Seven Aces Announces Departure of Anil Damani as Part of a GLC Order and Other Corporate Updates

TORONTO, ON / ACCESSWIRE / May 26, 2020 / Seven Aces Limited (the “Company“) (TSXV:ACES) announces, among other corporate updates, that Mr. Anil Damani will be stepping down as an officer of the Company’s wholly-owned subsidiary, Lucky Bucks, LLC (“Lucky Bucks“). Mr. Damani’s departure is part of a settlement with the Georgia Lottery Corporation (“GLC“) for a violation by Mr. Damani, in a personal capacity, of applicable laws in Georgia relating to the operation of coin operated amusement machines (“COAMs“). Mr. Damani will continue to hold his 30% equity interest in Lucky Bucks HoldCo, LLC, which entity is the sole shareholder of Lucky Bucks. In connection with his stepping down as an officer of Lucky Bucks, Mr. Damani has agreed to enter into a five year non-competition agreement with the Company with respect to his business in Georgia.

“While we are sad to see Mr. Damani depart as an officer of Lucky Bucks today, he remains a significant shareholder and I know he will continue to be a strong advocate for the business he founded” said Manu K. Sekhri, Chief Executive Officer of the Company, and added “we take great comfort in the way we have professionalized the business over the last two years in order to continue to execute our growth plan seamlessly”.

GLC Settlement

The regulatory body that governs Lucky Bucks, the GLC, recently became aware that Mr. Damani leased a residential rental property that he owns in his personal capacity to a person holding a location license to operate COAMs at locations in Georgia. As an owner of a master license, Lucky Bucks is prohibited under Georgia State law from offering something of value to a location owner, or from having a financial interest in a location owner or operator.

Under the terms of the settlement with the GLC (the “Settlement“), Mr. Damani has agreed to step down as an officer of Lucky Bucks and the Company has offered to pay a settlement fee. The terms of the Settlement were approved by a GLC Hearing Officer earlier today and a formal settlement agreement is expected to be entered into in the coming days.

Credit Facility Amendment

The resignation of Mr. Damani will trigger an event of default (as a non-permitted change in control) under the terms of the credit agreement entered into by Lucky Bucks on January 29, 2020 (the “Credit Facility“). The Company and Lucky Bucks have kept the lenders informed of the negotiations and the Settlement with GLC. As a result, the Company is confident of obtaining from the lenders an amendment to the terms of the Credit Facility to avoid the occurrence of an event of default under the Credit Facility in the coming days. The Company is expecting to pay a fee to the lenders in connection with obtaining the amendment under the Credit Facility, but does not expect the fee to be material.

Extension of Warrant Exercise Period

The Company is also announcing a short extension to the expiry dates of the common share purchase warrants scheduled to expire on May 27, 2020 (the “Loan Bonus Warrants“) and May 29, 2020 (the “Private Placement Warrants“, together with the Loan Bonus Warrants, the “Warrants“).

The Company issued an aggregate of 3,529,404 Private Placement Warrants with an exercise price of $0.215 per common share of the Company (“Common Share“) in connection with a non-brokered private placement of the Company that closed on May 29, 2017. The Company also issued an aggregate of 293,475 Loan Bonus Warrants at an exercise price of $1.041 per Common Share in connection with a loan financing that closed on October 21, 2016. All of the unexercised Warrants (comprised of 2,398,766 Private Placement Warrants and 293,475 Loan Bonus Warrants as of the date hereof) that remain unexercised are subject to the extension noted below.

The Warrants are exercisable by the holders thereof on a cashless basis and, as a result of the information contained in this press release, certain holders of Warrants may not have been able to exercise their Warrants on a cashless basis prior to the expiry thereof under applicable Canadian securities laws. Accordingly, the expiry date of the Warrants has been extended until 5:00 p.m. (Toronto time) on June 16, 2020. If Warrants are exercised on a cashless basis by a holder thereof during the extended exercise period, then the value of the Common Shares implied in such cashless exercise formula will be the lesser of the 10-day volume-weighted average price of the Common Shares as of (i) the original expiry date, and (ii) the date on which the Warrants are exercised during the extended exercise period (provided, however, that the 10-day volume-weighted average price period cannot begin before May 27, 2020). All other terms of the Warrants, including the exercise price, will remain the same. The proposed term extension of the Warrants has been authorized by a waiver granted by the TSX Venture Exchange.

Ascendant Warrant Exercises Subject to Escrow

The Company is also announcing that arrangements have been made with Ascendant Group Holdings Inc., a company controlled by Manu Sekhri, the CEO of the Corporation (“Sekhri Holdco“), to permit Sekhri Holdco to exercise its Warrants, in escrow, for subscription receipts of the Company (“Subscription Receipts“), pending the Company obtaining disinterested shareholder approval authorizing Sekhri Holdco to become a “Control Person” (as defined in the policies of the TSX Venture Exchange) of the Company (“Control Person Approval“). The Subscription Receipts will remain outstanding for a period of up to 90-days from issuance, and each Subscription Receipt will convert into one Common Share, if ever, upon (i) the Company obtaining Control Person Approval, or (ii) the conversion of any such Subscription Receipts not resulting in Sekhri Holdco becoming a “Control Person” of the Company.

This temporary measure has been authorized by the TSX Venture Exchange as a result of, among other things (i) the Company being unable to obtain Control Person Approval prior to the expiry of the Warrants, and (ii) the requirement to obtain Control Person Approval being triggered by actions taken by the Company under its normal course issuer bid program that commenced in February 2019 resulting in the repurchase by the Company of an aggregate of 4,617,950 Common Shares.

About Seven Aces Limited

Seven Aces Limited is a gaming company, with a vision of building a diversified portfolio of world class gaming operations. The Company looks to enhance shareholder value by growing organically and through acquisitions. Currently, the Company is the largest route operator of skill-based gaming machines in the State of Georgia, United States of America.

For more information about the Company is available online at

For further information, please contact:

Ryan Bouskill
Chief Financial Officer
Tel. (647) 228-8668

This news release may contain forward-looking statements or “forward-looking information” within the meaning of applicable Canadian securities laws (“forward-looking statements”). Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” or similar words suggesting future outcomes or statements regarding an outlook.

All forward-looking statements reflect the Company’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company’s forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include the following: the Company retaining its master license to operate coin operated amusement machines in Georgia; the Company retaining certain licenses to operate COAMs in Georgia; the Company’s ability to secure an amendment of the Credit Facility with the lenders; the TSX Venture Exchange’s approval of the extension of the expiry date of the Warrants; the continuation of the Company’s acquisition strategy in the Georgia gaming market; the growing footprint of Lucky Bucks in the Georgia gaming market; generating value for the shareholders of the Company; the regulatory regime governing the business of Lucky Bucks in Georgia; the exchange rate between the U.S. dollar and Canadian dollar; the ability to grow the business and deliver returns for shareholders; the availability of high growth and high margin opportunities; continuing to add high performing locations; and the execution of the Company’s business strategy and acquisition pipeline.

Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the Company’s ability to continuing to execute a growth strategy through acquisitions and the Company’s ability to generate higher margins and significant growth in cash flows. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE: Seven Aces Limited

View source version on

error: Content is protected !!