| | | Financing - Diamond Eagle IPO:
On May 14, 2019, Diamond Eagle raised $400 million through the sale of 40 million shares at $10.00 per share.
Concurrent with the close of the transaction (per the final prospectus):
The Private Placement
In order to satisfy the minimum proceeds condition in the BCA that DEAC has at least $400 million in cash at the Closing, DEAC entered into the Subscription Agreements with the PIPE Investors, pursuant to which, among other things, DEAC agreed to issue and sell in private placements an aggregate of 30,471,352 shares of DEAC Class A common stock to the PIPE Investors for $10.00 per share, plus the issuance by DEAC to the PIPE Investors of an aggregate of 3.0 million warrants to purchase shares of DEAC Class A common stock, which warrants are identical to DEAC’s public warrants. The Private Placement is expected to close immediately prior to the Closing. In connection with the Closing, pursuant to the Reincorporation Merger Agreement, all of the issued and outstanding shares of DEAC Class A common stock, including the shares of DEAC Class A common stock issued to the PIPE Investors, will be exchanged, on a one-for-one basis, for shares of New DraftKings Class A common stock. In addition, all of DEAC’s outstanding warrants will become warrants to acquire shares of New DraftKings Class A common stock on the same terms as DEAC’s currently outstanding warrants.
The Convertible Notes
On and after December 16, 2019, DraftKings issued subordinated convertible promissory notes to certain investors in an aggregate principal amount of approximately $109.2 million (the “Convertible Notes”). Pursuant to the terms of the Convertible Notes, the outstanding principal and accrued interest on the Convertible Notes will convert immediately prior to the reincorporation into shares of DEAC Class A common stock, at a price per share equal to the price per share paid by the PIPE Investors in the Private Placement. The shares of DEAC Class A common stock issued upon conversion of the Convertible Notes will be converted into shares of New DraftKings Class A common stock upon consummation of the reincorporation and the Business Combination. |
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