Galaxy Gaming, Inc. (OTCQB:GLXZ) has provided additional information regarding its impending merger with Evolution Malta Holding Limited, as detailed in a recent 8-K filing with the U.S. Securities and Exchange Commission. The merger, initially announced on July 18, 2024, is set to position Galaxy as a wholly owned subsidiary of Evolution following the completion of the transaction.
The company filed a definitive proxy statement on September 26, 2024, soliciting stockholder votes for a special meeting scheduled for November 12, 2024, to approve the merger agreement. Since then, several demand letters and complaints have been filed by purported Galaxy stockholders alleging that the proxy statement lacked material information concerning financial projections and analyses performed by Galaxy's financial advisor.
Galaxy has countered these claims, asserting that the allegations are without merit and that supplemental disclosures are not legally required. Nevertheless, to mitigate the risk of litigation affecting the merger and to avoid unnecessary costs, Galaxy has opted to supplement the proxy statement.
This supplemental information includes revisions to previous offers made by Evolution, clarifying that no post-transaction employment offers for Galaxy's executive officers or directors were contained within these offers. The revised offers showed significant premiums over Galaxy's closing stock price prior to each offer, with the last revised offer on May 30, 2024, proposing a purchase price of $3.20 per share, indicating a 100% premium.
Furthermore, the filing amends the financial analysis provided by Macquarie Capital, including additional details regarding selected public companies and precedent transactions analyses, as well as a discounted cash flow analysis. The updated information also includes a more detailed presentation of Galaxy's unaudited prospective financial information, such as net revenue projections and Adjusted EBITDA estimates.
Galaxy Gaming has emphasized that no agreements, arrangements, or understandings regarding post-merger employment for Galaxy's executive officers or directors have been made to date.
Investors and security holders are encouraged to read the definitive proxy statement and any other relevant documents filed with the SEC, as they contain important information about the merger. The company has made it clear that this communication does not constitute an admission of the legal necessity or materiality of any of the disclosures herein.
The merger is subject to stockholder approval and satisfaction of other closing conditions. The company has stated that it does not intend to announce each additional demand letter or complaint received or filed regarding this matter.
InvestingPro Insights
Galaxy Gaming's recent financial data and market performance provide additional context to the company's merger situation. According to InvestingPro, Galaxy Gaming has a market capitalization of $69.5 million USD, reflecting its current valuation as the merger process unfolds. The company's revenue for the last twelve months as of Q2 2024 stands at $29.36 million USD, with a notable revenue growth of 9.59% over the same period.
InvestingPro Tips highlight that Galaxy Gaming has experienced a large price uptick over the last six months, with a remarkable 110.85% price total return. This significant increase aligns with the timeline of the merger discussions and may reflect market optimism about the deal. Additionally, the tip indicating that the company's liquid assets exceed short-term obligations suggests a solid financial position as it approaches the merger.
It's worth noting that Galaxy Gaming is currently not profitable over the last twelve months, as indicated by another InvestingPro Tip. This information adds perspective to the merger's potential benefits for the company's financial health.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Galaxy Gaming, providing a deeper understanding of the company's financial situation and market position during this critical period.
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