SEARCH NEWS:

 

Power Play, Strategic Gaming sign merger deal

"Power Play and Strategic Gaming are now positioned to expand our leadership position in providing legal and compelling on-line gaming experiences in the US market," said Michael Clebnik, CEO of Power Play. "Adding a Las Vegas based nexus and layering in SGI's marketing capabilities will greatly accelerate our penetration into the marketplace."

"In Power Play's Poker Creations division, we see a fantastic team of people who have created the most technologically advanced gaming platform for both players and sponsors in existence today," said Lawrence Schroeder, Chief Executive Officer of Strategic Gaming. "Following the merger, we believe that we can drive both on-line and brick-and-mortar poker and other gaming opportunities to create significant value for our shareholders."

Industry estimates are that over 25 million Americans had adopted and were playing online poker by September 2006. In late 2006, this multi-billion dollar market was cut off from a compelling on-line poker playing experience by the passage of federal legislation prohibiting US residents from moving any form of currency to or from on-line casinos.

"Our software platform, combined with Strategic Gaming's assistance in distribution and marketing, and patented team-based poker model, will allow us to re-connect with the US-player seeking compelling online poker experiences. We meet this demand for interactive online playing experiences with a US-legal alternative." Clebnik continued.

Following the merger, the shareholders of Power Play will hold 70% of the issued and outstanding common stock (on a fully diluted basis), Michael Clebnik will serve as CEO upon the closing of the merger and Lawrence Schroeder serve as President and Chairman of the Board of Directors. The merger is expected to close in the late third or early fourth quarter of 2007, and the company will continue to operate as Strategic Gaming Investments.

The merger agreement contains customary representations, warranties, closing conditions and covenants. Among the covenants, Strategic Gaming agreed to undertake a private placement of common stock with gross proceeds to Strategic Gaming of not less than $6,000,000, to be utilized for working capital purposes. Strategic Gaming expects that this offering will close simultaneously with the closing of the merger.

Under the merger agreement, Strategic Gaming also agreed to loan Power Play $500,000, consisting of (i) $300,000 upon execution and delivery of the merger agreement; (ii) $100,000 on or before August 15, 2007; and (iii) $100,000 on or before September 1, 2007. The loan is in the form of a convertible promissory note with interest at the rate of five percent (5%) per annum, which will be cancelled immediately following the closing of the merger.

< Gaming News