial stability while providing value to 52 Gaming. The stock and warrant issuance, according to a company statement, serves as “a full and final settlement of all the Company’s royalty payment obligations to 52 Gaming.” Additionally, the securities issued under this agreement will be subject to a hold period, adhering to securities regulations.
CEO Highlights Long-Term Value of Acquisition
Reflecting on the acquisition, Jackpot Digital President and CEO Jake Kalpakian highlighted the sustained benefits this transaction has brought to the company. “The strategic acquisition of 52 Gaming almost four years ago has provided intangible benefit and value,” he stated. By converting the royalty obligations into stock-based compensation, Jackpot Digital shows its confidence in long-term growth.
Kalpakian also noted, “Our buy out of the royalty in exchange for securities at double the current share price demonstrates 52 Gaming shareholders’ confidence in Jackpot’s future.” This conversion into shares and warrants, he suggests, underlines the mutual belief in Jackpot Digital’s future potential and underscores 52 Gaming’s continued trust in the company’s vision and growth trajectory.
By erasing all royalty obligations to 52 Gaming, Jackpot Digital improves its cash flow and simplifies its financial commitments. This agreement not only settles a longstanding liability but also signals a collaborative relationship between the two companies, with both sides supporting Jackpot Digital’s growth by securing the company’s financial foundation. Through this issuance of shares and warrants, the partnership appears poised to benefit from potential future gains in Jackpot Digital’s performance.
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